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The Truth About Customer References

The Truth About Customer References

CIOs who accept favours in return for saying good things about vendors are putting themselves and their careers in jeopardy. And so are the CIOs who listen to them

SIDEBAR: Different Strokes for Different Governments

In Australia, no mandate from above prohibits government IT execs acting as vendor referees

Public service codes of ethics are seen as the best bastion against potential trouble for Australian public servants wondering whether to agree to allow their agencies to act as customer reference sites.

Steve Alford, general manager government online infrastructure with the National Office for the Information Economy (NOIE), says he is not aware of any firm federal government stance on the issue. But he says a number of general principles outlined by the Australian Public Service Commission relating to appropriate behaviour by departmental officers, and embracing issues like conflict of interest and probity, are available to guide public servants' personal behaviour.

Alford says Commonwealth officers should not agree to accept inducements of any kind from vendors, whether for personal or corporate gain. However, as frequent early adopters - particularly in the early stages of development of a product - governments are often asked permission by vendors to be listed as a reference site. "That means that basically you say: 'Yes, we've installed the product, these are the business issues that we were dealing with, and this product is installed to help us deal with those issues.'"Generally you'll find that when Commonwealth officers speak - as they often do at conferences and those sorts of things - the things they mainly talk about are the business drivers that were leading them to develop a certain strategy and the outcomes of the project. Any mention of the software that assisted in that process is purely incidental, really."

On the other hand, Alford says, those charged with the purchase of services on behalf of the Commonwealth recognise the value of being able to consult with fellow Commonwealth officers listed as vendor referees about their experience with products.

And he says there is another dimension to the issue, given that government officials are on occasion called upon to support trade missions organised by the Department of Foreign Affairs and Trade to promote Australian ICT companies. But Alford says public servants need to be constantly aware of the limits of such situations. He says he was approached recently by a company he does business with to sit down with the investors. He declined, conscious that he risked providing advice these investors might rely on which would turn out to be unwise.

The other issue Commonwealth agencies need to be aware of is the emerging trend for agencies to decide to take on a "sophisticated, often expensive" solution to a business problem, with the business case predicated on them getting other agencies to work with them on a cost-sharing basis. That puts the Commonwealth officer potentially in a conflict of interest, since the business case internally is predicated on sharing expenses, and convincing people to share those expenses is predicated on getting other agencies to accept that this is a worthwhile product or worthwhile solution to the problem. "My preference in those cases is to scope the project early and identify if this is an issue before you go to tender, and identify your potential partners in the process ahead of time, rather than inviting them in as a potential sales person after the event," Alford says.

The situation is similar at state level. Randall Straw, executive director, Multimedia Victoria says the Victorian Government does not have a central policy on departments or agencies acting as customer reference sites, but leaves it to the determination of individual agencies.

Victorian Government agencies have often acted as customer reference sites, he says. "As a buyer, the Victorian Government usually seeks out other government customer reference sites because the exchange between government to government is often more frank.

"The public service codes of conduct and employment conditions prohibit individuals from benefiting from purchasing decisions," Straw says.

The attitude is much the same in Queensland, where John Parker, director Government Technology Queensland Government, says there is no policy on customer reference sites since the government has an industry development program, which would fly in the face of not being a reference site. "We have a case-by-case basis and the agencies make up their own minds in terms of whether or not they think it's appropriate. And therefore by default I, and this agency, would assist them where possible - particularly in the case of Queensland businesses, if we've done business with them and we feel that it's a reasonable product," he says.

The policy is different for multinationals, he says, with agencies more reluctant to agree to act as a reference site in those cases.

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