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 The end result is an outdated approach — from procurement to delivery — that ultimately leads to poorly-executed digital services.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

6 charts to help entrepreneurs and investors understand the business opportunity in government

e.Republic has published a series of graphs that provide an overview of the state and local government market, and it’s a great reference for investors and entrepreneurs trying to better understand the business potential.

Here are six that stand out.

1. State CIO Priorities – 2016-2018

eRepublic Charts

2. U.S. State & Local Government

eRepublic Charts

3. Units of U.S. Local Government

eRepublic Charts

4. 2017 State & Local Government Annual Spending

eRepublic Charts

5. 2017 Government IT Spending

eRepublic Charts

6. 2017 State & Local Govtech Spend By Segment

eRepublic Charts

More at Government Technology.

Beta government

West Carrollton BETA

West Carrollton BETA

For those unfamiliar with the concept of beta, it’s a term used in software development to push a public prototype to get design and functionality feedback, as well as test and report technical bugs before launching the project as an official service.

Standard operating procedure for government digital services is to create an extensive specifications document and develop a waterfall project management strategy for executing. Once the project is finalized internally, it’s released to the public as-is without any intention of collaboration or feedback from those who will actually use the service.

Beta has eliminated the fear associated with a big launch. Knowing that beta is the beginning of a collaborative process eases that fear and creates a feedback culture that is much-needed in digital government innovation.

More and more, particularly at the federal level, such as Vets.gov, government is releasing web-based projects this way, even openly and proactively discussing the beta as part of an on-going, iterative process. Locally, larger cities such as Boston are also going beta.

Beta as described in 18F’s “Project Stage Definitions“:

Stage and test working software on the public web for use by a subset of the target audience. Implement changes based on user behavior and feedback. Resolve policy compliance or technical integration issues. Define and then validate statistically significant metrics for improvement.


The objective of this phase is to build a fully working prototype which you test with users. You’ll continuously improve on the prototype until it’s ready to go live, replacing or integrating with any existing services.

U.S. Department of Veterans Affairs:

This beta release of Vets.gov is just a beginning. We’ve launched it with deep content in the two benefit categories you’ve told us mean the most to you: disability and education. There are many more to come. We’ll be adding new information and tools ongoing. But we wanted to get vets.gov in front of you now, as we build it, so you can tell us what’s working for you and what isn’t.

At ProudCity, we’ve launched our first city beta and, as a government service provider, we’ve learned a great deal about traditional blockers to innovation, and how we can help overcome them. It’s exciting to work with governments who embrace the beta mindset, especially knowing the end product, particularly for true software-as-a-service offerings, will only get better over time.

If you work inside government, demand beta from your digital services providers and bake it into your acquisition process. If you have the luxury of an internal development team, begin building the culture and communications strategy for deploying this.

There are internal, cultural, procurement and process issues governments must address, but ultimately it’s worth redefining the way services are delivered, and these obstacles are easier to overcome than you might imagine, and will be as more governments adopt the concept of beta.

Beta government is the new standard.

e.Republic expands model to venture capitalism, funds first startup

Government media and events company e.Republic is expanding its business operations to include funding civic-focused startups, in hopes of leveraging its Rolodex of government officials to help serve as a channel for sales and marketing to those ventures it supports.

e.Republic’s first beneficiary of the new strategy is ArchiveSocial, a social media archiving service that targets government agencies to help meet records retention policies. The company also makes the archives searchable to the public, as it has done for cities like North Carolina and Austin.

“Too often, new companies with great solutions to public-sector problems don’t have the resources, know-how and reach to truly scale,” e.Republic CEO Dennis McKenna said in a press release announcing the $1 million round of funding that includes capital and marketing services. “We’re launching e.Republic Ventures to help companies with exciting public-sector solutions overcome these hurdles and win in the government market.”

According McKenna, on the e.Republic Labs website, e.Republic Ventures is “an accelerator to assist select early-stage companies go to market with their game-changing solutions.”

e.Republic was founded 30 years ago by McKenna and operates a number of media properties, including Government Technology and Governing, as well as the research and consulting services operations Center for Digital Government. It also hosts numerous local events annually that connect government officials with sponsoring vendors.

The announcement of the direction corresponded with the appointment of Dustin Haisler as e.Republic chief innovation officer and head of e.Republic Labs. Haisler joined eRepublic in April.

Given that the challenge for most early-stage government and civic-focused startups is gaining credibility within government and then breaking through procurement red tape, e.Republic’s new direction should prove useful and lucrative for those companies it supports.