Should governments and customers consider buying from regional IT companies?
thing is for sure; if Asian governments are committed and serious about
helping their local software industry, they have to buy more home-grown
governments in Southeast Asia have setup agencies and associations to
support and promote the local software industry. The Software Park and
SIPA in Thailand, for instance, are government agencies, which were
established to stimulate the development of the Thai software industry
and promote the products created in Thailand.
But how strong can you push a product you are not using yourself? This
question is not only valid for the domestic markets, but also on the
international stage, as exports of ICT and especially software products
are way up on the agenda of those agencies.
In most South East Asian countries, local governments are the big
spenders on information and communication technology and if the
“champions” are not buying local, how could they expect the private
businesses or international markets to buy the products? So all the
marketing efforts and development grants to local companies by the
government agencies might result in nothing, if the governments, as the
major investors in ICT, are not leading by example and buy the products
they want to promote.
So, what is stopping them?
It is certainly not a lack of solutions or availability! Every country
I have visited lately has their own, sometimes vibrant, software
industry, which already has produced a wealth of products covering
areas such as enterprise resource management (ERP), customer
relationship management (CRM), various operations support systems and
other applications, which are commonly tendered by their governments.
However, most requests for proposals or RFP’s published by the
Southeast Asian governments specify requirements, which can only be met
by mainstream players such as SAP, Oracle or Siebel, just to name a
few. Typical requirements in this context are over-the-top project
references, often in US dollar terms, decades of experience and
financial terms, such as performance bonds and bid bonds.
Why is it that the entry barriers are so hard for local companies to meet?
I strongly believe we are looking at the fear of failure of the decision makers.
In most countries failing a major project is directly related to job
security issues. Moreover, government officials are often not very well
trained and have difficulties understanding technical requirements,
project life-cycles and project dynamics, which further contribute to
their fear. So, the overwhelming reason not to buy local solutions is
the fear, which always has been a bad advisor and that has not been
changed since the 70’s and 80’s, when the IBM’s of the world won almost
The common excuse when a project failed then was: “What do you want?