A decision-making framework for public procurement

29 July 2013 | Scott F. Selby, Director, Global Government Affairs, Microsoft Legal and Corporate Affairs

In my last post, I talked about the seismic shift we’ve seen in recent years, away from the black-and-white divide between open-source software (OSS) and proprietary technology. Today, you operate between those poles in a mixed-source world. You have freedom to choose best-of-breed solutions from a blend of sources and assemble the most effective mix of components for the job.

As always, freedom brings responsibility as well as choice. Now that you’re free to choose what you want in the mixed-source marketplace, how do you make the best procurement decisions and invest public funds as responsibly as possible?

Start by defining your exact needs for a project—before you begin exploring solutions. When I talk to government decision-makers and project managers, I make sure that everyone involved in a procurement project clearly understands:

  • The scope of the project
  • Its goals and specifications
  • The public sector problem being solved
  • The government vision that needs to be advanced

This clarity lays the foundation for evaluating your options across a range of OSS solutions, proprietary technologies, or both. The most effective tool I know for making good choices is a decision-making framework based on three pillars: tech neutrality, fitness for purpose, and total cost of ownership.

1. Technology neutrality

Tech neutrality means basing procurement decisions on impartial criteria that don’t favor any business or licensing model, development model, approach to intellectual property, or even a specific solution. With a tech-neutral attitude, you can fairly assess the merits of all possible solutions and choose the best combination of software and technologies for a given situation. Your decision will be based on vital criteria: cost (more on this below), interoperability, reliability, vendor support, ease of use, and security.

The pendulum lately has swung back from a bias toward OSS as an inexpensive cure-all. Many public-sector organizations are taking a more balanced approach. On the policy front, I’m seeing governments either repeal their former OSS-only stance in favor of tech-neutral policies or add tech-neutral thinking into the mix. Support for this trend is strong in the UN, the EU, and APEC, and in emerging as well as developed nations. On the procurement front, many governments that have tried OSS implementations have discovered flaws, difficulties, and higher costs, and have embraced flexibility over preferential procurement policies.

A comprehensive Microsoft catalogue, Neutral Government Procurement Policies, summarizes the experiences of some 30 governments and other organizations that have recently adopted tech-neutral policies, and points to the substantial benefits they bring to consumers, governments, and local economies.

2. Fitness for purpose

Any tech solution must genuinely address the requirements specified in the use case analysis of a given project. Simply put: Does the software do what you need it to do?

Consider the recent experience of Freiburg, Germany. From 2007 to 2009, the city began migrating to OpenOffice with the goal of making it the standard across agencies. They hoped usage would spread nationwide. But official records revealed user complaints including document conversion problems, instability, and crashes, and noted that workers still relied on legacy versions of Microsoft Office to perform critical tasks. The OSS solution not only failed to gain traction but also resulted in “reduced performance, anger, and frustration among employees and affected external parties” according to the official report. The city ultimately abandoned the effort and returned to Office. The German Foreign Office, it’s worth noting, also switched back to proprietary operating systems and office apps in 2011, after a nine-year trial of OSS alternatives on its 11,000 desktops.

3. Total cost of ownership

Licensing costs typically account for about 10 percent of software expenses. If you want to find real savings, look at the other 90 percent—the costs of migration, training, maintenance, security, and achieving interoperability. A clear-eyed accounting for the total cost of ownership over the lifetime of a product can reveal that low upfront costs don’t necessarily save money in the long run.

Here’s an example. In 2011, Helsinki, Finland, evaluated a cost-saving proposal to install OpenOffice on some 21,000 workstations in the city administration. The resulting study compared all the costs associated with migration and projected that OpenOffice would ultimately cost 74 percent more than Microsoft Office over a seven-year period.

Similarly, the Dutch Court of Audit in the Netherlands stated in its 2011 “Open standards and open source software in central government” report: “We concluded amongst other things that the potential savings the government could make by making more use of open source software were limited.”

You don’t have to take my word that these procurement guidelines really work. Just look at the experience of the many governments that are implementing them now and enjoying the benefits.

Have a comment or opinion on this post? Let me know @Microsoft_Gov. Or e-mail us at ongovernment@microsoft.com.

Scott F. Selby
Director, Global Government Affairs, Microsoft Legal and Corporate Affairs

About the Author

Scott F. Selby | Director, Global Government Affairs, Microsoft Legal and Corporate Affairs

Scott F. Selby, Ph.D., works with colleagues and governments around the world on policies that foster innovation and effective procurement frameworks. Read more