By Peter Carr
Director & Principal Consultant at Councilio
Within Australia and New Zealand’s multi-billion dollar local government software market a number of key technology companies regularly vie for selection across over 700 Councils. Replacing core business systems is a significant and costly undertaking not to be approached lightly and Councils must consider that no single vendor has a dominant strategy in what Councilio would describe as a purely cyclical market.
Despite regular consolidation through mergers and acquisitions, the overall revenue and growth numbers of the top 10 providers supports a view that the local government software market operates as a Nash Equilibrium which describes “a stable-state in a multi-person situation where no participant gains by a change in their strategy as long as the other participants also remain unchanged”.
Under these conditions assessing technology partners purely on written tender responses and presentations can lead many Councils to the erroneous conclusion that all software does the same thing. While that is correct to some extent procurement processes can often obfuscate the real differences that have a material impact on the alignment of vendor technologies to business outcomes.
Rather than focusing on “technology trends” we’ve pulled together a list of eight head-to-head distinctions that make a real difference to highly-aligned vendor selection. Ignore them at your own peril.
Digital Customers vs Engaged Staff
The “digital” trend remains high on the agenda of local government executive management and vendors continue to address the concept of “customer” in a number of ways. Delivering true customer-driven processes means providing software that is focused at two-ends of a spectrum with staff at one end (via self-serve staff portals and mobile applications) and customers at the other (through front-end registered-user services portals). But it is in the middle office where clear differences emerge. Therefore Councils should look carefully at the level of interface and process change throughout the application including in the often neglected data processing middle office.
Data Management vs Management Data
The underlying data model for the majority of systems is based on either Single or Multiple Relational Databases with Multiple Data Field Associations. In layman’s terms that equates to master data management complexity which is most evident – not in workflow or integration – but in reporting capability. Understanding the difference between data management and management data is a key point of difference especially in relation to ongoing investments in skills and complimentary technologies.
Pretty Interfaces (HTML 5) vs Smart Applications (Core Processors)
The transition to dashboard, mobile and natural view HTML 5 interfaces has been underway for a number of years and will continue for many more. For the customer that means that today’s integrated solutions have a number of different user interfaces based on the particular vendor’s development road-map – typically an older Windows Client, a newer Browser Client and an emerging Mobile Client. The challenge for Councils that are assessing change today is to ensure that informed decisions occur based on functional and data capabilities over and above the visual appeal of Browser and Mobile Clients that may in reality be a re-skinning of an old piece of software. This is not happening enough.
Furthermore, the current application boom is not just about a new pretty interface. An important part of the redevelopment journey is driven by the opportunity for modern applications to maximise use of innovative computing processors. When compared to the old “distributed processor models” that required computing processes (based on system transactions) to be queued for execution, modern i5’s, i7’s etc. allow for parallel processing based on improvements in core volumes. But faster and smarter processors only work with smarter and re-coded software. Put simply, old software on new technology will still run like old technology. Beauty is more than skin deep.
Integrated Systems vs Best of Breed
A local government requires a number of key software solutions to operate: Finance, Asset Management, Customer Management, Property, Planning, Regulatory, Web Content Management, Records Management, Spatial, HR, Payroll and more. There is a clear movement away from best-of-breed system architectures and towards multiple functional systems from a single vendor within an overall integrated solution. This presents some benefits for Councils in reducing the number of vendors to manage but also provides challenges and considerations for business owners who are used to the deeper functional capability of a best-of-breed solution provider. Therefore, if Councils continue to under-invest in internal IT integration capabilities, in order to move towards true east-west process integration, Councils must be prepared to move backwards in some functional areas.
Best Vendors vs Market Leaders
No single vendor is right for every organisation; which partner is right depends more on business requirements than technology. Far more than questions like “how much will it cost?” or “can you do it all?”, good Council decision-making requires executives to go deeper and look for clarity around business capability.
The style of business questions that tend to elicit better fit-gap selections include “Is rating revenue a majority percentage of overall income?”, “Will Council frequently restructure its operational environment?”, “Is council in a rural or regional location?”, “Does Council have adequate technology skills outside of its blue collar technology staff?” and “With which other companies does Vendor X partner?”. In any case, the best vendor may not be the market leader and the market leader may not be the best vendor for any given Council in any given year.
Cloud Computing vs Outsourcing
Regardless of the service delivery model, cloud (or versions of it) is not an approach that absolves Councils of their poor systems training approaches. Rather Councils need to provide better investment in ongoing staff training at all levels from system administration to system super users to system reporting and information hierarchies. Cloud is not the panacea that will improve bad management practices. Generously allocate training budgets to existing vendors. Send finance staff for budget retraining on systems ahead of the next annual cycle. Consider carefully the capabilities of potential cloud-enabled shared service provider models not underpinned by adequate system skills in the providers own staff base.
Financial Management vs Chart of Accounts
Many (most) demonstrations begin with a discussion around the Chart of Accounts – a mind-numbingly vacuous but critically important part of the assessment journey. It is important to know that today there are key differences in the way each software vendor presents the best way to implement “The Chart”. The Microsoft financial platform vendors are becoming increasingly significant and will seriously challenge the old-guard in the coming years as Councils seek to devolve financial management capability throughout the organisation. To be effective this practically means functional redaction in the account strings to allow lay-person accountability and improved data entry quality (i.e. addressing the “what account is this?” problem). Filters, Dimensions, and Skinny GLs are the new word in Cost Centers, Tasks and Activities.
Marketing Roadmap vs Innovation
If innovation and transformation is a driving agenda item then make sure it influences the buying decision. Roadmaps are not indicative of innovation. Marketing is not indicative of innovation. Merger and Acquisition is not innovation. You need to go much deeper to assess innovation.
Council’s don’t build major infrastructure without consulting engineers. They don’t defend claims without seeking legal advice. And they don’t operate with impunity without oversight from financial auditors and tax advisors. In the same way, more and more Council executives are realising that technology is a profession no different from engineering, law, or finance; or any of their other significant specialist business disciplines.
About Peter Carr
Peter has been part of the international tech analyst and management consulting communities, including periods at Gartner and Forrester, since 1999. In 2018 he was appointed the Director of City Innovation at one of Australia's six state capital cities where he led the technology and smart and sustainable city portfolios covering energy, lighting, smart transport and micro-mobility, smart parking, climate infrastructure and the IT and industrial IOT technologies programs for four years. Peter now provides trusted advisory and consulting support to public and private organisations across the Asia Pacific region.
Understanding tested by experience. Innovation. Digital Disruption. Digital Transformation. Sustainability. Technology. Business Systems. IoT. Smart Cities. Digital Infrastructure. Digital Twins. Industry4.