Tier 2 SIs Take 'Smart Sarkari' Plunge

The projects and schemes rolled out by the Central and State governments have brought enormous business prospects for SIs and SPs. Banking on their domain knowledge and expertise, the tier 2 SIs are not only making money from government but building a sustainable business in the Government domain

Determined to transform India into digitally and technologically advanced country the Narendra Modi led government has announced several ambitious schemes and projects. The projects like Make in India, Digital India, 100 Smart Cities, eGovernance have created a lot of buzz where technology is going to play a major role in enriching the lives of citizens. This is might be for the first time, the government has placed a lot of emphasis on the technology driven development. Therefore, various stakeholders in the technology domain are contemplating to play a major role in these government initiatives. While several IT MNCs are betting big on the government projects, solution providers and system integrators who are responsible for the successful execution of these projects have rightly grabbed the opportunity in the government business. Leveraging on their expertise and domain knowledge, several large scale SIs and SPs are making good money from the government.

SIs/SPs heading large scale Govt projects

Gone are the days when the system integration business was restricted to integration of devices and technologies. The modern SI business has moved beyond integration and it has transformed into solutions and consultancy. The change in the central leadership has given a ray of hope to the many aspiring SIs and SPs who are keen to explore their expertise in the government domain and contributes to the infrastructural development of the nation. There are many large scale SIs and SPs who are engaged in crucial government projects and schemes.

Projects like Smart Cities requires continuous up gradation, hence, these projects are continuous in nature. Therefore, SP and SIs have a big role to play in such kind of projects. Traffic management, waste management, electricity management etc. are some of the important elements of Smart City projects where SPs could have involvement in the actual deployment of the solutions as well as the management of the infrastructure in future. Mumbai based Allied Digital Services has been closely working with the Nodal agencies on Safe City projects. The solution provider recently completed the Pune Safe City project. “Safe City is the foundation of any Smart City as safety is the first requirement for any Smart City. We are engaged in various digital infrastructure initiatives rolled out by the government. These kinds of Safe City projects and Digital infrastructure projects require special expertise. We have the capability to integrate and automate large and multiple systems. We leverage on the technology and expertise we have to execute large scale and challenging projects”, says Paresh Shah, CEO, Allied Digital Services.

When it comes to security, CCTV surveillance becomes a need of an hour. SPs like Abacus Infotech help the government to choose the right solution for a robust security mechanism. “We are working with few government projects related to surveillance and access control system. Before we design the BOQ, first we understand the customer requirements. In IP surveillance solution apart from CCTV camera, it is equally important to design the network and storage solution which support the IP Camera. In access control system, we design the system so that no unauthorised person can access the area and if they try to access then system can send the alert to concern department or a person on a real time basis. We feel that this is the top most criteria for any surveillance and security system and we always consider this criteria as a higher priority and depending on that we design our entire solution”, says Jatin Mehta, CEO, Abacus Infotech.

To get government contracts SPs have to be technically very strong to understand and prepare the solution for the achievement of the end result. Also, they need to have strong internal practices and a general sense of commitment to project at all the levels in the organization. Delhi based Amtrak Technologies is involved in various eGovernance programs run by the Center and State governments which largely help in ease of delivery of Government services to both businesses and citizens.  “The way businesses are done has changed considerably. With the ever evolving scenario and the connectivity, there are no more geographical boundaries of doing business. Today, the delivery of excellence solutions and services and growth is not in metros or class A cities. If we really need to be a superpower we need to take the digital connect to the last citizen in the village and here the role of SPs become very crucial to bring all on a common platform of a digital connect”, says Sandeep Arya, Chairman, Amtrak Technologies.

The new government aims at empowering each village through IT tools and applications. This provides immense opportunity to be part of the larger IT canvas and play roles of equipment supplier, facility management and IT support from the perspective of a firm of our size. As the Government and Citizen are realising the benefits of technology, hence more and more departments like Health, Cooperative, Mining, Power Generation, Water Resource, Public Distribution, School Education etc. are expected to go for IT based solution. Old projects like APDRP, VAT, eDistrict, SDC, SWAN, Treasury, Panchayat already tested the success and will definitely go for state wide expansion and will generate new opportunities for local SIs.

