The solution called Government

The channel partners across the country do not hesitate over scrolling through a red carpet when a client knocks the door even for a small project. However, the situation may not be the same if they get an opportunity to see a classified tender advertisement of a government project. Many channel partners are not even bothered to go through the ad, whatsoever number of zeros may be suffixed with the total project value. To put it crude, channel partners who were not into government projects when contacted, said that they feel happy for being in safer side or in an alert mode by not depending on government projects.

However, there are channel partners on the flip side too who see such projects avenues to flourish. This mixed reaction is due to various reasons including different styles adopted by different states in the country. A process followed in a state may be rejected by the government ruling in a nearby state or union territory which makes the projects. This makes government projects almost region-specific. 

"The value and volume of government orders are increasing in size in the Information Technology space for hardware and software due to the implementation of E-governance in multiple areas," says Harinder Salwan, MD, Tricom Multimedia, Mumbai.

As said, channel partners in different regions have different view on government projects. Taking the Eastern states, where technology has a remarkable penetration and growth is higher, partners have a high note on government projects."Those orders are a very important component of today's business growth, especially in the East as the government spending in IT and security infrastructure is growing," says Sathish Choudhary, CEO, Techniche, Kolkata.

"Government orders are certain. In today's scenario with uncertain spending patterns of MNCs, government orders are like Oasis. Only problem is long gestation period," says Ananthram Varayur, MD, Webcom, Bengaluru.
To an extent what the channel partners believe is very true. "Over the years we have seen the process moving from paper submission to online participation and online bidding where one is immediately aware whether he is in the race to win if the participant bids online and reaches the L1 or L2 position," Salwan affirms.

Ananthram also says, "Government orders are becoming more and more professional. With usage of technology...which is our own contribution, orders are becoming transparent, more competitive thereby attracting more players."

However, Sujeet Narula of ABC Systems, New Delhi, finds government processes very slow. "Few of the departments, because of some developments, might have geared the work. However, I see most of the processes are very slow, " Sujeet further adds.

Thumbs down to state governments!
Channel partners across the country are very weird on the projects offered by state government. There are some who implement only deployments from the central government. Most of the central government projects demand the partner to be present in multiple locations for implementation where as in the case of state government projects, the implementation is within the state. Moreover, is the vendor is located in the same state, it is an added advantage. The values of the projects are usually large in case of nationwide implementation where as when it comes to the state, it is generally department or location specific.

There are various reasons channel partners prefer a national-level project than a state government project. The first and foremost is the process by which the project is handled. "Central government projects are always sophisticated whereas projects emerging from the state or local bodies emerge almost only by a relationship with the concerned departments, " says Paramjit Singh Juneja, CEO, Secant Technologies. He added, he had implemented many projects for Air-Force. "In the course of time, there is a sea change in the process. The people in the department are well aware of what they need and also the quality of the products they are buying, providing a challenging atmosphere for enthusiastic partners like us," he says.

Another channel partner, on condition of anonymity, says, "Almost 95 percent of the projects under the state government runs in a relationship with the concerned minister or the executive official of the government department. Even though if we try to explore any opportunity, corruption is very high. We have to give our share at many places in the state-level deployments where the margins are very less. I will not say that all central government officials have a pure hand, but, compared to a low-margined state project, it is advisable to opt for a central government project."
On the other side, there also some partners who find state government projects effective. K.P.Mutharasu, CEO, Zigma computer links, Erode says, "Even though the volume in the central government is more, only the state government projects are much effective." Mutharasu says that the potential is more in the government sector as there is a downtrend in private sectors and the state governments, which move with the public very closely, are focusing more on e-governance project. Mutharasu also affirms that in his career he has witnessed a drastic improvement in the ways government projects work.

Challenges:
There are lots of challenges to mention in a successful completion of a project where a government is a client. The major challenge that the partners face in bagging the project is the investment for it before payment is realized, ensuring that the funds are provided based on execution of the project and issues of getting the earnest money refunded on time.

Payments:
More than 80% of the channel partners feel that though the payment facilities have improved but its procedure still needs to be worked on. "In any government projects, you define clearly that this is the way to go, right from the tender till the final payment procedures, everything differs from state to state,"says Sujeet Narla . But on the other side, the channel partners have a security for their money. Adding value to that, like private companies, the government departments are also becoming e-friendly which has been an added advantage for the partners, he adds. "Now days, payment procedures are simple. We get payment my RTGS and online methods. The only problem is the process inside the organization," says Ananthram. He also says that partners need to have a dedicated person who can move a file from table to table. "Lot of government holidays add to the delay of the payments," he further adds. Mutharasu demands unity among the channel partners in such situations.

‘Back door entry':
Sometimes, some vendors, instead of helping the channel partners, take the leads from the partners and approach the respected department officials and ‘grab' the projects. Partners call it 'back door entry'. Satish says, "The government tender norms are being framed to favor direct vendors instead of channel partners. Government departments should realize that, the local system integrators or channel partners are best suited in providing right price and services, but provided they are able to bid in the tender process. The norms are such as to favour Vendors directly, which is very unfortunate."

Ananthram explains the situation clearly along with a solution. "Some of the vendors pick up the order if it is mere BOX moving such as bulk supply of laptops, desktops, peripherals etc., Hence we must always look for turn key solutions. If there is no value addition, your vendor is the biggest competition. Hence we must build opportunities with lot of customization and multi-vendor solution. Say servers from one vendor, software with bit of customization, networking from different vendor, solution should include cabling, UPS and some unconventional products to keep the vendors away. Vendors don't like messy jobs."

Harinder says, "I advise the partners to be clear on the policy of the principal before working with them as a registered partner since these issues would later lead to the problem of survival of the channel once the vendor gets into direct execution."

Partner expectations:
Partners expect the value and volume increasing over the years and there would be more transparency in the processing phases and the government working closely with the vendor. They have even seen that happen in online filing of income tax, VAT monitoring in Maharashtra, passport project, MCA project. Partners also expect the government tender norms should be such which allow local channel partners to participate in the projects. They feel the tender should remove very high turnover clauses level playing field for channel partners to bid in competition with national players. Government projects should involve local channel partners that will enable a healthy exchange of technical skills and knowledge while providing the pricing edge for the project. Partners also expect government to stop reverse auctions which are dangerous and destroying every system integrator. Partners also hope that the governments will to speed up the acceptance procedure.
The Vendors/Distis has to be liberal in both payment terms as well as price validity. In IT models keep changing and government agencies should accept the model change easily.

Some of the key suggestions given by channel partners across the country for better implementation of government projects:
Work with the government to define the project specification.
Get your product certified.
Get the proprietary clause activated
Ensure the payment clauses are manageable.
Work closely with the indentor to understand his needs and build the specification as per his requirement.
Working on the project from the beginning
Doing a proof of concept for all type of projects to instill
Confidence in the mind of the government customer
Breaking large projects into smaller ones to ease the payment pressure on the channel partner
Logging in the project in writing with OEM to get special draft of the pricing strategically
Having a dedicated account manager to handle documentation
Satisfying the client's expectation
Government orders are like farming. It is not hunting business. You need to work for the order
Give solutions free of cost. Give best solutions not worrying about getting the order or not.
Lock cases with vendors. Without vendor support you can't win easily.
Make use of organizations such as MSME and NSIC
Build credibility by constant visit and keeping in touch with the customer
Work on solutions. Do not get in to box moving in government orders.
Approach the government departments in a cohesive way
Give proper appraisal about the company and industry.
Quoting with the reasonable margins
Never compete in non-core areas