Tech suppliers commonly make several mistakes when selling to Australian governments, resulting in missed opportunities and sub-optimal sales results.
If you want to win your share of the $25 billion per annum Australian governments spend on digital and ICT, read on.
Lengthy and complicated procurement processes
Despite current attempts at reform, government procurement is bureaucratic, slow and onerous. Only patience and a long-term strategic approach will yield results.
The first mistake suppliers make is to begin their sales efforts when an agency releases an Approach to Market (ATM). These ATMs might be a Request for Tender (RFT) or Request for Information (RFI) but in effect, they mark the beginning of the end of the procurement process.
So suppliers are entering the government procurement cycle way too late if the first they know of an opportunity is when the tender comes out. The ATM is issued at around twenty minutes to the hour on the procurement ‘clock’ diagrammed here.
In contrast, successful suppliers have been in dialogue with the agency from around 'five past ' on the procurement clock.
This is because between five to twenty past on the clock, the agency has not yet determined its solution requirements nor has it developed its business case. It is likely to be very receptive to suggestions for meeting its business challenges and hence suppliers can legitimately seek to influence requirements at this stage.
By the time 'twenty to the hour' comes around, the agency has locked in on its requirements and has issued its ATM reflecting those requirements.
Suppliers have no choice but to respond to the formal procurement process as laid out by the agency even though their solution may not align completely with the stated requirements. Generally, there is no scope to propose a better or different solution because all responses to the ATM will be assessed only on the requirements articulated in the ATM.
To win a tender, suppliers need to:
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Register with the relevant marketplace/s, panels and contact lists to receive ATM notices.
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Identify where future opportunities are likely to arise by researching public domain resources such as agency annual reports, Auditor General reports, expiring contracts and budget papers.
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Research the agency that has the opportunity. Understand what it does, its business needs, and its challenges.
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Have 'conversations with credibility' with senior agency people about their business challenges and possible solutions as early as possible in the agency’s buying cycle
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Appreciate that the process is longer, more arduous, and more tedious for evaluators than it is for suppliers. So make your tender response easier to comprehend than your competitors by ensuring it is well-written and, most importantly, comprehensively addresses the selection criteria.
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Not ‘go rogue’ by answering in an alternate format or skipping mandatory criteria.
Stringent security and compliance requirements
Suppliers must demonstrate how they meet rigorous data security requirements, privacy laws and regulatory frameworks (including labour, workplace health and safety, anti-slavery, and environmental impacts).
Suppliers must also take their staff through security vetting processes and provide evidence of required levels of insurance and of solvency.
Governments are also establishing enterprise architectures to encourage interoperability between agencies and systems, encourage technology reuse, and minimise project failure.
To be successful, suppliers need to:
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Identify and then participate in relevant government accreditation programs, such as the Infosec Registered Assessors Program (IRAP)
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Address all security and compliance requirements listed in the ATM.
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Keep abreast of changes in cyber security and compliance requirements.
Fortunately, agencies typically provide templates that help suppliers to evidence compliance.
Competitive procurement environment
Because Australian governments encourage fair competition, multiple suppliers often compete for the same contracts, leading to a highly competitive market where multiple businesses can realistically meet the requirements.
Intermedium's ICT market intelligence platform shows that almost 2000 unique suppliers won government contracts in the 2022-23 financial year.
In addition to Influencing the requirements before the formal tender process commences, to be successful, suppliers need to differentiate themselves by:
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Submitting a well-researched, well-written, clear and relevant tender response. (See Intermedium's guide here.)
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Evidencing how they can support broader agency objectives such as skills transfer, improving efficiency, or citizen outcomes
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Proposing an innovative approach
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Provide proof of claimed capability.
A great way to stand out is by using case studies that make your solution 'real' and 'proven' to the evaluators.
Budget constraints
Government agencies operate within budget constraints, that impact the purchase of ICT solutions. Agencies rarely have enough budget or resources for everything they are trying to do. But this doesn’t mean that agencies consider cost above all else when making procurement decisions.
Instead, agencies use a value-for-money assessment that looks at the degree of solution fit to the requirements, the degree of risk inherent in the proposal, and the total lifecycle cost.
To be successful, suppliers need to demonstrate how their solution offers value for money across all three of these dimensions.
Some key tips related to value for money:
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Know what the market rate is for your solution. If you quote too high, you may not make the shortlist.
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Don’t lowball your price to beat the competition. Agencies are wary of pricing that is 'too good to ignore' and will wonder where you plan to cut corners to make the deal profitable.
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Explain how your solution can help the agency reduce costs.
Requirement for local presence / sovereign procurement
If you're a small to medium enterprise (SME), or Indigenous business, the fact that most Australian jurisdictions now have policies favouring local and/or SMEs and Indigenous businesses is excellent news, because they make multinationals much more inclined to partner with SMEs and Indigenous businesses.
These policies generally mean that agencies can source directly from Australian SMEs or Indigenous suppliers for low-risk or low-value procurements.
The policies may also mean suppliers meeting specific characteristics may get additional weighting during the tender assessment.
To be successful, suppliers need to understand all buy local, indigenous and SME-friendly policies and organise their bid response accordingly.
Australian jurisdictions can now require multinationals to have a local presence or partner with local entities and even if this is not a requirement, partnering with an SME or local firm shows a multinational’s support for the local economy and contributes to the achievement of the agency’s targets for SME or indigenous procurement.
SMEs, local and Indigenous suppliers therefore need to proactively build relationships with multinationals and vice-versa. Intermedium's ICT intelligence platform provides information on suppliers selling tech to government and their SME or indigenous status.
Changes in government priorities
Government and agency priorities, business needs and dynamics constantly evolve due to political, economic, societal and technological (PEST) changes.
Priorities can change quickly based on bad publicity, a major project failure, an adverse audit report finding, a Machinery of Government change, or a new Minister.
To be successful, suppliers need to keep abreast of PEST changes and determine how they will influence agency demand for ICT, particularly the emergence of new requirements.
Suppliers can only have ‘conversations with credibility’ with agency decision-makers if they stay up-to-date with the changes influencing government procurement.
Intermedium's ICT Market Intelligence Platform helps you win more government business. Specifically, it:
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Saves you hours of laborious and frustrating research searching for emerging ('five past the hour') opportunities.
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Provides everything you need to know about agencies in one convenient online dashboard. Use it to identify key people, ICT budget, addressable and funded projects, environment, current contracts and direction,
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Helps you identify suppliers to partner with based on characteristics such as SME status, incumbency and market success.
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Allows you to identify where your competitors are active and determine how successful you are in comparison.
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Provides updates and plain language resources on procurement rules and processes, policies and market developments, so you can engage in conversations with confidence and ensure your value prop resonates with government.