Indore based SI Business Automation is working on very ambitious “Center of Excellence” project. The company has developed a citizen centric application-eDistrict that runs in 400 Lok Seva Kendras. eDistrict is one application roof that is delivering all key state services to citizens through CSC (Common Service Centres) and M.P online ( Kiosk based urban & rural IT footprint) – operating successfully through more than 3000 kiosks in the state of Madhya Pradesh.

Raj Kumar Jain, Director, Business Automation says that deep knowledge and expertise with these technologies have helped Business Automation to offer the desired solutions to the government. “We are registered with eProcurement portal, this reduces the procurement cycle, ensure maximum participation and best rates for the government. We have been able to drive our points like availability of data in meaningful form, established processes with well defined roles for system actors and acceptability of reports by lowest tier user are a few key facts that one needs to bear in mind before taking any leap towards automation using IT”, says Jain.

Astric Group is one of the prominent SPs in the state of Bihar who has been involved in various strategic government schemes. Astric Group is a registered SSI of Bihar and authorized Training Centre of C-DAC Advanced Computing Training School, which is a Scientific Society under Department of Communication, Government of India. Astric Group has signed MoU with State ICT Nodal agency - Bihar State Electronics Development Corporation Limited (BELTRON) to work as a knowledge cum technology partner for training and capacity building. “We have a state-of-art training infrastructure backed by a competent and highly qualified team of professional trainers and management gurus who are experts in their respective domains. We are associated with the multiple Ministries in Government of India for training and monitoring of skill and employability enhancement programmes in Bihar”, says Prabhat Kumar Sinha, Director, Astric Group.

The Patna based SP is working closely with the Bihar Institute of Public Administration & Rural Development (BIPARD), Bihar Education Project Council (BEPC), C-DAC & NIELIT under Ministry of MOIT for training and ICT readiness of government work force. Astric Group is also associated with NIESBUD, under Ministry of Skill Development and Entrepreneurship, Bihar Rural Livelihood Project (JEEVIKA), and Welfare department (BMDVM) for various Employability Enhancement of Rural BPL, Scheduled Category, Underprivileged Masses and Entrepreneurship development of Bihar.

SPs and SIs are mentors of technical concepts as they lead IT vision of any department. More importantly, they realize the sustenance which is imperative to run the show while imbibing technical and conceptual changes on the way. Kolkata based Future Netwings is giving their expertise in the projects such as West Bengal Smart City Project, Coal India and West Bengal State Wide Area Network. The solution provider had to go through a stringent selection process and other criteria to fetch these projects. “There are enormous opportunities in the projects like Digital India, NOFN, Smart Cities, Data Centers etc. Government clearly lacks expertise to implement the same without specialised partners-that’s where we see ourselves playing a role”, says Jaideep Chakrabarti, MD, Future Netwings Solutions.

The Aadhar enabled payment systems have been bringing drastic changes in the banking and finance segment and with the government linking all the crucial schemes to Aadhar it is going to be the next big venture in the country. Significantly, the big wave of Aadhar enabled payment systems has compelled the Banks, Switch companies and Wallet companies to revisit their infrastructures and business. UID aims delivery via multiple Central and State CSCs to reduce the gap between citizens and the government and will reduce the erosion of money reaching the actual beneficiaries. Therefore, UID is another prominent field for SPs to get into. Chennai based Precision Group is closely working with the Central government on the AADHAAR project. Precision Group provides solutions such as AEBAS (Common portal for all the Govt employees for their Time and Attendance requirement and the authentication using Aadhar database), eKYC for identification of individuals for A/C opening or Loan approvals etc., AEPS, Two factor / Multifactor Authentication, and Centre Audit trail tools.

“We are a significant player in 7^th and 9^th pillars of Digital India. We will be expanding our portfolio, which is also in sync with the Digital India plan. Our Deep knowledge and expertise in Aadhar/UID, Biometrics and also on Material science differentiate us from the rest of the typical ID vendors. We will be focusing on the identity based business, productising the other biometric products and also diversifying in the areas of IoT and its associated areas”, says Anbumani –Vice President, Precision Group.

