The announcement of preferred tenderers for the Western Australian government’s 10-year, $80 million shared service centres has created ructions within the local information and communications technology industry.
The announcement of preferred tenderers for the Western Australian government’s 10-year, $80 million shared service centres has created ructions within the local information and communications technology industry.
While the final details are still being negotiated, the government announced earlier this month that a consortium of ASG Group and Oracle Corporation were named preferred tenderer for corporate services business systems while the independent product vendors included Alphawest (for the Hummingbird EDMS product), Information Builders (for its web based Business Intelligence reporting tool) and Total Care Technologies (for its rostering product).
While there is a global shift in some industries towards shared services, local players have raised questions over the long-term effect on local competition of letting such large contracts.
Further, there are concerns that small local providers will miss out on valuable government contracts as they are out-priced and ‘out-sized’ by larger providers who bid as part of consortia.
The tender process came from a shake up of the State’s $300 million IT budget.
Earlier this year the Government announced it was pushing ahead with its Functional Review Process.
A Functional Review Implementation Team had previously been formed to advise the process.
In the search for economies of scale, shared services will centralise and bring uniformity to the Government’s hardware and software requirements and standardise business processes.
This will mean running a uniform widely implemented software solution, consisting of a minimal mix of packages, rather than the 20 financial and 12 human resources systems that are in use at present.
The Government has announced that when complete, after 2007, the implementation of shared services will shave $55 million annually from its IT and back office services by cutting down on waste and duplication.
These savings will be the result of grouping the needs of 120 Government agencies into five clusters – two of which will cover education and health – and provide services through five shared services centres that are to be located in the former Australian Tax Office building in Cannington.
However, the tender process has been complex and time consuming with bidders spending thousands.
PIVoD Technologies executive chairman Phillip Jenkins said the tendering process for Government contracts in ICT was difficult.
He said PIVoD was more likely to be successful in securing a contract in Victoria or Queensland.
“Outside of the SPIRIT program, the normal tendering process encourages mediocrity as a generality,” Mr Jenkins said.
He said the expense of bidding on large tenders was a major issue for smaller players.
“Some tenders cost us $30,000 to $100,000 to bid on, and that money is gone [if we are unsuccessful],” Mr Jenkins said.
However, former Computer Sciences Corporation WA manager Bruce Dinsdale, said he expected there would “be a lot more work around for everybody” in the long term.
CSC was an unsuccessful bidder on the shared services contract.
However, another industry source, who refused to be named, questioned the concept of centralising the needs of government to such a degree.
“The danger is … overall competition could be decreased in the State,” the source said.
