For VARs, What Happens In SLED Really Stays In SLED

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It's no secret that the American Recovery and Reinvestment Act will bolster overall IT spending for state and local government and education markets, creating even more opportunity for the public-sector-oriented solution providers that serve them.

But winning business in SLED accounts, a former Los Angeles and San Francisco CIO advised Wednesday, means not only being far out in front of key IT buying decisions, but also knowing that what you say to end users in SLED can and will be used against you.

With 94,731 state and local jurisdictions in the United States, sustained 7 percent to 8 percent growth in state and local government IT spending year-over-year, and $9.5 billion and $10.5 billion in spending projected for K-12 and higher education, respectively, the money is definitely there, confirmed Liza Lowery Massey, a Senior Fellow at the Center for Digital Government and a former CIO of two of California's largest cities.

Speaking at Tech Data's Tech EDG -- a conference for public-sector-focused Tech Data VARs in Arlington, Va. -- Lowery Massey agreed that IT procurement in the public sector, especially at the SLED level, was a "convoluted" and "protracted" process. She said solution providers must first identify the key decision makers at state, city, county, regional and education levels, and realize that they all have different pain points and agendas, "from animal control to zoning."

"You have to know who to talk to," she said. "Usually, for example, there's a threshold for procurement. If it's up to a certain dollar amount, certain departments do their own procurement, and if it's over [that amount], there's a centralized process. I've seen that threshold as high as six figures, and as low as $5,000. Not all CIOs and org charts are the same."

An important thing to understand, she argued, was just how close-knit the public-sector IT community is despite its ostensible size -- and that chatter within that community can make and break reputations like in no other vertical market.

"Peers in government share everything," she said. "They don't compete, and they talk to each other all the time. The government by design is also very risk-averse. They want to know who else, especially among their peers, is doing it. Ultimately, they will want to follow the path of least resistance."

Various groups such as the National Association of State CIOs (NASCIO) have listservs, Lowery Massey said, where public-sector IT end users are often quite vocal about both triumphs and difficulties they've had with vendors and solution providers.

"It's always amazing to me to see a vendor shoot itself in the foot in one jurisdiction and then think [the word] isn't going to get out," she said. "All of that stuff does impact procurement and sales. These guys have private listservs because they don't want vendors on them."

Next, Lowery Massey said, many solution providers she'd encountered in the past didn't quite understand the rigors of the state budget cycle, which for all but four states runs from July 1 to June 30. It's in a window of about two months, from July to the end of September, when a lot of states do their IT buying for the year -- and see any leftover budget yanked if they don't spend it quickly enough.

IT buyers for public-sector organizations are often frustrated, she added, by how fast technology changes. Therefore, establishing a relationship with key decision makers early on and learning to help them throughout the cycle establishes trust in VARs -- and credibility.

"Don't sell them just what you have right now. Figure out what you can offer them when they'll be able to write you a check," Lowery Massey said. "Early engagement is so critical in SLED. That's what sets you apart."

In a ChannelWeb interview following her presentation, Lowery Massey said that even though she is now several years removed from being a CIO, the vendor contacts with which she still keeps in touch are the ones that took time to establish those crucial relationships.

"Plant the seed," she urged. "And make yourself easy to find when the time comes."

Next: Don't Go Deaf From Stimulus Buzz

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