Certain state governments such as Maharashtra are placing a lot of emphasis on the e-Learning projects and Smart schools. Laser Telesystem has been executing e-learning projects in small town and Zilla Parishad in Maharashtra. “We have the expertise and solutions for   e-learning which we are promoting to government as well as private educational segment. We have developed educational solutions for smart classes, which are economical and viable”, says Atul Atre, Director, Laser Telesystem.

Engagement with Govt Not everybody’s cup of tea

The government domain looks very exiting; however, it is not an easy game to play. Right from bureaucratic approach to slow decision making and from corruption in the tendering process to uncertainty about payment, solution providers find hurdles at each and every level while executing the government projects. Though the government claims to have brought down the number of approvals from various authorities, the real scene is not very promising. The Single Window scheme is yet to become the reality to provide a true ease of doing business in India. Therefore, SPs despite of having expertise and domain knowledge restrain themselves from engaging in government projects.

Delays in validations of projects and payment reimbursement are the major concerns of SPs while working with different government authorities. The problem further deepens if there is a change at the top level and every time SPs have to convince the same programs and schemes from top to bottom.  “There is a knowledge level gap between various departments and bodies. One of the major challenges in working with nodal agencies is lack of accountability. Government officials are not able to state application requirement properly in RFP”, says Ranjan Chopra, MD, Team Computers.

According to Jiten Mehta, the slow decision making is the major hurdle in cracking the government deals. “Government organisations spend 3-6 months to take the decision. Since the security industry is changing very fast, new technology or products are available in market every three months. In such cases, if the government officials take more than six months, then the product which is suggested by SI is either obsolete or new technology is available which has better features at the same or less cost”, says Mehta.

There is always an allegation of nepotism in government tenders. It is alleged that the terms in the tenders are favourable and beneficial for MNCs and local players hardly find any space in government contracts. Paresh Shah says that there is a need of transparency in the tendering process to provide a level playing field to the Indian companies. Secondly, the coordination and cooperation of local bodies is must in the projects like Safe City. “Government projects have involvement of various departments and that makes the procedures lengthy and time consuming. Secondly, the criteria in tenders are favourable to MNCs most of the time. The biggest challenge is a delay in decision making and execution. It took us nearly 6 months to execute the Pune Safe City project. We faced challenges in getting permissions from the local bodies. There was a lot of questioning and opposition from certain elements on the project”, says Shah.

Endorsing similar thoughts, Mehta says, “Government departments always select the lowest cost. In most of the cases, the government does not select the brand which is on the same level. Hence, the brand which has less features and low quality, always gets the lower cost benefit and hence the company gets the order. Most of the time, particular vendor gives the specification to the government and authorities without going into detail publish those specifications in the tender. We have observed at many places the product or solution which has been supplied by any SI or SP is not actually required by the particular government department. In such scenario, the government wastes their money.

Sandeep Arya says that government contracts are always one sided and it is the main reason to close the entry doors to many competent SPs and SIs in the government vertical. “Government deals are usually one way on penalties. These transactions are never on a level field on terms between the government and supplier. Whether the project goes well or not the sufferer always is the industry. Secondly, government contracts are always one sided and as a result these is enough pressure on industry to keep pushing everything so as to complete the cycle and try to get out profitable at the end of the project. These one sided contracts are the main reason why you see so many large IT companies that were doing well have vanished or are struggling to even survive. The industry loses one large System Integrator and many small players every year largely due to one sided contracts from the government”, says Arya.

Another pain area is clearance of payment. Delayed payments, bank guarantees and security deposits and low margins are the main challenges SPs face while dealing with government. However, Atul Atre feels that the major obstacle in government projects is not the bureaucratic working style of government authorities, but the vendors who allegedly influence the decision makers to fetch big government projects.  “We always blame government for slow decision making but actually it is not. Government is taking the decisions very fast but unfortunately vendors create lots of difficulties in process. Since government process is democratic, vendors create problems for the government officials who take decision. If government simplifies the payment gateway, lots of good SPs will get attached to government”, says Atre.

