Ontario Government In Review

1. Ontario Government In Review Presented by: Frank MacKinnon Ontario Small Vendors Association In Collaboration with York Technology Association

2. What Do You Want Out of This Session • Expectations • Current level of Government of Ontario contracting • Interest in co-venturing

3. Agenda Setting the stage Getting to “GO” Learn from the leaders Taking the next steps

4. Ontario Small Vendor Association • Who We are: • We are that part of the SME with less than 200 employees which has made the Ontario Government an important part of our business plan. • What we do: • Initiate, promote, and facilitate enduring business relationships between the small business community and their customers in the public and (eventual) private sectors.

5. Ontario Provincial Government Purchase Decision At A Glance Provincial Auditors Accountability Decision Making & Implementation Premier Cabinet Ministers Central Agencies Premier’s Office Government Services Cluster / Ministries Agencies Boards & Commissions BPS Central Procurement Province Municipalities Queens Park Universities Schools Hospitals

6. Things You Really Should Know • Program / Projects – Important to understand the connection • Who makes decisions – No one person makes any contract decision • The janitor can send a project into tilt mode; if they are on the committee, which is quite possible if they are to be the implementer

7. Things You Really Should Know • How to Sell to Government – Procurement 101; 201 • Where you can get training, why it is important, and, why it probably won’t help you sell at the Cluster/Business level • MERX – How MERX plays in the greater scheme • What you will find on MERX, and • Where you will find the rest (the bulk) of the unsolicited business

8. Ontario at a Glance • 70,000 employees • 28 Ministries • Eight I & IT Clusters • Land and Resources I & IT • Central Agencies • Community Services • Health Services • Children, Youth and Social Services • Economics and Transportation • Justice • Government Services Delivery

9. Ontario at a Glance • Extremely complex environment • Can be difficult to navigate • While lucrative to some, can be disappointing to others • Vendor Supply Chain - 45,000 Vendors

10. Ontario At A Glance • Uses an array of technologies • Could be considered leading edge • Has a common component policy • To reduce redundancy in technology

11. Ontario At A Glance • Uses MERX for RFPs and VOR (RFS) • Procurement policy for acquiringservices and/or products • Uses Vendor of Record process • Management of Vendor Community (Supply Chain) • Pre-qualifies suppliers • Has open policy for unsolicited proposals • To encourage innovation and initiative from the vendor community to meet a unique need

12. Government I&IT Structure • 1 CCIO – 8 CIOs • CTIO responsible for CIO needs

13. Cluster Responsibilities • Serve the IT needs of like Ministries. • Have Service Level Agreements (SLA) and other penalty facing agreements in place with Ministries to ensure best service practices • Have their own IT Services organization setup to support Clusters at this level.

14. Cluster Responsibilities • Serve the IT needs of like Ministries. • Have Service Level Agreements (SLA) and other penalty facing agreements in place with Ministries to ensure best service practices • Have their own IT Services organization setup to support Clusters at this level. • Intent on removing redundancy in services • Help desk, email, Desktop, etc. • Currently reviewing ways to expand IT services internally. • Looking to private sector to assist in delivery.

15. Government Message • One of the biggest challenges is the lack of knowledge at the Vendor level. • A weak economy! • They believe in what they are doing! AND, they know better than us the restraints of their procurement policies. • Serve the taxpayer, consumer and business. • Its all about Service!! Health, justice, Insurance…

16. Initiatives / Programs / Projects • Initiatives: • Think tank opportunities • Not just for the big guy! • Programs: • Concepts become Initiatives that when funded (millions $) become Programs, out of which better service to the community is realized • Projects: • Spin off program deliverables

17. Decision Making • Design/decision by committee – a safe approach • “Who was ever fired for buying IBM?” • Consider the Influencers… • Those responsible for project deliverable • Are often found below line management • Tend to have the ear of the CIO

18. Decision Making • How is this different from the rest of us? • Government staff are measured by their ability to deliver on time and to follow the established procedures • Failure will likely result in loss of bonus and/or promotion… • The point is… understand and respect what is behind their motivation regardless of whether you believe in it • They must deliver it

19. Structure Prospecting and Lead Generation • Lead Generation • As VOR you are already qualified for this market • Don’t need brochures but have a good elevator speech

20. Structure Prospecting and Lead Generation • Lead Generation • Listen carefully and remember it’s not about you • These people meet with hundreds of sales people who promise the world. How well you listen will be what you will be remembered for.

21. Structure Prospecting and Lead Generation • Lead Generation • It is like time with the CEO - most of the time you get ½ hour • Understand what information you need to gather • Be real clear on what you need to impart

22. CCIO • Know who you are talking to. Not unlike the Private sector, the government relies heavily on its foxes. Your challenge is to determine who they are. Watch for those quite voices and 3rd party consultants. • Strategic, Think Tank, Out of the Box, Keen on concepts. • Reports to the Deputy and is very aware of the politics of his office. • It may be too high…if, you don’t fit the profile, there is likely a better person to talk to.

23. CIO • Reports to the CCIO and is very aware of the politics of his bosses office. • Is either dynamic, or, career (cautious) staff • Responsible for delivering on initiatives / programs. • Is always on the look for winners. • Largely responsible for developing an equal playing field for all vendors.

