Hard to Convince

Hard to Convince

Decision making in the government sector is a different process all together. As a result, a partner needs to adopt an entirely different mode of discussion. ‘Mind your language’ is the first lesson. If you keep talking about Return on Investment (RoI) to a government sector customer (which could be a favorite word for a private sector enterprise), you are likely to get the least attention from him. “For a government sector customer, RoI does not mean anything,” adds Anantharam of Webcome.

Talking ‘pure technology or IT’ is also not the easiest way to get through, says Srinath of Shell Networks. “Sell him tools that can help him make his job easier. For example, give him ideas about how to get things at the click of a button or how to manage his file movements. You need to use an entirely different language to a government sector customer. You need to view things from his point of view,” adds Srinath.

Contrary to the popular notion that government sector customers generally have low awareness about technologies and market trends, most of the time they turn out to be amazingly well-informed and clear about the options available in the market. A majority of these customers today have consultants and nodal agencies who decide what latest technology is available for them. “Five years back, things might have been different. But we have noticed that the level of awareness about technology among the government sector customers has gone up dramatically. So, if you think you can sell ‘anything’ to the government, you are misjudging him completely,” says Subashini of Dax Networks.

Webcome’s Anantharam seconds this opinion. “They are open to all latest technologies. Some of them, in fact, take pride in owning certain products and technologies. If you go to a private sector customer with one of the latest and much-talked about technology, they would ask you to show RoI and give discounts,” he adds. M Prabhakar Kini, Chairman & Managing Director of Bangalore-based Kinfotech, says, “Government sector customers are very clear about their requirements. You can never fool them.” As a result, most of the government sector deals start with a ‘technology bid’. Those who are able to get selected in the technology bid would be eligible to participate in the ‘commercial bid’. M Venkat, Prime Mover of Bangalore-based 22by7 confirms, “From a technology perspective, it is easy to sell to the government.”

Chandrashekhar of AMD India says those who are not able to cross the technology bid should not have given quotation for such a deal in the first place. “A lot of partners try to drive the specification according to their interest. They are more interested in their own individual success. But they are missing out one point. The government is far more sensitive than many private sector customers when it comes to what they buy, as these decisions will have a direct impact on the needs of the citizens. A private sector customer can easily correct a wrong decision he has taken and look for alternatives. Such partners may be able to win once or twice, but it is equal to ‘killing the golden goose’. So it’s very important to understand their needs and address their business pain points.” Partners and vendors collectively admit that a PoC or a demo always helps in convincing a government sector customer easily.

Unlike other sectors, the government bodies take more time for decision making because of the long procedures as they go by documents and decisions of ‘committees’ and not by the decisions of ‘persons’. There is no way out but to abide with the government’s procedures.

Eyes Wide Open
The biggest grievance of partners when it comes to government deals are ‘delayed payments’. But is this delay only due to the red tape and bureaucracy? Not always. Vendors and even partners say such delays can be avoided to a large extent if the partners take extra care in reading the tender documents and also while preparing their quotations. Put the extra effort in and make sure all the papers are error-free. After all, one can not afford to make dreadful mistakes like missing out to add a few zeroes in the quotation document. “We need to be very careful while writing quotations. We have seen cases where a few partners forgot to add taxes in their quotations. In the government sector, once you finalize the tender, it’s closed forever. Had it been a private sector company, partners would have got chances to re-submit tenders,” says Anantharam of Webcome.

Most of the delayed payments and unsuccessful projects are because of overseeing certain terms and conditions in the tender or due to some goof-ups in the quotation. “We have witnessed cases where partners quote a price that’s less than the price at which they actually buy products from us. Sometimes in a bid, there can be up to 20 percent difference between the L1 and L2. This can mean only two things — either the L2 bidder was trying to get 20 percent extra margin or there was a major error in the quotation of the L1 bidder. And I would confidently say that all such cases happen only because of some unjustifiable blunders in the papers. We give the customer enough reasons to delay payments and later complain about it,” says Chandrashekar of AMD. He advises that partners need to have a ‘check-list’ of things that need to be taken care of.

Sunil Jose, Managing Director, Sybase India says, “Typically the government purchases are based on L1 requirements. We consider this and provide our partners with special pricing to make them competitive for the Request for Proposal (RFP).”

“One of the largest partners in the country was asked to submit three years’ balance sheet along with the quotation. He went on to his website, took last three years’ balance sheets and attached it along with other documents. Only later he realized that he was supposed to submit audited balance sheets. Negligence only gives room for more mistakes and thus reasons for extended sales and payment cycles. Such things can be avoided by preparing a simple check-list,” Chandrashekar adds. Lijhara of ADC Krone has the same opinion, “Government usually pays faster when 100 percent deliveries are made.”

Partners, who have been catering to the government sector for a long time, advise not to commit to too many things on paper. “Don’t get into too many commitments in writing, be it technical or commercial unless it is mandatory and feasible,” says Rao of Par Data Systems, revealing the rule of thumb.

Learn the Right Tricks
Even when everything has been considered, one needs to know some tricks to sell to the government sector. Partners, who have been successfully doing this over a long period of time, know the game very well. At the same time, for those systems integrators and value-added resellers who only recently started focusing on the government sector as an escape route from the downturn, it is going to be a tough task.

While we may tend to believe that personal relationships are of no importance in the government sector, experienced partners says relationships play a huge role, especially for identifying new opportunities and also in retaining customers. “Build a relationship once you crack a government deal. I believe a sale is never made, it happens. So, it’s very important to cultivate a relationship. Your first sale to a government customer need not be very big, but you will get a lot of up-selling opportunities with him,” explains Srinath of Shell networks.

Ananatharam agrees, “Personal rapport with the customers would help us get new enquiries. It also ensures that the client comes back to you for all their future IT needs. In fact, once you develop a comfort level with the customer, you can create new opportunities by suggesting upgrades and new products. He would be more receptive to people whom he knows well.”

However, one will have to build multiple relationships at multiple levels of a government organization to make sure one does not miss any opportunities.

Srinath of Shell Networks believes it’s not a great idea to attract a government sector customer with more and more discounts. “One does not have to jump in to give discounts initially. Because a government sector customer would get convinced by many other things like value of the product, its business benefits, etc.”

Why Government?
While there are many challenges to tackle when managing the government sector, partners still believe they are the trustworthy lot. They respect technology, they are clear about what they want, and they do not evaluate a solution based on the ‘look’ of it. They are like public sector banks where your money would always be safe. Once you manage to convince them, you don’t need to chase them for deals as they would come back to you for all their requirements. Partners also state that it is easier for them to get financing for government sector customers from banks and other sources.

Srinath of Shell Network winds up, “The wonderful thing about a government sector customer is that once you convince him, he would become your sales man. He would give you new leads in other departments as well and recommend you as a preferred partner to many others.” So take the tough path to own a treasure in the end.