Apart from the unprecedented focus on technology and innovation development, the latest Policy Address announced last month also demonstrates Chief Executives Carrie Lam’s commitment to transform the government’s technology practice. Policies that include a new procurement arrangement and CE-led Steering Committee on Innovation and Technology are considered by industry veterans and former civil servants as a digital transformation within the Hong Kong SAR Government.
“The overall direction is positive and encouraging, but it also raises a lot of question marks, particularly around the implementation,” Raymond Wong, the former assistant director (information systems) of the Hong Kong Immigration Department said.
“With Carrie’s personal commitment in technology development and close collaboration between her executive council members, I am confident with the upcoming development in technology,” said Fanny Law, chairman of the board of directors at the Hong Kong Science and Technology Park (HKSTP). “Of course, the results remain to be revealed upon the deployment of these policies.”
New procurement arrangement enhances tech capabilities
One of the most significant announcements related to the enterprise IT market is the government’s new technology procurement arrangement. After years of complain from local IT professionals, the latest policy address stated to “explore the inclusion of innovation and technology as a tender requirement and will not award contract only by reference to the lowest bid.”
“This is a vital change for both the government and local IT industry,” said Wong, who led the city’s smart ID and e-Channel initiatives in the early 2000s. He said the government’s technology procurement policy has dragged and blocked the city’s technology innovation.
“It was a very bad decision [to award contract based on price],” he said. “When price dominates the tender reviewing criteria, bidders were encouraged to propose the worst technology solution to the government.”
Not only were the government departments presented with the lowest technology capabilities to implement their IT projects, the technology vendors were also forced to squeeze their profit margin simply to win the government contracts, creating a formula for failure.
Wong noted that during the smart ID project more than a decade ago, the tender reviewing criteria proportion between technology solutions and price was 6:4. “It was a bitter experience for me to fight for a higher proportion in technology capabilities,” he said. “But such proportion has gone worse since then.”
According to Ted Suen, president of Hong Kong Computer Society (HKCS) and head of IT at MTR Corporation, the current proportion between technology solutions and price is 3:7.
“The proportion between technology capabilities and price should be updated to 1:1,” suggestedSuen, who previously held executive positions in IT outsourcing services providers.
“It has been a problem for awarding contract based on the lowest bid,” he said. “Bidders had been compensating technology capabilities to reach the lowest price, in order to win any government contracts.”
While it is encouraging to see that the government realizes the need to change, Suen noted that details are yet to be available about the new arrangement.
Subject to WTO GPA
In addition to enhancing the technology capabilities in government IT projects, the proposed procurement arrangement also aims to “encourage local technological innovation.”
But Wong questioned the implementation details, as the HKSAR Government is subject to the WTO’s Agreement on Government Procurement (GPA). This means the government procurement process should be open, fair and transparent to both local and international parties.
“How can the government encourage local technology innovation if it’s not able to give preference to technologies developed locally?” asked Wong. He added that international brands have been a preference for major IT projects, partly because of their proven technologies and the lack of track records from the local technology startups.
Law from HKSTP, also a former high-ranking civil servant, added that GPA applies only to government procurement of good and services that reach a substantial investment size.
“For projects that prefer to adopt local technologies or innovation, their deal size tends to be much smaller,” she said. “I believe it is possible to meet the WTO’s agreement as well as to offer preference to technologies developed locally.”
She added that GPA only applies to government departments and bureaux. But many non-government organizations, like HKSTP, are excluded from the agreement. “HKSTP are willing to consider and prioritize the locally developed technologies in our own development and procurement process,” she added.
Top-down approach transformation
Another major announcement within the government internal practice is the establishment of the Steer Committee on Innovation and Technology, personally chaired by Lam.
“This [committee] should help Hong Kong to catch up its smart city development,” said Suen from HKCS. “I hope the committee will bring more inter-departmental collaboration to speed up the development process.”
He noted that the government has done a lot of studies in this area and it is time to put the blueprint into practice.
“This [committee] is creating a top-down approach to drive the use of technology,” added Wong. “This is a good plan that’s much needed within the government.”
He said the use of technology within the government has always been through a bottom-up approach. But the lack of support from the senior level executives were creating bureaucratic challenges and discouraging inter-departmental collaboration.
He quoted an example from the smart ID project, when he proposed to include driver license information within the smart ID card. “But it was impossible to implement this idea because of the cross-departmental bureaucratic challenge,” said Wong.
Creating a new culture
Law agreed that the Steering Committee is expected to create a top-down approach and cultural change within the government.
“Digitization is not hype at all,” she said. “It is enhancing productivity and reducing workload in many organizations. Why aren’t we taking advantage of it?”
She explained one major reason that is holding back the local civil servants from exploring the latest technology is the increased workload. “They have so much work on their shoulders that there is no time to research and explore the new technologies,” she said.
With a plan to transfer Efficiency Unit (EU) within ITB and to restructure the Central Policy Unit (CPU), Law said more external parties can bring a new pair of eyes with refreshed insights, helping the government to identify opportunities for digitization.
“Now that there are a lot more support from EU, CPU, HKSTP, Cyberport and other co-working space operators, where they can collaborate to drive the use of technologies within the government,” she said. “But most importantly, with the government taking a lead to demonstrate its focus in innovation and technology, it is creating a brand new culture within the government, attracting more vendors and entrepreneurs to knock at our doors to share their latest innovation.”