Further to the Barry Bonds Post . . .

Posted on March 14, 2008

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The response to the Barry Bonds post through both the PI Blog as well as e-mail has been tremendous.  Be sure to check out the comments that have been posted (with more to come), as they are indicative of the prevalent attitudes amongst stakeholders in terms of the Government of Canada’s Shared Services strategy.

One question that I am often asked is if “concern with the GoC program is solely an issue of access and lost revenue opportunities,” or if there are “broader implications” that elevate the negative pushback from one centered on entitlement.  Specifically, are SME complaints tied solely to fears of lost revenue opportunities (which some consider to be self-serving), or is it indicative of a true erosion of “best value” products and services availability.

While this does reflect the concerns of some key stakeholders, issues such as domestic cluster development are also becoming part of the collective consciousness.  Especially given the aggressive policies of other governments in terms of developing important Knowledge-based (industry specific) competencies.  Please refer to my post from August 28th, 2007 titled Public Sector Procurement Practice and the Principles of External Economies, Clustering and the Global Value Chain (see the Reference Links section at the conclusion of this post).

However, what are the specific areas of opportunities in which the SME community now finds itself on the outside looking in.

Certainly Mike O’Neil’s comment indicating his belief that “unless PWGSC is willing to commit independent resources to continually monitor and insist on product offerings that add value and cost savings for the GoC, Shared/Managed Services initiatives will simply be a reflection of what the winning vendor has or wants to offer as COTS solutions regardless of price or functionality improvement,” is worth considering.

Especially given my findings, which indicate that large (i.e. tier one) vendor pricing has more to do with supporting their business infrastructures rather than being a reflection of the products or services that are being delivered.

This has also been cited as one of the main reasons why governments such as the U.S. have started unbundling large contracts as reported in a series of PI posts last year (see Reference Links).  Besides concerns with artificially inflated prices, studies have found that the major ramification of centralizing contracts under a single, large vendor is that it actually stifles the innovation that leads to a variety of problems including the one to which O’Neil had referred.

For whatever reason, the consensus is that GoC policies are tantamount to giving the proverbial keys of the kingdom to a single, large vendor.  Is this the case?

It is hard to say for certain as the GoC hierarchy continues to play their cards close to their vests.

Regardless, if we are to collectively move beyond a perpetual state of inertia (especially when compared to the proactive policies of other governments), we somehow have to find a way to move beyond the discussion-disappointment cycle of futility that has marked previous dialogue exchanges between the GoC and an increasingly skeptical and demoralized supplier community.

Interestingly enough, the theory of strand commonality clearly shows the points of disconnection between various stakeholders as well as highlighting the corresponding links to bridge said gaps.

For example, Chuck Henry’s 2006 PowerPoint presentation on FOSS, the availability of new and more competitively priced vendor models, as well as the recognition of the importance of individual and collective cost structures at the department and agency level are just a few examples of the areas of connective commonality.

In the end, the ability to see and ultimately connect these as well as the other dots will determine Canada’s position in an increasingly knowledgeable and competitive global marketplace.  

Referenced Links:

Public Sector Procurement Practice and the Principles of External Economies, Clustering and the Global Value Chain August 28, 2007

Cluster Development and the CAC (PWGSC): Facilitator or Competitor? October 13, 2007

Reader Question: Is a strong small business sector important to the stability and growth of a nation’s economy? November 10, 2007