I’m not against the ‘Big Four’ — they have things to offer. They just shouldn’t be offered everything.
Setting aside the egregious behaviours of a few, the bigger problem is their extraordinary exclusionary access and influence. It has created an oligopoly across the public sector, federal and state, of a few international companies that excludes broader competition, opportunity and growth.
The tide may have swung against them and dragged everyone down at the same time. Unless something substantive is done to curtail their access in the future, they will be the first to float to the top again.
Even with greater in-house capability in our public services, which will take years to achieve, they can’t and shouldn’t replace all professional services. That’s the same problem really: lack of new ideas, innovation and a stranglehold on the growth of a viable competitive industry. We need the pendulum to swing back to the centre, to find equilibrium.
We should not be buying surrogate resources as consultants, that’s wasteful. We should be accessing skills, experience and know-how readily available through specialist and boutique firms. Preferably Australian firms that can grow and take our unique Australian capabilities international.
Why can’t we foster the development of an Australian advisory industry? One that is competitive and capable, not just here but on the world stage.
It wouldn’t take much — just four policies that can be implemented across the public sector or even just in the forward-thinking departments. They would cost nothing, wouldn’t give Australian business a free kick, but would give them equal opportunity to compete.
We are not against big companies, there should be more of them, but they should be Australian.
There are some good ones out there, but not many. To grow big Australian companies, we need to foster small ones.
Just four changes would make a difference. All are achievable without a significant spend.
At the heart of the solution are these proposed policies, at no cost, which would encourage the rise of the Australian industry through the growth of SMEs:
- Publish all RFTs released through panels on a site similar to AusTender with clear evaluation criteria, and a procurement schedule. Provide SMEs with the opportunity to opt-in for a selectively sourced RFT and support them with a mechanism to engage with the RFT owner and sufficient time to respond. Publish all RFT awards, including the achievement, or otherwise, of the planned procurement schedule.
- Open the Defence panels to SMEs and stop the creation of an alternate big four through the MSPs. This needs an external and independent review, seeking industry input on how best to achieve both industry and Defence needs. There is low confidence in industry that Defence is thinking about anything other than themselves, informed by the usual suspects. Defence needs some unusual suspects to ensure alternative approaches and views are properly taken into account.
- Prohibit those who design solutions from delivering them. This is called above-the-line and below-the-line work. We need to be explicit, those who design the answer can’t implement it. It is a conflict! Let the companies choose where their best outcome lies, but they can’t have it both ways.
- Foster entrepreneurship by building whole-of-government panels that are open and continually refreshed. Form an industry-government working group to establish a whole-of-government professional services panel that meets the needs of both industry and the public sector. We see no reason for Defence to operate outside this process.
Consultants add value, but not if they are used as surrogate resources. It’s even less value if they are international companies.
We need to establish the conditions for a competitive Australian advisory industry so it can not only thrive but compete internationally.
If we make that model work everyone wins – except the foreign internationals.
You can read the full Building a Competitive Australian Advisory Industry document here.
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