Opinion: SMEs need help to compete in the government arena

By Alan Mac Neela
19 Apr 2012 View Comments
Alan Mac Neela Dell

The government’s ICT strategy calls for an end to large suppliers monopolising provision. One way the government says it will achieve this is by streamlining procurement processes to break down the barriers that impede small and medium-sized enterprises (SMEs) when bidding for contracts.

The big ambition is to stimulate economic growth by creating a fairer and more competitive marketplace. But much still needs to be done before this can happen. At a strategic level, public bodies need to develop the awareness and skills necessary to engage with, and procure services from, SMEs. At the same time, SMEs need government assistance to become more engaged in public sector procurement cycles and to improve their bidding practices.

Further reading

For many SMEs, the procurement approach taken by public bodies has often been too lengthy, cumbersome and over-regulated. A common issue among SMEs is that the procurement processes do not apply the principles of proportionality, limiting the capacity of some SMEs to engage in the government’s ICT strategy.

One way to improve SMEs’ ability to do business with the public sector might be to bring together public bodies, learning providers and SMEs in the creation of online and offline networks to promote access to high quality, needs-led learning and skills development.

Moving forward, the government will have to address other challenges in this area, such as how to engage with mutuals – organisations that have been spun out of the public sector that deliver public services. Mutuals emerge when there is a gap in service provision or if a service can be improved via mutualisation.

This begs a number of questions for the government to seriously reflect on. For example, what steps and support will be required for SMEs to move procurement cycles towards outcome-based models, how will risk be shared between public bodies and SMEs, and who should bear the bulk of risk in contracting situations?

The road for the successful engagement of SMEs in UK government ICT has been paved. However, the journey will take both sides into unfamiliar territories. For the government to truly invest in the ICT services available from SMEs, both sides must work together to overcome the challenges that lie ahead.

Alan Mac Neela, government director, UK, Dell Services

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