Reports about how government frameworks are failing SMEs have been quick to highlight that despite the healthy number of SMEs registered with such initiatives, only ten per cent of direct government spending has found its way to them. Taken at face value, this figure may seem surprising – particularly since government has made significant efforts in the last few years to increase opportunities for SMEs to do business with the public sector.
But by measuring the success of government procurement frameworks purely in monetary terms aren’t we passing up an opportunity to recognise their wider impact?
Ixis was one of only three Drupal specialists to be accepted on to the first iteration of G-cloud back in 2012. Since then, we have generated over half a million pounds of revenue through the framework and it has become an integral part of our growth strategy. Whilst this is something that we are proud of, it is not the only benefit that G-cloud has had on our business and through sharing experiences with other suppliers, we know that we are not alone in this.
So here are five ways in which I believe procurement frameworks can have a positive impact on SMEs:
1. Opening up opportunities
Through G-cloud, Ixis has won contracts with government departments and leading local authorities, including a Drupal support and maintenance contract with Bristol City Council to help them improve their deployment processes and streamline the development of digital services. Would a small business with 18 staff have been invited to tender for such high value projects under previous procurement processes? Who can say with certainty, but then again experience would suggest that this is unlikely. One thing I can say with absolute certainty is that the projects that we have won through G-cloud have helped to open up the public sector market to us and to pave the way for contracts with other organisations, such as the Care Quality Commission, and Healthwatch England.
2. Levelling the playing field
Where once the public sector was solely the domain of the large systems integrators, procurement frameworks have created a level playing field where talented specialist suppliers can see who they are competing against and benchmark themselves against comparable businesses. Such programmes can, in effect, act as a marketing channel for SMEs, providing
a platform from which they can showcase their services and expertise – not only to potential customers but also to potential business partners.
3. Building credibility
The value that government frameworks add to small businesses can often extend beyond the boundaries of the public sector by building confidence and providing a level of credibility that supports sales activity into other sectors. In our case, the contracts we have won through G-cloud have helped to position us favourably in other markets, including the private and third sectors, and have contributed to new business wins in these sectors.
For SMEs that take an open approach to business, the transparency of procurement frameworks is highly attractive. Open pricing structures and the publication of financial transactions create opportunities for SMEs to compete on factors such as experience, skills, processes and value-added services rather than get railroaded into a race to the bottom to be the most ‘economically advantageous’ supplier.
5. Local economy impact
The contracts that SMEs win through government frameworks – both directly and indirectly – contribute to their overall sustainability and growth, providing a boost to local economies throughout the UK. The growth that we have experienced since being accepted on to G-cloud has led to us doubling our workforce. We don’t offshore our contracts so the economic value of these jobs has been retained within the local area. As an open source specialist, we really value this opportunity to give back to the local economy since it reflects one of the founding principles of the open source community.
Posted by Chris Haslam, Co-Founder and Commercial Director of Drupal open source specialist, Ixis.