CHANGING PURCHASERS' ATTITUDES: THE KEX TO SOFTWAREENGINEERING MARKETING

Frank Bott

A persistent feature of the market for bespoke software has been that many potential customers are ill: they may
not be familiar with the types of services the industry can offer nor With the companies offering them; they may
not understand the importance of the software elements of a system; they may not realise what their
responsibilities in an extemal procurement will be; they may not understand what differentiates good quality
software from bad, and they may have a better idea of how much money they want to spend than of what they
want the software to do. Even where the end users are well informed, inflexible and inappropriateprocurement
procedures and contfactualregimes may still prevent them from getting the right product at the right price.

The ddbacle of the London Ambulance System is only the best documented and one of the more recent of a
seemingly endless series of software disasters. As the consultant's report' shows, however, the manner in
which the pmrement was conducted and the attitudes of the London Ambulance Authority lend a certain
inevitability to the tale: it would appear not that the Authority deliberately failed to follow good procurement
practice but that it understand neither the importance of the procurement process nor the extent to which a
procurement process intended for purchasii tangible umsumables was unsuitable for purchasing a command
and control system. The following are a number of less well-known examples of bad procurement practice:

A public body has tendering procedures that award a umtract to the lowest compliant bid. Tender lists are
mainbind by category, e.g., plumbing firms, electrical contractors, softwslre contract~rs. Software
amtractors are normally used on a contract hire basis to assist the DP department during peak periods of
development. A decision was made to commission a complex software system, at a fixed price, in a field
very far removed from conventional DP. A major software house heard about the system and succeeded in
getting its name added to the tender list but its bid was unsuccessful because it was more than ten times the
lowest bid. The system never worked and the lowest bidder, to whom the contract was awarded, went into
liquidation.

A group of universities came together to commission an integratedinfomtion system that they all intended
to use. A requirements specification for the system was produced and tenders for implementing the system,
expected to cost several million pounds, were invited from a number of suppliers of database management
systems and fourth generation languages. Suggestions that the tender list should include some firms
specialising in bespoke software development were rejected on the grounds that they would not have the
necessary expertise in the use of the underlying DBMS or 4GL and that the risk would be greater because
they were so much smaller than the major DBMS and 4GL suppliers. Svggestions that the ad" tion
of the contract should be placed in the hands of someone with experience of managing this type of contract
were dismissed as impugning the competence of the group of senior administrators who were intending to
run it. Most of the value of the contract has been paid over but there is no working system, two years after
the original contract completion date.

A district health authorily acquired a patient administration system for its general hospital. Neither the
contract nor the agreed specification contained any mention af performance. As first delivered, the system
could handle less than 5% of the transactions. Only after eighteen months and a lot of unplanned

Report of the Inquiry into the London Ambulance Service. February, 1993. Available from Communications
Directorate, South West Thames Regional Health Authority, 40 Eastbourne Terrace, London W2 3QR
Frank Bott is with the University of Wales, Aberystwyth
 expenditure, did the system become operationally U 1. (To its shame, the supplier persuaded the
purchaser that it was unnecessary to include any performance guarantees in the specification.)

(If this paper appears unduly critical of public prc"ent, this is simply because public sector failures are
much better documented and, typically, more expensive than those of the private sector;there is no reason to
believe they are more numerous or more heinous.)

All of the above examples are primarily failures of the procurement process, even though failures in other areas
may have exacerbated the difficulties. The key dements of a successfuf procurement are:
a feasible and detailed requirements specification, or agrement on a realistic process for creating one, and
appropriate change control procedures;
a tender list that only contains companies that are competent to carry out the work fficient
resources;
a commitment by the purchaser to devote a d e resources to managing his side of the contract;
a formal contract that accurately reflects the intentions of bpth parties, that is properly understood by them
and that addresses all relevant issues, including change control.
On the procurer's side, the purchasing function might be expected to have the responsibility of ensuring that
these elements are in place; on the supplier's side it will conmonly be the sales and marketing function. .

A good purchasing department, even if it has never purchased bespoke software before, will be a
software has special characteristics and that bespoke procurements of anythrng need to be bandled in a
totally different from that used for off-the-shelf'products. Given this awareness, such a department will
difficulty in finding informed advice. The STARTS P u r c ~ r sHandbookz,
' although perhaps a littl
date, covers the procurement process very thoroughly; there are n m m m books on computer contracts
cover contracts for bespoke software3; the Institute of Purchasing and Supply provides 1 contract for the
acquisition of bespoke software; the Computer Software and Services Association issues guidelines; and there
are many experienced consultants available to advise on, or even manage, the whole process.

