Performance Metrics – Are they the missing link in government procurement?

What metrics define a successful procurement? Is it the time it takes to go from an RFP to a new contract? Is it the number of disputes on a particular contract? The metrics around procurement are murky at best. But the National Association of State Chief Information Officers is trying to clear up some of the confusion. They have just released a new report that looks at the biggest procurement risks for states.

Alex Pettit is the Chief Information Officer for Oklahoma. He is also the author of NASCIO’s IT Procurement Risk in States issue brief.

Pettit told Chris Dorobek on the DorobekINSIDER program that nearly half state CIOs express some form of dissatisfaction with the current form of IT procurement in their state.

“IT procurement still leads the service. When you think of IT as a discipline itself we still have a lot of things that are innovative that are coming out and are driven by the vendor community. But we weren’t developing apps and then having Steve Jobs come along and say ‘hey I need to build a platform to support them.’ It was the other way around. So we are still seeing in our businesses that hardware technology leads the service. As long as that is the case we will be very dependent on the procurement process,” said Pettit.

The risks of function points

“One of the big risks surrounds function points, the size of what it is you are doing, so when you are looking at an application very often we don’t really know how complex something is because we have nothing to measure it against,” said Pettit.

• If you are bringing in a new child support system that’s roughly the same complexity in terms of function points as Facebook. That is about 10-12,000 function points.
• But if you are brining in something new like an ERP solution that’s a quarter of million function points.

Communication gap

“There is a tendency particularly in project execution to suppress things when an issue arises. In Oklahoma we do the procurement on a wiki so everyone can see the questions and answers. There is no doubt about when questions are being asked of vendors or when the question were originally posted or answered,” said Pettit.

Transparency in procurement executions

“What happens in execution is that very often we don’t have the same level of transparency and we need to bring more to the execution process. Transparency allows you to surface and address problems more quickly. We don’t have enough exposure on how many disputed contracts there are. We need performance metrics,” said Pettit.

Measuring the right metrics

“What we inspect is what we get. We need to change so that what we inspect is what we expect. What we expect is successful implementation of procurements,” said Pettit. “CIOs are rated on operational things and as a consequence they really are not participating and delivering the strategic things because we don’t measure that,” said Pettit.

Solutions to the metric question

“In Oklahoma we have a core group of procurement people that just do IT. We’ve centralized IT procurement. As a consequence we’ve had no disputes in 3.5 years. But we need more performance metrics, because performance metrics are the single greatest determinate of human behavior,” said Pettit.

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