January 2013

Advocating More Collaborative Business Models between Public and Private Sector

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Since the last few decades we are observing that governments across the world are under pressure, to become more citizen-friendly and service- conscious. Governments are trying to be more efficient and thereby more productive, delivering more services with larger outreach, without the need to increase taxes. The key governance processes are being revisited, in order to eliminate non-value adding processes and streamlining them, wherever possible. There is a palpable shift in the focus from supply-driven to demand- driven scenario, from processes and structures to output and outcome. Perhaps this paradigm shift to citizen-centricity has been possible because of manifold increase in the efficiency of private sector observed almost in every sector in the last 30 years or so. However, it appears that citizen seldom doubted the ability of the government to perform efficiently but believed that there is no intent on its part to do so. It is now assumed that market alignment and adoption of market-style strategies like private sector entity, would help the public sector organisation to become more agile and effective in delivering its primary duty of delivering public services.

Interestingly in this same period the world has seen almost parabolic emergence of Information and Communication Technologies, opening up myriad of opportunities for all activities conceivable by man-made institutions including governments. Consequently we are observing ICT emerging as a great enabling tool for enhancing the governance, especially to deliver the public services in a more reliable, accountable, transparent, cost-effective and responsive manner. But knowledge of ICT has not been a legacy virtue within the government system while this knowledge demands to be dynamic, always to be refreshed periodically. In management parlance government is a functional organisation while successful implementation and sustenance of ICT system as an effective tool inside the government demands it to be a projectised organisation. This requirement becomes more evident in cases of deployment and operation of ICT infrastructure which requires replacement once in every five to six years. All these required a new business model for effective implementation and deployment of ICT in government in functionally, operationally and financially sustainable manner.

Public-Private-Partnership (PPP) model for creating public assets and infrastructure has been in practice for some time in many countries which demonstrated many advantages over traditional ways of procurement of assets and infrastructure. PPP model became an immediate choice for ICT-related projects because of low lifecycle time of the assets to be created and also high rate of technology obsolescence. But it is not at all easy to absorb PPP within a government system. After practising a well-oiled legacy hierarchical machinery for a long time the meaning of last P is often not well understood within the government which is still bogged down with the idea of engaging a ‘contractor’ for getting services.

Nevertheless, in the ICT project arena, the PPP model has started its journey in India with a con- scious decision in the government that PPP will be garnered, wherever possible, in implementation of e-Governance projects. The face of government is thus changing slowly but in a definititive way, in creating ICT infrastructure, or taking the ICT- related services from private entities. The National e-Governance Plan (NeGP) scheme approved by Union Cabinet categorically mentioned that PPP will be adopted, wherever feasible. There are significant numbers of e-governance projects all over the country, whether flagship Mission Mode Projects under NeGP, or state-initiated projects in isolation, which are experimenting with variants of PPP model, build-own-operate-transfer, supply- operate-maintain, build-own-operate and so on.

It is imperative that the responsibility to transform the intent of making PPP successful into a reality lies with both public and private sector.
However, this is not happening with the desired pace. All concerned need to appreciate that, there is an ardent requirement for all stakeholders to change internal functioning pattern, to carry out businesses in the ICT era. On one hand, govern-ment should identify and bundle out nonsovereign tasks and activities for outsourcing them to generally more responsive and efficient private sector. The idea of PPP should be appreciated in letter and spirit and service level agreements should be drawn up pragmatically with deliver- able attributes which are only logically essential. In procurement of goods and services quality-cum- cost-based selection approach should prevail. Government must take advantage of liberated entrepreneurship mindset of the Indian private sector. On the other hand, private sector also has to make up for its so-called trust deficit with the government, to carry out healthy business with the largest stakeholder in the ecosystem. Profit- making cannot and should not be the only motto for the Industry. Price realism should take priority. Business models to work with the government should be more collaborative, taking cognisance of the changes churning inside the government.

The way the government and private sector decisions are influenced traditionally for decades, should change now. A new book of mind shar- ing between these two sectors should be written, based on collaborative knowledge sharing, bring- ing in exposure to best practices, preparing for hand-holding wherever necessary and getting in to win-win PPP models for all the stakeholders. In order to urgently accelerate the pedal of inclusive development, to unlock our scarce governmental resources to provide developmental opportunities to all sections of the society, it is essential to embark upon much more thoughtful collaboration between ‘we and they’!

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