Similarly, Anbumani opines that though there are certain challenges in dealing with the government officials, with the central government placing a lot of emphasis on ‘correction’ in the systems, the scenario is changing drastically. “While most of the departments are dynamic and making the decision faster, but yes there are challenges in few pockets of government verticals. We have registered with DGS&D for procurement, this reduces the procurement cycle as the rates are approved by DGs&D. But some departments do not understand the deliverables of this contract and expect beyond the terms and even crush us on SLA and payment terms”, says Anbumani.

What SPs expect from Govt

The scope for SPs in the government projects is beyond implementation and deployment of solutions. However, most of the time they face harassment by government officials in getting various approvals. Even after a successful execution of the project, the government does not pay their dues in time and it ultimately puts a lot of stress on their business. With the new government taking many steps towards cleaning the system, SPs expect an ease of doing business.

Atul Atre says that in order to facilitate the growth of the home grown enterprises, the government should give them a fair chance to participate in the project planning and execution. “Since we are building infrastructure in India and it is a key focus of central and state government. Unfortunately, government is appointing certain agencies to evaluate the projects and many times misguided by them. Instead of that if government allows small vendors who are expert in that field to run pilot projects, they can easily compare and take decision about the quality and utility instead of making big budget project reports”, says Atre.

Rajkumar Jain says the government should clearly specify their expectations and roadmap to avoid the ambiguity. Similarly, they should make the tendering process easy and SI friendly. “At one side there is lots of push for early delivery and on other side installation or deployment road map not defined clearly which in turn result in a longer payment cycle. Very stringent terms without clearly defined roles and responsibilities at end user end and poorly designed solutions with no availability of connectivity are few issues where government need to look and improve. We are in discussions with authorities to clearly define the deployment process and time frame”, says Jain.

SPs have a lot of expectations from the GST and they hope that the new taxation policy will eliminate various discrepancies in the system. “We are eagerly awaiting GST to be rolled out which with do away with some much of red tapism when doing business in ONE country. Currently, so much energy is wasted in doing paperwork with so many different agencies for one transaction. So, hoping for ease of doing business and aggregation of spare capacities will be what 2016 looks like to me is the mantra for success”, says Arya.

Indian solution providers understand the Indian conditions very well and that gives them an edge over MNC players. On the basis of their industry experience, expertise and in depth knowledge of Indian work culture, SPs have found out their own ways to turn the challenges into opportunities. “We always recommend government bodies to pay a certain percentage against delivery and pay the balance payment immediately after installation. We recommend them to keep a certain percentage as a security deposit during the warranty period so that SI can provide support during warranty period and if they do not provide satisfactory service, then they can deduct it from the security deposit amount”, says Jiten Mehta.

Government projects: An Ocean of Opportunities

There is a huge scope of business in Citizen Centric turnkey projects under National e-Governance Plan (NeGP), DC/DR upgrade and virtualisation, Security & Surveillance and Mobility solution both in citizen centric central and state government projects. UID has been promoted as single mode of identity in India and Digital India ensures delivery of citizen centric services through defined and scalable infrastructure, modular application software etc. Whereas, Smart Cities are nothing but marriage of controlled IT infrastructure and service targeted applications that together converge to betterment of lifestyle of citizens. Therefore, all equipment manufacturers, IT solution owners and the IT learned which comprise of SPs and SIs as a community have a lot of scope and opportunities in the government domain. Similarly, biometric authentication has been gaining a lot of significance . Many private banks, financial institutes, educational institutes and even government departments are looking for this kind of authentication systems for security. Keeping an eye on the booming retail industry in India, many MNCs are opening multiple retail outlets in India and they are looking security solution not only for security purpose but also to increase their business by doing data analytics. Therefore, SPs could play a bigger role in these projects along with the vendors and ensure the prompt execution of projects. However, to complete this vision, SPs will have to give 100 percent commitment to provide best solutions and deliver the solution on time to give the benefit of advance technologies to common citizens and build a successful business in the government domain.