Blog post

Open Government as a Means to Shake the IT Suppliers Landscape

By Andrea Di Maio | September 21, 2010 | 1 Comment

open government data

I had dinner with the CIO of a large government organization, where – in spite of substantial IT investment and a healthy IT spending per employee – the use of IT is very low. This is partly due to the relatively high average age of employees and a rather senior top and middle management, which applies to the IT department too.

As a consequence the CIO confessed that IT lacks the necessary skills to properly own essential activities, such as (I guess) strategic planning, enterprise architecture and vendor management. Given the size of the government organization, they have only large contracts with large vendors, which in turn subcontract some if not most of the actual work to smaller-size, local suppliers that possess specific skills but lack the financial muscle to successfully respond to tenders.

Indeed the reliance on the same few vendors has caused the current situation, with different, often incompatible systems, underutilized infrastructure, lots of duplication. As a means to regain control, the organization has gradually recentralized IT, taking almost all decision power out of the various offices and divisions. However the other necessary course of action is to change the power balance with vendors.

In this respect, the CIO is looking into the potential of open government data as a way to engage new vendors or engage traditional vendors under different rules. Following the path of many federal, state and local administrations that have launched “innovation contests” or “application contests”, the CIO is exploring the idea of publishing open data to encourage industry to develop new products and new services.

I somewhat cooled down his enthusiasm by saying that I have not (yet) seen any sustainable business model coming out of government “app stores”. Lots of great ideas, but a strong focus on transparency and what may interest political activists, more than a real revolution in service delivery.

It is certainly still early days, but my contention is that the only way to succeed is by

  1. defining clear targets for the open data initiatives (i.e. engage respondents to develop applications using open data, but for a particular purpose)
  2. blending application contests with other sourcing and funding models (as government apps are unlikely to be self sustainable).

In a nutshell, open government should not be seen as an alternative to what is done today, but as a complement to make existing sourcing models and supplier engagement modes more effective.

This will help shake the market, make incumbent suppliers rethink the way they relate to their government clients, but is unlikely to revolutionize the landscape. And it will take a whole new set of skills (and a different attitude to risk management) on the government’s part.

Comments are closed

1 Comment

  • Doug Hadden says:

    Andrea,

    There are two very interesting nuggets here.

    “won’t be fooled again”?

    The first is the observation about large IT vendors in government. Government organizations often prefer these larger vendors in order to reduce risk. But, as you have shown, conventional thinking often leads to high risk. In this case, less innovation and using the small vendors they wanted to avoid. You’re right on the notion of a “different attitude to risk management”. It often seems like IT projects operate like Greek tragedies – by trying to mitigate risk, you end up doing the IT equivalent of marrying your mother and killing your father.

    “The enemy of the conventional wisdom is not ideas but the march of events.”

    The second nugget is about landscape disruption.I have to disagree about your clear targets point because of the unintended consequences of open government that cannot be predicted. In other words, should we continue to use the traditional approach of justifying projects, we’ll end up with the very same system integrators. Many government IT projects are planned over time, with long procurement and delivery cycles. There is a need for more agile experimentation using open data – small proofs-of-concept to test assumptions and build the business plan over time. This might be a general approach to provide more competition in IT projects – certainly to leverage smaller vendors who might have deep knowledge of certain IT elements.