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 The end result is an outdated approach — from procurement to delivery — that ultimately leads to poorly-executed digital services.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

GSA issues software-as-a-service request for information

Photo: White House

Photo: White House

The General Services Administration has issued a request for information related to the federal government’s use of software-as-a-service.

From the announcement:

Unified Shared Services Management (USSM), with the guidance of the Shared Services Governance Board, is seeking information from industry to understand their capability to provide standardized solutions across administrative services, as referenced in Office of Management and Budget memorandum M-16-11.

The RFI inquires about interoperable and modular approaches to delivering common technology solutions and requests feedback on the viability of the Federal Integrated Business Framework as a documentation source to inform the development of a software-as-a-service offering. The RFI also solicits input on the potential opportunities for public-private partnership funding models.

Full RFI on FedBizOps.

Government (software) as a service

Photo: White House

Photo: White House

Originally published on Engaging Local Government Leaders

Like government, software-as-a-service is ubiquitous.

The operating systems that run our phones are frequently issued updates to provide better functionality or security protections. Other services, such as Google Apps, NetFlix, Amazon and every social media platform, also follow true SaaS development models: release updates often to everyone.

As consumers, we appreciate this frequency. It makes us safer and the user experience is more enjoyable. By paying a nominal monthly fee, we constantly experience a better product, and numerous consumer surveys show satisfaction rates for these services is consistently high.

Imagine if today you were forced to use Google, the iPhone or Facebook from five years ago, with less privacy, security and general user experience elegance. Unfortunately, most residents, businesses and tourists visiting a city website experience a five year-old iPhone.

Currently, the model for government technology solutions is a stand-alone offering: A technology vendor — sometimes advertising itself as SaaS — will set up a single instance of its product and only update it if you renew or upgrade your license.

The other model is a services-based approach, where cities pay someone to manage custom software updates. Typically, this model works when cities are fortunate to have one or both of the following:

  • A large budget for third-party development services
  • An internal team of developers, designers, product owners and IT project managers

Given the budget constraints of most cities, coupled with challenges in recruiting technology talent, these two options are still relatively unattainable or unsustainable for local governments.

Most cities today purchase web services through an outdated process, developing a highly-detailed request for proposal that calls for overly-customized and unnecessary requirements. The timeline from beginning to end could be 12 months, with the delivered end product being outdated immediately on the day it launches.

Meanwhile, the SaaS alternative has been improved exponentially over that same period, and never truly expires (For example, ProudCity follows a two-week release cycle, and all users immediately realize the benefits without incurring additional charges.)

With SaaS, the business model is scaling one product and constantly making it better, taking an economies of scale approach to resources.

Email SaaS provider MailChimp has a great explanation on why it is more important for them to focus on scale:

It allows us to keep our overall pricing down while maintaining a feature-rich application and continuing to provide great support. We want MailChimp to be accessible and affordable for all of our customers.

And, with respect to the impact of software, Netscape founder Marc Andreessen famously quipped, “software is eating the world”:

More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.

Andreessen said this in 2011, so we’re halfway there. Even his venture capital firm, Andreessen Horowitz, is beginning to invest in the government technology industry. Other firms such as GovTech Fund are fully focused in this area, so the market is ripening for technology disruption that will only benefit government leaders.

As more and more of us begin to rely on the web to interact with government, the relationship between great online experience and government satisfaction is increasingly interconnected. According to the Accenture report, when citizens were asked “Which of the following would change positively if government improved digital services?,” they responded:

  • “My belief that government is forward looking” (73%)
  • “My overall satisfaction with government” (72%)
  • “My willingness to engage with government” (72%)
  • “My belief that government is efficient and effective” (70%)
  • “My confidence and trust in government” (62%)

As part of our first ProudCity Pilot Program, we worked with the city of West Carrollton, Ohio, to prove the SaaS model works incredibly well and defies traditional thinking on how government web services can be managed. West Carrollton’s previous website was eight years old, and they moved the entire site, and a number of functions offered by legacy vendors, to the ProudCity platform in 60 days.

“To be honest, when we started the project, I didn’t think that would be possible,” West Carrollton Public Relations Coordinator Erika Mattingly told Government Computer News.

Not only was West Carrollton able to move quickly with SaaS, they’ve also quickly started to migrate services from legacy vendors to ProudCity — services we didn’t offer four weeks ago. Because of this, they have already started to re-evaluate and streamline internal processes using these new tools.

Fortunately, cities are beginning to realize the benefits of true SaaS with companies like ProudCity, SeeClickFix,NextRequest, Romulus, OpenGov and a growing wave of other modern, civic-focused technology providers who are helping reset government expectations when it comes to digital solutions.

As more and more government leaders start thinking with a software mindset, making their digital operations easier to use and ever-evolving, they will scale public service and offer amazing civic experiences to those they serve at costs significantly lower than before.

Those that don’t will continue to serve with a five year-old iPhone.

Given the ubiquity of both government and software-as-a-service in our lives, it’s only natural they are starting to work more closely with one another.