Across the Digital Nation: Work the sales opportunity early and often

Rishi Sood

Given the slow but steady rise in state and local government IT spending, this is a good time to review some characteristics of this market. These characteristics provide insight into both the buying habits of agencies and the environment for new technology decisions. More importantly, understanding these characteristics will help vendors align their sales and messaging initiatives.

The long sales cycle is the one of the most defining and complex issues of the market. From needs identification to vendor selection in government usually takes a year to 18 months for standard procurements and up to two years for more complex deals.

To be ready for the request for proposals, vendors must educate and influence agency officials on major technology strategies and requirements, while taking care not to cross the line after procurement begins. Vendors that sit on the sidelines waiting for the RFP will almost always be playing catch-up.

Another key characteristic is the participation of nontechnical decision-makers. In the procurement of new solutions, political officials, agency directors, and functional employees, such as case workers, tax auditors and police dispatchers, as stakeholders, often are as important as the chief information officer. Vendors must not only seek out these groups, but also help educate them on the business benefits of new technologies. This may require a high degree of expertise about the agency or the business process.

Funding is always important. Agencies often have a variety of resources they can draw from to support new technology projects. Money may come directly from the general fund, through federal matching grants, IT bonds, regulatory fees and special purpose fees. Vendors must be aware of these sources and, in some cases, work with the agency to get them.

The state and local government market can also be divided by two major points of technology acquisition: centralized management information services departments and independent MIS organizations in agencies. Each group serves different roles in the government and require a different set of IT services. Centralized MIS departments tend to focus on horizontal services such as data center and seat management and the management of large, jurisdictionwide projects.

MIS departments within the agencies are more narrowly focused on the defined mission and goals of the agency. Police departments require computer-aided dispatch systems, while human services agencies implement eligibility determination systems. Vendors must show deep domain expertise to address the needs of these organizations.

Last, state and local governments typically are risk adverse organizations with respect to the deployment of bleeding edge technologies. Public sector personnel place a high priority on using proven technologies already tested by other agencies. Although events around homeland security have created an increased willingness by public sector agencies to try new technologies that save lives, the mainstream government decision-maker cannot afford to take risks in the deployment of new technology solutions.

With state and local government IT spending expected to grow from $45 billion in 2005 to $48 billion by 2006, vendors must be aware that these opportunities are being shaped today. Vendors must understand the key dynamics shaping new technology acquisition and position themselves accordingly.

After all, it's the early bird that catches the worm.

Rishi Sood is research vice president with Gartner Dataquest in Mountain View, Calif. His e-mail address is rishi.sood@gartner.com.

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