What government needs to know when purchasing software-as-a-service

Photo: White House
Photo: White House

e.Republic published a best practices guide to procuring software-as-a-service, and the conclusion is a must-read for anyone in government responsible for technology purchases.

There’s a lot of misconception around software-as-a-service, its general standards, as well as how it can best be purchased and deployed. Legacy government technology vendors continue to sell government “SaaS” when it’s often bespoke services. Governments continue to specify software needs through highly customized requirements. The end result is an outdated approach — from procurement to delivery — that ultimately leads to poorly-executed digital services.

The conclusion of the guide is reprinted here with permission from e.Republic:

Many governments still try to buy XaaS through traditional procurement methods and standard contract terms and conditions, even though what they are buying is fundamentally different from traditional IT. This approach is not working.

Procurement processes that require strict conformance to prescribed specifications and unique terms and conditions are ineffective in the current technological environment. They were originally developed to acquire products, not services. Effective procurement achieves timely results and good outcomes, and protects the public’s interest. That is all still possible through a more flexible, services-centric approach. Continued over-reliance on traditional state and local procurement policies, rules or statutes impedes effective procurement of technology services and unnecessarily inflates both a project’s cost and delivery schedule.

The XaaS model of today relies on standardization and consistency in code, process, security and, ultimately, a business model supporting the delivery of service over the Internet. XaaS delivers value and benefit for its users because services are not unique to each purchaser. This creates tremendous efficiency and economy of scale. It may, however, require significant changes in government business practices.

If state and local governments want to take advantage of this service model, policy makers — finance directors, auditors, procurement officers, attorneys and elected officials — must reconsider and modernize their controls and processes that now create barriers to accessing these services. New ways to provide transparency and accountability must be identified and used that not only protect the public interest, but also enable the purchase of XaaS technology when appropriate.

New Jersey CIO Steve Emanuel asked, “What actions can we take? What things can we quickly put in place that will give our work value and create benefit for our states and the taxpayers?” The answers include:

  • Use the model terms and conditions to frame these new service relationships
  • Make the changes necessary to modernize and improve the procurement infrastructure and acquisition processes
  • Develop alternative controls that protect the public interest and allow the use of XaaS when it best meets the need

The rapid proliferation of these service offerings is profoundly changing how the world does business. State and local governments must not isolate themselves from that change, but rather position themselves to embrace and benefit from it. It is the time to set aside outdated practices that inhibit progress, and move confidently toward a new set of commercially proven practices and procedures that support innovation, collaboration and economy through Internet-based services

Download: Best Practice Guide for Cloud and As-A-Service Procurements

About Luke Fretwell

Luke Fretwell is the founder of GovFresh and co-founder/CEO of ProudCity. Connect with him on Twitter and LinkedIn or email at luke@govfresh.com.

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