The SLED Market A Lesson in Process, Patience, Persistence Paul J Karch Chief Executive Officer Gardant Global Inc. [email protected] +1-866-855-3788.

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The SLED MarketA Lesson in Process, Patience, Persistence

Paul J KarchChief Executive Officer Gardant Global [email protected]+1-866-855-3788 1

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Government/SLED Selling is a Process

• PROCESS“a systematic series of actions directed to some end”

• Government / SLED Sales Success must be Process driven• What are the elements that you need to address?• The Process is critical to your company success

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Your Processes… Are you disciplined?

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The Process of Government

• The Process of Government• Funding• Sessions• Strategic Sourcing

• The Process of Industry• Registrations• New Solutions• A Presence in the Locale

• The Process of Solutions• Certifications• Repeatable Solutions• Cloud ( SAaS, PAaS, IAaS others)

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The Market

• More than $60 billion forecasted in 10,000+ state and local contract opportunities

• More than 1,000,000 state, local, and public education bid notifications

• More than $20 billion in annual spending across 14,700 individual term contracts.

• More than 300,000 verified state and local contacts

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The Declining Revenues in SLED

• Total state tax revenue declined in the first quarter of 2014 by 0.3 percent relative to a year ago, before adjustments for inflation and legislated changes (such as changes in tax rates).

• The individual income tax also showed a decline at 1.2 percent, while the sales tax and corporate income tax grew by 1.7 and 1.4 percent, respectively.

• The Plains region showed the largest declines at 5.4 percent, followed by the Far West region at 4 percent. The Mid-Atlantic and Great Lakes regions also showed declines in total state collections at 1.0 and 0.5 percent, respectively.

• The remaining regions showed growth in state collections, with Rocky Mountain states reporting the greatest growth at 6.4 percent.

Preliminary figures collected by the Rockefeller Institute for the April-June quarter of 2014 indicate that collections in personalincome tax revenues declined.

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The Sessions

7State Legislative Sessions October 2014

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Now is the time to lead not follow

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Why are the Sessions important

• Fulfillment will not last• Lead by Solution • Solutions are defined and budgeted when

Legislatures are out of Session• Solutions are funded during Session• Develop and design your offerings with the state

agencies• Target and Focus 9

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The Role of Strategic Sourcing

• Over 9000 state term contracts with over 12 million priced line items

• E-RATE is Strategic Sourcing• WSCA for all• PEPPM• MiCTA• GSA Schedule 70• Others

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Provider Types

• OEMS• Value Added Resellers• Certified by the State as a provider• Less unique vendors• Less potential to break in• Example

• Illinois has 55 unique qualified vendors• Florida has 536

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Strategic Sourcing

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Category Verified as of (Date) Analyzed Spent ($Millions)

Realized Savings ($Millions) Realized Savings (%) Change Since

8/31/2013

Road Aggregate 4/30/2014 $1,086.82 $68.98 6.0% $9.08

Food 4/30/2014 $424.10 $16.06 3.6% $9.23Fleet 4/30/2014 $281.48 $4.38 1.5% ($1.36)

Energy Management 4/30/2014 $56.12 $14.67 20.7% $6.56

Office Equipment 8/31/2013 $46.05 $10.59 18.7% $0.00

Mail Services 4/30/2014 $54.08 $21.49 28.4% $0.53

Traffic Control Devices 4/30/2014 $49.34 $8.11 14.1% $1.94

Travel Services 4/30/2014 $2.85 $0.59 17.2% $0.04

Charge Cards 4/30/2014 $20.47 $8.89 30.3% $2.14

Merchant Card Services 4/30/2014 $1.98 $0.70 26.1% $0.15

Mail Equipment* 4/30/2014 $18.85 $3.54 15.8% $0.27

Office Supplies* 4/30/2014 $29.63 $5.54 15.8% $0.58

Grand Totals $2,071.77 $163.54 7.3% $29.16

TX Strategic Sourcing Initiative Saves More Than $134MThe Comptroller’s Strategic Sourcing initiative has realized savings across more than a dozen state contracts. The savings have been found by analyzing commonly purchased goods and services and developing new contracts to secure better prices, as well as monitoring vendor performance to achieve long-term cost savings.

Strategic Sourcing Cost Savings/Cost Avoidance Analysis (Conservative Approach)

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Identify the Strategic Plan for the State of Texas 2015 -2019

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Instructions for Technology Resources Planning Section of the 2015–2019 Agency Strategic Plan

Planning for technology resources is a key component of the strategic planning process. Statewide and agency planning provides a roadmap for the implementation of enterprise and agency-specific technology solutions that will result in more efficient expenditure of limited resources and more effective delivery of services to Texas citizens and agency constituents.

