Technology and PSUs – “An Odd Couple”

psu

Right at the outset, an important distinction needs to be made between technology enablement of the government and better management of 230 odd PSUs in India through IT. A recent study by Gartner suggested that Indian public sector’s IT purchases will grow at a CAGR of 14% between 2012 and 2017, reaching $108.5 billion in 2017. In 2014 alone, the PSUs are likely to spend about US $9 billion on technology, which is an increase of nearly 6% over the US $67.4 billion forecast for 2013.

While their heritage is somewhat similar, PSUs are closer to their private sector cousins in terms of their management and also their challenges.However, some common themes are true across all government owned and managed enterprises. Chief amongst them are

  • Capacity – The ability of the public sector organization to assimilate and implement change is a constraining factor to any technology infusion. An aging population coupled with lack of the right skills makes it extremely challenging for any project to be executed effectively and keep it running in a sustainable manner.
  • Decision-making – the process of decision making makes it extremely tedious for both the organization in question as well as the vendor to engage in a time-bound manner. Tier 1 vendors tend to lose interest due to their own revenue pressures.
  • Right Partners – Cost being a major criteria, it tends to exclude the Tier 1 service providers from the bidding process. This has a ripple effect on the quality of the partner, quality of solution and makes it even more difficult to build credibility for technology as an option the next time around.
  • Appropriate Technology – the broad geographical reach of India makes it difficult to deploy the latest bandwidth hungry technologies to remote locations. Coupled with local language support, tech literacy and poor infrastructure, it is not easy to deploy best of breed solutions into PSU clients. Most solutions have to be architected for that environment and needs a certain amount of customization which dilutes the effectiveness of the solution.
  • Security – these are more stringent for PSUs and adherence is mostly mandatory. The lack of standards around cloud, big data and other newer technologies makes it difficult for PSUs to adopt them esp. since cyber breaches are a known business risk across all enterprises
  • Change Management – even with the best of intentions, it is extremely difficult for private sector organisations to adopt to technology easily – the older the company, the more set in their ways – the more difficult the change process. Extending this logic, you can easily ima.gine how painful it must be for technology assimilation to occur in the public sector.

These are by no means exhaustive but merely indicative issues that PSUs come across while embarking on a technology roadmap implementation. Happy to receive your comments and insights.

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