If the purchasers of bespoke software have too often failed to use appropriate procurement practices, it cannot
be said that the sales and marketing staff of the bespoke software suppliers have encouraged them to do so. For
obvious reasons, they are keen to get a signed contract as quickly as possible, preferably on a single tender
basis. If competitive tendering is inevitable, they may try to innuence the way it is organised but this is usual1
done too late and so smacks of special pleading.

The challenge for the marketing department is to educate its p&n.td customers. Key elements
marketing mix are likely to be some or all of the following:
0 presentations at conferences;
placing of article professionaljoumaIs;
0 reports of the company's activities published in the technicai press and, in some cases, the quality
national press;
0 publication of a regular newsletter to be sent to potential customers; .
establishing long-term re1 hips with potentid customers, even though there may be no prospect of
a sale for several years.
All of these provide plenty of opportunity to get across the message about procurem
material needs to be given as much prominence as articles about suceessfirl and inn
is one serious difficulty. Much of this material will only reach the informed potential customer - the customer
who attends conferences, reads the technical press or the professional journals.

2Department of Trade and Industry. The STAR15Purchasers' Handbook. National Computing Centre. Manchester,
1988.
3For example, Richard Morgan and Graham Steadman. Computer Contracts (3rd edition). Longman, 1987.

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 Reaching the uninfomed potential customer may be very difficult. Firms that seek their clients within restricted
industry sectors are able to exploit the speclalist journals, conferences and exhibitions for those sectors;they
can also work through the specialist trade associations and hope to have their reputation spread by word of
mouth within the industry sector. If, however, the firm’s target market is a general one or if the firm specialises
in a specific technology that is generally applicable (e.g. expert systems), then there are no suitable
communication channels fbr reaching uninformed pmspectwe customers; in such cases the finn acquires new
clients by serendipity rather than in any planned way. This problem has been at the root of many difficulties
experiencedby UK software firms. There are lessons here both for the organisation of the marketing department
and for product planning. In particular, there are very strong reasons for organising marketing by industry
sector even though production and supply may be organised differently.

Various industry associations and proksional institutions play an important part in the process of educating
and informing customers. Ada Language UK Ltd and the Ada Joint Program Office in the USA both undertake
a range of activities aimed at promoting the use of Ada, to the benefit of suppliers of Ada-related products and
Ada expertke; the Compukr Software and Services Association publishes guidelines covering many topics; it
also provides a service for putting prospective customers in touch with companies that may be able to meet their
needs. In adclition, in the UK,the Department of Industry has supported various programmes, notably the
STARTS initiative already mentioned, intended in part to educate the software industry’s customers. All such
activities, however, are more successful in serving informed customers than in reaching out to the M o r m e d .

Thm are particular problems associated with safety-criid embedded software. The manufacturers of the
Therac 254 were clearly ignorant of the importance of the software in such a machine. Such ignorance is now
much rarer but there are still plenty of fim producing safetycritical devices with embedded software that are
unaware of the risks that software in such systems presents and, hence, of the ways of controlling and
mitigating it. Indeed,I am aware of a company that manthtures automotive components containing embedded
s o h and is certified to IS0 9001 and that has no quality procedures of any sort for developing software;
what is perhaps more worrying is that the certification panel, consisting entirely of mechanical engineers, did
not even visit the software development department. In general, however,regulatoq and certification agencies
are now much more aware of the importance of software quality, witness the quality requirements now being
imposed on production control software in the phamawtical industry. Association with, or participation in,
such bodies is & d o = an important element of the marketing mix.

Our conclusions are that the difficulties of mark- bespoke software to uninformed customers are great
enough to justify suppliers structuring both their Services and their marketing by industry sector, even perhaps
to the extent of withdrawing from parts of the market in order to be able to focus marketing effort more
effectively. Furthemnore, participation in trade associations and professional activities, and support for
regulatory and s t a n a o n authorities, should all be seen as important elements of the marketing mix.

~~ ~

4Nancy G Levison and Clark S Turner. ‘An Investigation of the Them 25 Accidents’. IEEE Computer. July, 1993,
pp18 to 41.
0 1996 The Institutionof Electrical Engineers.
Printed and publishedby the IEE, Savoy Place, London WCPA OBL, UK.
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