The SLED Market The Good, The Bad and the Ugly A Lesson in

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The SLED Market

A Lesson in Process, Patience, Persistence

Paul J Karch

Chief Executive Officer

Gardant Global Inc.

paul.karch@gardantglobal.com

+1-866-855-3788

1

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

2

Your Processes…

Are you disciplined?

3

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)

The Process of

Government

4

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

5

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 personal income tax revenues declined.

6

The Sessions

State 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

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

TX Strategic Sourcing Initiative Saves More Than $134M

The 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)

Category

Road Aggregate

Food

Fleet

Energy

Management

Office Equipment

Mail Services

Traffic Control

Devices

Travel Services

Charge Cards

Merchant Card

Services

Mail Equipment*

Office Supplies*

Grand Totals

Verified as of (Date)

4/30/2014

4/30/2014

4/30/2014

Analyzed Spent

($Millions)

$1,086.82

$424.10

$281.48

4/30/2014 $56.12

8/31/2013

4/30/2014

4/30/2014

$46.05

$54.08

$49.34

4/30/2014

4/30/2014

4/30/2014

$2.85

$20.47

$1.98

4/30/2014

4/30/2014

$18.85

$29.63

$2,071.77

Realized Savings

($Millions)

$68.98

$16.06

$4.38

$14.67

$10.59

$21.49

$8.11

$0.59

$8.89

$0.70

$3.54

$5.54

$163.54

Realized Savings (%)

6.0%

Change Since

8/31/2013

$9.08

3.6%

1.5%

$9.23

($1.36)

20.7% $6.56

18.7%

28.4%

14.1%

$0.00

$0.53

$1.94

17.2%

30.3%

26.1%

$0.04

$2.14

$0.15

15.8%

15.8%

7.3%

$0.27

$0.58

$29.16

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

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

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 Privacy f) g) h) i) b) c) d) e)

Cloud Services

Legacy Applications

Business Continuity

IT Workforce

Virtualization

Data Management

Mobility

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) b) c) d) e)

Operational efficiencies (time, cost, productivity, reduced error rate)

Citizen/customer satisfaction (service delivery quality, cycle time, cost, mobility, accessibility)

Security improvements

Foundation for future operational improvements (including legacy system modernization)

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

18

The Role of Government and the Millennial

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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 parties

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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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Conclusions

The Offerings

Health IT

Mobility

Cyber Security

Cloud

Big Data

Collected by Local Governments, State and Federal

Analytics

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Focus

Location

Millennials

Process

Patience

Conclusions

The Strategy

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Thank You!

Paul J Karch paul.karch@gardantglobal.com

1-866-855-3788

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