Selling IT to the Indian State

The Ministry of Information Technology was set up with much

fanfare some time ago. The Government of India is making a lot of noise about

promoting IT, as seen in the passing of the IT Bill. There is talk of promoting

exports, improving telecom infrastructure, and encouraging e-commerce. These

efforts are laudable but I feel that the Government can do much better. It can

make the local IT industry explode by just simplifying the norms by which

government departments procure hardware and software and hire IT people.

The Indian State is, by and large, the largest potential user

of IT in the country. I use the words Indian State to mean both central and

state governments, their departments, undertakings and all corporations in their

control including public-sector units (PSUs). This combination of users presents

a potent market, probably much larger than that of all private-sector users put

together. The following examples will serve to illustrate the potential size of

the market.

• would estimate that less than 5 percent of government
  
  departments have computerized their accounts. There is a potential market for
  
  lakhs of accounting packages, along with attendant hardware, networking, and
  
  personnel.

• Billing services
  
  for utilities such as electricity, water, and telephones, are computerized
  
  in only a few dozen cities and that too in crude data-processing mode. There
  
  is enormous potential for IT enabling here.

• Most direct tax
  
  departments such as those dealing with sales tax, entertainment tax, etc,
  
  are not computerized. Departments can substantially improve tax
  
  administration by using IT.

• All government
  
  departments with whom returns are filed can benefit enormously by allowing
  
  filing on electronic media.

• The judiciary is
  
  swamped with files and paperwork. A thorough Business Process Reengineering
  
  (BPR) and IT enabling can do wonders.

It is simple to

find many more examples such as these. Another way of understanding the size

of this market is to simply imagine a PC on the desk of every sarkari

white-collar worker.

What, then, is holding up the exploitation of this market?

The answer is simple–the utterly dated procedures employed by government

departments in the procurement of IT assets. The norms and procedures used for

the acquisition of hardware, software, and IT personnel are totally out of tune

with the market. Most of these procedures are designed with the stated intention

of eliminating corruption and assuring that the buyer gets the best deal. The

paradox is in the way these procedures work, for they wind up virtually

guaranteeing that the buyer gets anything but the best deal.

The flaws in the procurement process can be best illustrated

by studying how the average state department acquires custom-built application

software. Most state departments try to follow a process of tendering for the

award of development contracts. However, a detailed specification of the system

needs to be developed before calling for development bids. The system

specification has to be preceded by a detailed systems analysis. The department

doesn’t have the people at hand to do such an analysis and external

consultants are needed. Such consultants must be engaged, once again, through

the process of tendering. What normally happens is that the department tries to

look for the lowest cost consultant, with the result that the specification

document is often of poor quality, inconsistent, and full of holes.

Major anomalies abound in the subsequent tender. First, the

consultant who writes the specification is normally a participant in the

contract development tender. He has a major advantage over the other

competitors. Second, there is virtually no one available in the department for

clarification of system specifications. Technical queries go unanswered. Tenders

are normally evaluated on cost basis and the evaluation team is usually composed

of people with no systems experience. Innovative ideas make little impact on the

evaluation team, who will normally work by rule and eliminate anything that they

cannot understand. Finally, corruption rules the roost.

Given all this, it is no surprise that the quality of IT

systems used by the State is what it is.

The bottom line It’s time that the Indian government threw

away archaic procedures for IT acquisition. Everyone will benefit immensely. n

Gautama Ahuja, a contributing editor

of PC Quest, runs a turnkey software development company, AHC Infotek, in Delhi