Make IT spending transparent
A FLURRY of IT contracts have been awarded over the last 12 months. Going by one report, the total amounts to over RM1bil.

The report only specified contracts given to listed companies. More IT contracts could have been issued by government bodies to private companies.

What is surprising about this flurry of contracts is that the current government is expected to be more austere.

Furthermore, a year ago, Prime Minister Datuk Seri Anwar Ibrahim said he wanted the reliance on consultants by civil servants significantly reduced.

The question is whether the contracts could have been awarded at a lower cost, with civil servants playing a bigger role by dealing directly with vendors rather than using consulting third party IT firms.

Yet, some of the contracts look like they could have been formalised directly between the government bodies and the actual hardware or software companies.

Maybe there is a justification to use these third party contractors but the public needs to know what that is. Furthermore, it would do good in the name of transparency for the government body to explain in detail why a particular company was chosen for the project.

Did they have a better track record or were they cheaper? And why is it that that the government body could not carry out the project itself, dealing directly with the primary vendors?

One example is a RM356.56mil contract awarded by the Ministry of Finance (MoF) to Edaran IT Services Sdn Bhd, a unit of listed Edaran Bhd . The contract is for the “rental of hardware and software for the Sistem Maklumat Kastam for the Customs Department.

No doubt, IT systems need to be upgraded, even at regular smallish firms.

What happens then is a request for proposal, typically followed by the company owner squeezing the vendors or consultants to get the best value.

Are the government agencies dishing out these big contracts doing so? If they are, it would do them good to inform the public.

The government needs to also reveal all other fees it is paying to consulting firms.

There has been growing criticism of how governments use big-name consultant firms to conceive major plans.

These firms create wonderful plans, get paid a lot of money, but are not responsible for executing those plans. There are many plans that fail to achieve their intended outcomes, but who is taking responsibility?

Civil servants the world over have been said to be outsourcing their roles to consultants.

Star Biz7 had previously highlighted one hard-hitting exposé that exemplified this practice in a book aptly named “The Big Con: How the Consulting Industry Weakens our Businesses, Infantilises our Governments and Warps our Economies”.

The book posits that government reliance on consultant companies has greatly enriched the latter while undermining the capacities and capabilities of governments and retards innovation. Although the book was referring not specifically to IT consultants, presumably the same applies.

Every year, we bemoan the Auditor-General’s report. We throw our hands in the air and fuss about the excess, corruption and the sheer bravado of civil servants who get away with a lot of hanky-panky.

The best way to tackle the issue is to ensure all data points are revealed to the public when a contract is awarded, not five years down the road when we realise that money has been wasted.

No one is against IT projects. The world is moving at lightning speed in terms of technology. We must upgrade and improve as a middle-income country that leads to higher income. Technology is a good enabler but it needs the highest level of transparency.

When speaking about the over-reliance on consultants by civil servants last year, Anwar said he did not consider engaging private consultants and lawyers as unimportant, but that the expertise and skills of civil servants needed to be recognised.

“The capability and level of expertise among civil servants are there, and need to be utilised to restore the image of civil servants as the best in the country and the region,” he said.

That should be the way forward for Malaysia.

This article first appeared in Star Biz7 weekly edition.
Star Biz7,IT contracts,third party contractors,civil servants,outsourcing,consultants,consulting firms,transparency
A FLURRY of IT contracts have been awarded over the last 12 months. Going by one report, the total amounts to over RM1bil. The question is whether the contracts could have been awarded at a lower cost, with civil servants playing a bigger role by dealing directly with vendors rather than using consulting third party IT firms.