24. CIO • Relies heavily on his Directors and Heads of departments. • Will listen to creative ideas for improvement that will leverage his resources and improve quality of service. • If, you fit the profile, the CIO can be an excellent resource. Be aware of an extremely busy calendar.

25. Structure • Directors… • Responsible for driving Program and major Project development. Most senior Managers report at this level. • Heads… • Most often responsible for technology assessment and direction. • Senior Manager… • Project Management and delivery

26. Structure • Broader Public Sector (BPS) • Hospitals, Agencies, Roads, etc. • Ontario I&IT • Ministries, Health, Justice, Education, etc. • What this means to the You! • 45,000 Vendors • Vendor of Record Procurement Practice • Fair, Competitive & Transparent!

27. Central Procurement • MERX- RFP routine • Invitation to VOR & General Vendor Community • RFP becomes the contract • Contracts in general allow for 10% change, only! • VOR - RFS routine • RFP solicitation – every 3 years • A few refreshes at 18 month interval • RFS is generally for bodies, not, project ownership • Usually offered to 3 – 5 VORs (1 winner) • +1,000 released per annum

28. Central Procurement • Auditors - Internal • Objective to ensure fair & transparent process • Most troublesome to staff • While rarely used, could be; by either party • Supply Chain Secretariat leading development of standardized procurement practices

29. Central Procurement • Legal - Theirs • Theirs protect the government • Minimize ambiguity • Can seem very difficult, but! • Must work with hundreds of private sector legal advisers

30. Central Procurement • Legal - Ours • Ours protect us, if, they understand the process! • Best to use lawyers who are familiar with government • Can cause serious delays, if not cancellations

31. Central Procurement • Note: • The government always has a runner-up. At their discretion they will fall back to this position. • Many contracts have been lost to lack of understanding, or, the unwillingness to take risks! • The more government experience your lawyer has the greater the chance for successful negotiations.

32. Who’s getting the business • The government likes to deal with large companies or groups that have clearly defined leadership • Tend to be specific in focus • Have the attention of the government • Minimizes the effort to inform & education

33. Expenditure Reports – prepared by OSVA • 2007/2008 Vendor Expenditures • Who is getting the business and how much of it • Where to focus your valuable resources • Identify companies already well positioned • Identify partnership arrangements • Be aware of the time and tenacity it takes

34. Expenditure Reports – prepared by OSVA • 2007/2008 Vendor Expenditures • Greater than $50,000,000 • Greater than $20,000,000 • Greater than $10,000,000 • Greater than $5,000,000 • Greater than $1,000,000 • Greater than $100,000 • Less than $100,000

35. Companies who get it

36. Who’s getting the business • The real players invest in the future • They focus and they are reliable and dependable • They appear to be favored over the rest • They appear to be large companies

37. Who’s getting the business • What they are is committed… • They’re in for the long haul • They build those important relationships • They take a chance on risk • They support their sales team • They meet their objectives and experience success!

38. Other Considerations • eHealth – Agency (quasi Public operation) • 1.15 billion $ • Revamping the entire Health system for Ontario • Only 10 years behind schedule • They are in a mess!

39. Other Considerations • Clusters – Justice, Community, Health… • All have major objectives / initiatives • Be aware and try to separate from the crowd • Learn the business of the Cluster • Become strategically important to their needs! • Note: A single Cluster could meet your business objective for the year!

40. Insurance and the WSIB • The WSIB is a separate business unit and therefore is responsible for their own welfare. • That being said they are driven to protect the best interest of the Government, business, and the general public. • Insurance is not a bad thing, in fact it protects us all. So, what’s the problem? • The Government is trying to figure that out, as we speak! There are many inside government who agree that the demand for insurance, especially from small companies/projects can oversize the actual value of the work to be performed. • Watch for changes to the procurement process.

41. Vendor Community • The government needs companies of all sizes. That is it needs to be able to leverage the Billions $ large multi-nationals invest in their products and services. • The government also knows that large companies often means large dollars for adjunct products & services that are available through the SME.

42. Vendor Community • Dilemma! Large companies also means financial stability, extensibility, project management, accountability, knowledge and knowledge transfer. • The Government would like to direct more work to the SME, the question is how to do this and protect the interest of the government / taxpayer. • Using eHealth as the example, the government must appear to always be fair and transparent.

43. Vendor Community • SME - Is a dilemma! • While small business has large business aspirations, it isn’t always in the position to wait, support, and/or demand it’s rights • Small Vendors tend to think they must do more, give up more, and perhaps suck it up more!

44. Vendor Community • SME - Is a dilemma! • Perhaps on their own, they very well have to! • The government needs the SME, the question is how to use it and safe guard the project/$$. • Recent economical crisis has had a greater than major impact on the industry overall. • The SME needs to protect itself from this sort of thing in the future. • So, what’s the answer!

45. Vendor Community • SME - Has to appear to be larger than life • It represents +90% of Canadian business. This is amazing, but, it is true. • Here’s a fact…I think! • The government has stated that it wants to do more with the SME, the question is how!

46. Vendor Community • Here’s How… Invest, Organize, Educate, Position! • You can do all of this by working together, as a community with autonomy! • The YTA, and the OSVA are excellent examples of unobtrusive communities.

47. What to do right away • Invest in the relationships and manage your expectations • Watch MERX • Refresh VOR list in September • Collaborate and present a unified face • As much as possible use government experienced lawyers • Get a debrief

48. Thank you and have a great day! Frank MacKinnon OSVA