TECHNOLOGY INITIATIVE ASSESSMENT AND ALIGNMENT

“Technology Initiative Assessment and Alignment” describes how technology will be deployed within the agency to address its organizational objectives. For the purpose of this section, a technology initiative is defined as a current or planned activity that will improve, expand, or significantly change the way information technology (hardware, software, services) is used to support one or more agency objectives. A technology initiative may correspond to one or more projects in the agency’s Information Technology Detail or Biennial Operating Plan, or it may not be specifically referenced as a project.

http://www.dir.texas.gov/management/strategy/Pages/ASPs-TechnologyResourcesPlanning.aspx#instructions

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Identify the Strategic Plan for the State of Texas 2015 -2019

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For each of the agency’s current or planned technology initiatives, provide the following information

1. Initiative Name: Name of the technology initiative.2. Initiative Description: Brief description of the technology initiative.3. Associated Project(s): Name and status of current or planned project(s), if any, that support the technology initiative and

that will be included in agency’s Information Technology Detail.4. Agency Objective(s): Identify the agency objective(s) that the technology initiative supports. 5. Statewide Technology Priority(ies): Identify the statewide technology priority or priorities the technology initiative aligns

with, if any.a) Security and Privacyb) Cloud Services c) Legacy Applications d) Business Continuity e) IT Workforce f) Virtualization g) Data Management h) Mobility i) Network

6. Anticipated Benefit(s): Identify the benefits to the agency, the state, and citizens/customers that are expected to be gained through the technology initiative. Types of benefits include:

a) Operational efficiencies (time, cost, productivity, reduced error rate) b) Citizen/customer satisfaction (service delivery quality, cycle time, cost, mobility, accessibility) c) Security improvements d) Foundation for future operational improvements (including legacy system modernization) e) Compliance (required by State/Federal laws or regulations)

7. Capabilities or Barriers: Describe current agency capabilities or barriers that may advance or impede the agency’s ability to successfully implement the technology initiative.

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The Ultimate Strategic Sourcing Vehicles… GSA

Source Deltek

• Under the Cooperative Purchasing Program, state and local government entities may purchase a variety of IT products, software, and services from contracts awarded under GSA Federal Supply Schedule 70, Information Technology, as well as from contracts under the Consolidated (formerly Corporate Contracts) Schedule containing IT special item numbers.

• Only a handful of states purchase directly off of Schedule 70; states can most often achieve competitive pricing through their own term contracts and avoid GSA’s industrial fee.

• Local governments, K-12, and higher education organizations are historically more receptive to GSA Schedule 70 for the administrative and time savings, and leveraged pricing.

• California, New Mexico and Texas negotiate contracts based on GSA Schedules. • Florida, the District of Columbia (open to all federal contracts), Georgia, New York City,

and Ohio governments all proactively leverage Schedule 70 contracts.

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GSA in SLED

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Patience in the Process is Critical

• Patience and Understanding is lost in today’s SLED Sales Environment

• Millennials, the Establishment and You!• Unreasonable Expectations

• Return on Investment• 12 – 18 month sales cycle

• Expectation of Company• Solution Direction• Demographic

• Expectation of Sales• The State and Local Agenda

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Millennials and the New Market

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The Role of Government and the Millennial

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Your

Mar

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Add Technology to your Organization

• Online Catalogs• Social Media• Look to Market using new methods• Participate in Bids – Work can be Painful• Develop a Standardized Proposal Baseline

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The Role of Industry, the SLED Market and the Millennial

• Patience• The SLED Market is not for the Millennial Sales Person

• Bridging the Gap between the Millennial and the Establishment• Long-term planning with Short term results

• No Immediate Return• Expectations must change especially for the new players• Realize that speed of business is the value proposition for

Government, the citizens and the Millennials• Strategic Sourcing and Cooperative agreements are a fast go to

market for all parties21

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Developing a Go To Market Strategy

• Going to Market is painful• Locations

• Are you in the State Capital?• Goals and Objectives

• Your Company• Your Offerings

• Can you bridge the Solution Gap or are you a leader in your space?• How creative is your technology team?

• Your Product Suppliers • Use your OEMs…They have to be included or• Develop your own specific spin on solutions

• The State• The Local Jurisdiction• The Municipality

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Opportunities in 2015 “The Horizontals”

• Security and Privacy• Cloud Services • Legacy Application migration • Business Continuity • IT Workforce • Virtualization • Data Management • Mobility • Network

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5 Upcoming Initiatives

• Oklahoma – IT Staffing Services – Q1 2015• 15 high level categories including services for

• Infrastructure• Data Processing• Computer Help Desk• Software Maintenance• Security Design• Other

• 60 current vendors

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5 Upcoming Initiatives

• Massachusetts Software – Q4 2014• 5 NE States can purchase off of this contract• Incumbents are

• DELL• En Pointe• SHI International

• $150M

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5 Upcoming Initiatives

• Georgia Multifunctional Devices – Q4 2014• Existing Contract expires May 2015• Mandatory use by State agencies• Incumbents are

• XEROX• SHARP• RICOH• CANON

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5 Upcoming Initiatives

• Virginia – Networking Equipment and Services – Q1 2015• Mandatory Contract for State agencies• Optional for others• Reseller contracts for

• Avaya• Brocade• CISCO• HP • Others

• Current Vendors include• Knowledge Information Systems• Electronic Systems Inc.• Eastern Data• DISYS Solutions• Davis Associates• DALY Computers• Carousel Industries• Avaya Inc.• Enterasys

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5 Upcoming Initiatives

• New York IT Services / Software / Hardware – Q4 2014, Q1 2015• Umbrella Contract Approach• Project Based IT Services based on size of company• Manufacturer Based Hardware and Software• Reseller Based Hardware and Software

• Very interesting approach and if successful may be endorsed by other states

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Other initiatives include

• Florida Term• Maryland CATS• State of Washington IT Professional

Services• Massachusetts IT Staffing• Delaware IT Equipment• WSCA Software VAR

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ConclusionsThe Offerings

• Health IT• Mobility• Cyber Security• Cloud• Big Data

• Collected by Local Governments, State and Federal• Analytics

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ConclusionsThe Strategy

• Focus• Location• Millennials• Process• Patience

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Thank You!

Paul J [email protected]

1-866-855-3788