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Platypus Innovation Blog

22 June 2016

Agile Procurement?

Image from Brazil, a gloriously dark comedy about bureaucracy and power by Terry Gilliam. Actual relevance to this post: low, but I like the movie.
When it comes to software, public bodies spend a lot of money yet often have second-rate web-sites and systems. Why?

Partly, because high-profile software projects are difficult, and public-service software often has to handle lots of corner-cases that make off-the-shelf solutions harder to use. But partly it is their own fault: Public procurement sets up systems that almost ensure they will pay too much for second-rate software. Why?

One such model is the framework agreement. Companies first tender to be on the list to tender for actual work. Bureaucratic framework agreements create an overhead that eliminates most small software companies (who are of mixed quality but contain many of the best developers) in favour of large contractors (who tend to charge more, often a lot more, and deliver older and less flexible software).

I expect the bureaucracy is trying to manage risk & overhead: Do some heavy vetting once, then re-use it. But this vetting is of little value. A large contractor will submit their successful past projects, possibly carried out by teams who have no connection to the teams that will then work on the tender. A small contractor has less track record to draw on, so is at a disadvantage. Inspite of the care taken by procurement, government software projects often over-run or fail to deliver. Inspite of... or because of?

There are better ways to manage risk in software projects! We need Agile Procurement. Not procurement of agile software, but agile ideas in procurement itself. That is, procurement teams who work iteratively with the supplier and consumer teams, taking small short-term risks as the best way to manage costs and avoid large risks.

I'd also like to see multiple redundancy in procurement. Instead of betting everything on one big contract with one supplier... have several suppliers produce prototypes, at least for the early stages. If one supplier fails to deliver -- it's not a problem. This would allow for lighter touch procurement -- opening the door to SME software development companies. Given the difference in costs, I believe this would actually lower the overall price. It also allows more ideas to be explored, and it introduces some post-tender competition -- and hence better software at the end.

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