A look in the mirror

By GovTechReview Staff
Friday, 25 March, 2011

Canberra in winter can be a forbidding place, and never more so than if your kids play junior sport and cop an early kickoff time. As teams warm up, parents find themselves crunching through thick frosts, bravely exiting cars to exhale great clouds of steam while huddling in wan patches of sunlight and clinging to mugs of anything warm as if they were life-preservers.

Occasionally, they also find themselves inadvertently doing business. Canberra’s still a smallish town and there’s every chance that a Saturday morning sideline will find vendor and buyer cheering for opposing teams. A nod across the turf and an amiable half-time chat, or an encounter at other recreational venues, can become part of the sales process.

“I bumped into a client at a kids’ play centre,” says Peter Sharples, CA Technologies’ Director of Solution Sales for Virtualisation Service Automation. “Canberra is such an insular place. It is such a small town that this happens quite a lot. When my manager comes to town and we go to a coffee shop I say hi to every fifth person.”

Sharples is happy it does happen, though, because it’s often hard to arrange informal meetings in Canberra, and old tactics like long lunches are off the menu.

“Anything more than a coffee has to be declared,” he says, a marked difference from the environment in which his colleagues targeting the private sector work.

Even if someone is willing to meet for a coffee, Dirk Klein, business intelligence vendor SAS’ Federal Government and ACT State Manager, says relationship-building chats are now hard to justify.

“It is hard to say if it is because of increased professionalism or a greater number of vendors taking up time, but– when you meet with a client you cannot shoot the breeze and make it worth their while and add value,” he says. “You need to know what interest them. You can just go in and ask ‘what is keeping you awake at night?’ You have got to show you have done some homework.”

Klein likes it this way. “I don’t think someone will make a million-dollar purchase based on giving them a coffee mug,” he says.

But with casual networking and entertainment opportunities harder to find and even trivial gifts hard to give, vendors find third parties help them network. Membership of the Australian Information Industry Association is seen as productive, while events staged by the likes of National ICT Australia (NICTA) and others were also mentioned to GTR as ways to meet government buyers without the usual pressures on time and probity.

Once serious discussions begin, negotiations are tough.

“The customer has become wiser, based on experience and hard knocks,” Klein says. “There has been recognition that some vendors have come in with a low price and clawed back revenue with scope creep. Clients are wise to that now. You can still benefit from incumbency, but the clients are wise to this too.

“At a senior level they recognise it has to be a win/win. It has to be profitable or the user will suffer.”

Rising to the challenge

For Andrew Foot, data management vendor EMC's Head of Public Sector for Federal, NSW and Victorian governments, the differences required when selling to government are something he thrives on.

“It is a unique sector with its own challenges,” he says. “It is very different to general enterprise sales. The key difference is that with private enterprise, a lot of what you focus on is around unique business value for the end user. You have discussions around competitive advantage, return-on-investment, right through to how to create efficiencies through reduction of staff or the improvement of process.”

In government, he says, selling requires different discussions because “what you are dealing with is anything from the machinery of government to a minister’s policy agenda.”

CA’s Sharples agrees. “We invest a lot in sales methodologies and then we toss them out as soon as we see the ACT sign at the border,” he says. “The whole process around how decisions are made is different. Return on investment is different. Government does not look at resourcing as a sunk cost, so assuming that technology helps to shed head-count is not always a powerful factor. Risk is king. If you can show you mitigate risk, it helps.”

SAS’ Klein also says he has to sell in different ways compared to his business-focussed colleagues.

“Government does not have the urgency of commercial outcomes that you get in the private sector,” he says. “An important part of my job is to make sure senior management understands those realities.”

Sharples has similar advice. “What you need to do is have a level of context and have your management understand how business is executed [in the public sector],” he says.

Quarterly pressure

All three sales people to whom GTR spoke also said that educating their management about the slow pace of government procurement is an essential part of their roles, because quarterly revenue targets aren’t sympathetic to the peculiarities of public sector procurement habits.

“The quarterly number is important, so we have to demonstrate a long-term strategic vision,” says EMC’s Foot. “Then we get the business into something that resembles quarterly revenue. The key to having that is to link [quarterly] revenue projections to a priority of the government. If something has been called out in a white paper or in AGIMO as part of the Gershon process, for a strategic priority you can drive a timeframe.”

CA’s Sharples says that this need to have a deep understanding of government procurement means vendors have to maintain a sales presence on the ground in Canberra and state capitals.

“It is really easy to get to Canberra and back in a day,” he says. “The eggbeaters (slang for Qantas’ fleet of propeller-powered Dash 8 aircraft) go all day. But the big thing is being local because it allows you to build trust and commitment as part of the company you represent. You can’t do that out of a serviced office.”

What they hate

While the three sales people to whom GTR spoke for this feature revel in their roles, there are some frustrations and the tendering process got a few mentions.

“Every company in the channel would rather see more efficient tendering,” says Foot, citing a recent Centrelink tender for $40 million of storage infrastructure as an example of sympathetic procurement.

“When Centrelink issued the tender it came with a dollar amount and it was clear they were after a panel. Responding requires a lot of effort: our response was 1000 pages.”

That effort was worthwhile because Foot and EMC “understood the ramifications and opportunities of that panel and that it had the chance to become more than a Centrelink panel: it could be leveraged across the federal government.”

Smaller agencies, however, can sometimes do as much work for a far smaller sale with less future upside. “The work involved with a small agency and a small tender is sometimes no less than for a large department,” Foot says. “Hopefully we see fewer of the really small tenders and see consolidation of procurement under shared services plays.”

Procurement regulations and their uneven application also rankle, as Sharples recalls when discussing a prospect that was ready to purchase,

but asked for a particular clause in its contract.

“There was a clause we could not budge on and we could not accept it,” Sharples says. “We had not accepted it anywhere globally. We would not move, the Commonwealth would not move and we lost a two million dollar contract.”

“I found out later through my network that the contract was offered to my competitors and that clause was not raised or mentioned. It shows that the playing field is not always level.

“Working in government you have to accept it.”

SAS’ Klein agrees with that assessment.

“Sometimes you make an investment and a program is cancelled if the government makes a change or decides money will be spent to fix flood damage. At times that is frustrating. At other times it is par for the course, you do your best within the constraints.

“But the thing I tell people when they are new to selling to government is that there is no point raging against the machine.

“It is what it is.”

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