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Featured Article

Why prioritising local procurement in IT matters

Written By James Boddam-Whetham for
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Article originally published in Inside Small Business, original article available here.

In policy circles, COVID-19 recovery is the mantra – not just eliminating the virus threat but stimulating a full economic revival, as well. One of the hardest-hit sectors, SMEs need these measures more than anyone else.

Indeed, the pandemic hammered Australia’s SMEs. Small businesses were around twice as likely as large businesses to report declines of 50 per cent or more on their pre-pandemic revenue, according to Assistant Governor of the Reserve Bank of Australia, Christopher Kent noted.

Other studies showed over three quarters of SMEs reporting revenue losses, while nearly 40 per cent forced to close.

Governments are promising to buy local

The Commonwealth and state governments get it. On this score, our state government in New South Wales has been particularly aggressive.

The state government created a digital restart fund, an ambitious initiative to make New South Wales the digital capital of the southern hemisphere. Valued at AUD 1.6 billion, the fund is intended to protect existing systems, deploy new technology, and build out the cyber workforce. The state has also set an aspirational spending target of 30 per cent of the annual AUD 2.5 billion IT procurement budget on local SMEs.

Now that’s a big deal.

The value-ad of local procurement

Why single out local IT? In the age of COVID-19, economic recovery doesn’t happen without digital resilience. If anything, the continuing rise of cyber attacks on critical infrastructure targets (e.g. the Colonial Pipeline, Ireland’s health service, and countless government and private-enterprise assets in this country) demonstrates the extreme fragility of the post-pandemic economic recovery. Without a corresponding push towards digital resilience, we are just a coordinated attack away from pipeline shutdowns, loss health services, or worse.

That’s where local SMEs come in. A bulwark of sovereign capability, local SMEs help ensure the data security and availability of our most critical public assets.

Takeaways for local SMEs

What can local SMEs do going forward? For the most part, the ball is in the court of procurement agencies. But local SMEs can better understand the traditional purchasing motivations of those agencies – motivations against which buy local purchasing schemes are meant to militate.

Most buyers prefer known vendors, according to Gartner analysts. In fact, many only consider approved and known vendors when it comes to both new and replacement purchases. Tech debt and sunk costs explain the lazy purchasing trend.

If you’re an SME pushing critical infrastructure protecting innovations, you’d be well advised to recalibrate your sales and marketing strategy around countering these biases. Some common-sense measures include:

• Build user communities to cement trust
• Lead with free demonstrations of your services
• Create content that disproves risk
• Ask satisfied customers for testimonials

While our products have the innovation edge, known incumbents have the market advantage. To compete, we need smart customer acquisition strategies, to make ourselves better known to government procurers before they start the next buying cycle.

For us, the revenue dividend will be enormous. But for the country, there’s benefit too: not just jumpstarting our post-COVID recovery but ensuring that the best critical infrastructure protecting innovations get in the hands of the people charged with keeping our people, places, and key assets safe. 

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