Tender rule change raises stakes in ICT vending

Software vendors say the move will help increase sales since it will centralise the procurement process, thus making it easy to establish if the government is using and maintaining a genuine software.

The switch to the single IT platform will mean that government ministries or departments will no longer have to procure computer hardware, such as computers and servers and software independently as is the case currently.

This will in turn reduce the number of the computers or servers it buys annually and also the accompanying software.

For example, the 42 ministries will not have to invest on an accounting software individually, but will instead access and use one installed at the Ministry of Finance.

The same will happen with the human resource and procurement-related software.

It also means a reduction in the number of computer hardware that the government will have to buy, especially servers and hard disks, as it will only require a monitor and a router to connect it to the virtual server.

Proposed facility

The move comes shortly after the completion of an optical fibre-based infrastructure (Government Common Core Network (GCCN) that interconnects all the ministries headquarters offices, the ongoing interconnection of all districts headquarters and a proposed facility storage for electronic documents to be housed at Communication Commission Kenya (CCK) in Westlands.

A research on the impact of shared services in countries that have consolidated their government services such as US, Netherlands and home South Africa revealed that citizens benefit from improved services as they can get most of the information they require by just visiting a single government point thus cutting unnecessary trips to different government offices.

The government has already contracted a global IT outsourcing company, Accenture, to roll out this programme, which it says will start with consolidating the accounting IT platforms at the ministry of Finance.

Available statistics from the government show that the country’s spending on computer hardware and software in 1999 was estimated at $60 million with the public sector being the highest buyer mainly due to the precaution against the Millennium bug.

Information Permanent secretary, Dr Bitange Ndemo, says, last year alone the government bought 10,000 computers and laptops at a cost of between Sh50,000 and Sh110,000 per unit.

However, in the shared services he says, the government will only be required to purchase a computer monitor only at an average cost of Sh14, 000.

“The shared services will enable the government to optimally utilise the computer hardware and software by investing on what is required and scaling it up when need arises,” said Dr Ndemo. “With the current scenario, ministries are spending huge sums of money on software which they hardly put into use fully but continue paying the annual licence fees.”

The implementation follows the president’s directive early this year that, the Ministry of Information, Lands and the Judiciary format all their documents from the hardcopy to electronic format within a period of 14 months.

Industry experts and vendors, however say that although the move will impact on hardware and software vendors’ revenue in the short-term, it will offer opportunities for them to offer more value-added software and latest hardware to go with the virtualised service.

Mr Muchemi Wambugu, Director Technology Integration Consulting at Deloitte, says the move will enable the government to save on hardware and software costs by consolidating the various software licenses currently owned by different ministries and their departments.

The move, he says, also offers opportunities the software vendors to offer the government additional value-added software which is currently not possible due to budgetary constraints in but would now be possible as a result of the savings that will come with the rollout.

“The move will not only revolutionise how the government offers service but also make it cut its costs by avoiding duplication within the ministries,” said Mr Wambugu. “It will also enable government to retrain its staff making them multi-skilled before re-deploying them.”

Ken Mbwaya, managing director for Helwett Packard (HP) East Africa, says the move will reduce industry earnings in the short-term but will have a positive impact to both hardware and software vendors in the long-term.

Mr Mbwaya said the government is moving towards adopting the best practices globally which will cut wastage and enable it spend more on software or hardware that are really in demand.

Higher purchases

“In the short term sales may reduce but looking at it on the long-term it means more business for hardware and software dealers,” he said.

Mr Mbwaya says the government accounts only for 30 per cent of the industry’s revenue compared to the private sector which account for 70 per cent.

The situation is different in developed countries where government purchases are higher than the private sector’s.

Louis Otieno, Microsoft General Manager, East and Southern Africa says for software vendors such as Microsoft, the centralised system will eliminate the risks of some of the government departments using pirated software. This, he says, will offer Microsoft opportunities to make more sales to the government.

“With the current status , we cannot tell whether the software being used in most government ministries are genuine or pirated,” said Mr Otieno. “Unlike hardware which cannot be pirated, for software vendors the move will impact on us very positively.”

Through the centralised system, Otieno says it will be easy for the company to determine if the government is using and maintaining legal software.

A report released last year by ATKEARNEY, a research firm, shows that citizen-centric government requires more cross-cutting interactions across the entrenched vertical silos, high quality information and increased sharing information across the government.

Streamlining of services, says Tony Mwai, the regional general manager IBM East Africa, will enable the government to improve on its service delivery and also be able to quickly deploy the latest technologies.

Mr Mwai says with any consolidation, software and hardware vendors should expect a reduced revenue in the short-term.

“ With any consolidation there will be an impact on the revenues due to fewer purchases by the government but this is only on short term thing” said Mwai.

The government will be holding a public private sector forum aimed at building capacity of senior government officials in the implementation of ICT projects towards transformed public service provision.