Government & SME: Can it be better?

The UK Government has pledged to use the services of more SMEs for the delivery of major projects. In moves welcomed by the SME community, the stranglehold of the major providers has been reduced, giving rise to highly successful initiatives — like the cloud computing targeted G-Cloud — that level the playing field for smaller players.

But even as SME provider numbers and sales grow in line with favorable policy changes and increased spending targets, many are still struggling to compete, leaving room to further raise the value of small enterprises to public sector buyers. This is the view of TechUK, the main body representing the interests of the tech industry, who released a 6 point plan last week to help the government improve how it works with SMEs.

Scalability and service integration throws up the biggest obstacles to the creation of a stronger working dynamic. Offering scale to the government is perhaps the most substantial barrier to wider procurement. When pitching in tenders against the Big 4 consultancies, with their broad range of disciplines, the precise solutions offered by SMEs often come up short without the trimmings of a full-service package. This in turn prompts the government to revert to long, costly contract commitments with its usual partners, for ease of use.

Similarly, if the government brings together a collective of smaller companies to deliver a big project, but is forced to find a way to oversee a variety of management processes, it is likely to return to a major consultancy for support — or ask them to take over the running of the project in its entirety. While uniqueness is their calling card, SMEs are disadvantaged if they can’t work together to achieve a common objective.

Issues like these undermine the government’s mandate to procure services based on quality and outcomes rather than who is behind the delivery. TechUK’s plan responds to this by making recommendations for how the government can engage SMEs more widely. However, SMEs can’t rely on the Government making wholesale changes to its process, so they need to ask themselves what they can do to better position themselves as government service providers.

One solution may lie with the local government. On the back of greater devolution of financial control from Chancellor Osborne, councils across the UK are showing their willingness to procure services in a more agile manner — which is set only to continue in response to the ongoing realities of austerity. In bringing on board expert yet affordable suppliers that can be closely managed, local authorities can benefit from the very specific outcomes that SMEs offer. Suffolk and Kent, for example, have set themselves up as trading companies, learning to broaden their reach into the public sector to ensure citizen value. More can follow their lead and augment the value of entrepreneurs in local communities. At the same time, SMEs that make clear their capabilities and working methods will elevate themselves to procurement teams.

SMEs can also look to counter the complexities that multi-vendor collaboration poses to the government by building flexibility into their delivery methods, thereby enabling integration with other similarly-sized contractors. Can they be agile in their services and processes? Failing to be could mean they fall under the oversight of a bigger firm — inevitably quashing their ability to showcase their capabilities — and lose out on further national public sector opportunities in the future.

It’s clear that progress is underway but that more needs to be done to bridge the remaining gap between government and SMEs. The landscape is ripe for niche businesses to help with the government’s digital modernization; in the same way, the government can prove it truly stands behind its vision to operate more nimbly in line with the requirement of the times. With questions remaining about how to overcome challenges, like scalability and integration, forging a consistently fruitful path for the SME will take longer than a few short years. Perhaps in the government’s very act of tapping the innovative approach of the small enterprise for project services, the best ideas for addressing these challenges will arise? Only time will tell.

About the AuthorTim Kempster Contributor

Tim is a Programme Director with extensive delivery experience in both the public and private sector as well as the bridge between them. Tim has been involved in setting up and delivering many challenging programs – most recently for the NHS and Department of Health.