Fujitsu’s UK CEO Duncan Tait has said that how the government works with large suppliers and how it works with SMEs is “horses for courses”.
His comments come shortly after the government released data detailing how its direct spend with SMEs has increased to 10.5 percent, up from 6.5 percent in 2009/2010. Also, indirect spend with SMEs, where smaller companies form part of a big supplier’s supply chain, was up 2.9 percent in the past year.
Fujitsu released research this week – perhaps unsurprisingly - claiming that the success of SMEs in winning government contracts hinges on collaboration with larger firms. The survey of 500 SMEs found that just 6 percent of SME owners believe it has become easier to win government contracts independently in the last two years, despite a number of reforms being introduced.
According to Fujitsu, some 58 percent of SMEs believe that smaller and larger suppliers should collaborate to win large contracts.
Tait told Computerworld UK that he believes it is possible for the government to increase its direct spend with SMEs to 25 percent by 2015 – a target set by the Cabinet Office – but large suppliers will need to stay in place for the projects that need scale.
“I would say that it is absolutely possible to get that level of spend with SMEs, I don’t see any reason why it wouldn’t be the case. But this is horses for courses stuff, if you have got critical national infrastructure, that does need a company like Fujitsu that is capable of doing heavy lifting,” said Tait.
“In that situation if you put that type of work with an SME directly, I think you put the SME at risk, and I think you put the program at risk. Where you have heavy lifting to do, that’s where larger suppliers like Fujitsu work.”
However, despite being very positive about the government SME agenda, Tait also said that he thinks the government needs to boost its efforts to work with the big suppliers, which are currently under pressure from the Cabinet Office.
“I also think the government has the opportunity to save more money sooner, by large suppliers and government collaborating more together. For example, we believe that over three years or so we could reduce fraud in the benefit system by £10 billion. That happens to be quite difficult to do across government at the moment, but I believe us collaborating across government could lead to a big advantage for the tax payer,” said Tait.
“And by the way in our fraud and error solution, there are several SMEs in the supply chain for that.”
When asked how this collaboration with government could play out differently to how it has in the past, given that the government is looking to avoid costly, inflexible projects that have a high risk of failure, Tait said: “In the way industry engages with government and government engages with industry I think there is the opportunity to have more of a constructive dialogue there. “
When pushed again on how exactly this dialogue should be pursued, apart from traditional contracts and frameworks, Tait was unable to provide an answer.
However, he was keen to point out that Fujitsu currently has 794 SMEs it works with in its supply chain and some 27 percent of its expenditure goes directly to SMEs. He said that he is also looking to increase the number of SMEs Fujitsu works with by 5 percent.
“Collaboration is key here. Where you need an enterprise scale balance sheet and scale in the company to take on some of the risks – I think it becomes very attractive for SMEs to work with larger companies,” said Tait.
“Where we have SMEs in our supply chain, the SME would be delivering value to government and would be front and centre in our solution.”