Government: The Lost Opportunity
Many partners feel that even if by any chance they get into a government contract, it will be difficult for them to sustain.
One common observation especially amongst the vendors or principals has been their increasing dependence on the potential of the Indian government vertical. While most companies, ranging from hardware to software to IT services, were plunged in probably the worst crisis in their relatively short life during the slowdown, it was the increasing automation initiatives of the government, plus its relative insulation from slowdown that made it such an attractive proposition for most IT companies. That the Indian government has finally opened up on the technology automation front, both in terms of budget as well as complexities of the adoption, is great news indeed for the Indian IT industry and all its stakeholders. But at the same time while it is making me happy and excited, I am feeling equally sorry and apprehensive; and worse still, it is often leaving me flabbergasted when I contemplate the opportunity lost. Yes, I am talking about the channel partners who strangely seem to be a little aloof from the government opportunity.
So what’s the reason for this anathema towards the government? The common grouses seem to be that government tenders are designed more towards the vendors and principals and gives little opportunities to partners to participate. More likely they will get eliminated in L1 itself. Also, many partners feel that even if by any chance they get into a government contract, it will be difficult for them to sustain. While government contracts are now quite lucrative and they are safe too (payments are always made), the payment cycle is too long and it often takes a long time for the money to come. Partners mostly run their businesses on a rolling working capital and a long payment cycle makes it almost impossible for them to offset the losses to their businesses. Vendors with deeper pockets and with working capitals coming from their parents overseas are in much better position to effectively absorb the challenges of a long payment cycle.
Since most partners fall under the SME category, it is high time they start taking advantage of various government schemes for SMEs to manage their working capitals better. That will help them with running funds so that they can go out more aggressively for government projects. Does it sound like frying fish with fish fat only? It might be so, but that is the only way to create a level playing field for all as far as government projects are concerned.
We at PC Quest will try to bridge this gap between channel partners and the government. Therefore from this issue, we will highlight the government activities in a particular state, which can help partners interested to get involved. Please write to us on what more information you want about government.