Power of three

Power of three

A group of buyers went to market as a consortium to achieve cost efficiencies for a system with greater specifications.

During a meeting in Wellington for industry training organisations (ITOs), Ian Hogg and Ashley Perera from Forestry Industry Training discussed their common concerns about their Microsoft Access database system. “We were dissatisfied with the system and wanted to move onto a SQL-based system,” says Hogg, financial controller of the Electro-Technology Industry Training Organisation (ETITO).

Hogg, who was in charge of finance and IT, says the old system was “too one-dimensional”, and could not communicate with the organisation’s contact tracking software, Maximiser Tracker. “Cracks were starting to form in our process and we were concerned we wouldn’t be able to keep up with the growth patterns we were experiencing.” Since 1998, enrolment in ETITO’s training programs has grown by 25 per cent each year.

Hogg says he and Perera discussed the idea of migrating to a new system but cost was a major concern. “We started looking in the market initially. Some of the solutions were going to be very, very expensive. We are government funded, so we were trying to get the biggest bang for the buck.”

After the meeting, Hogg says representatives from three other ITOs joined them and discussed the possibility of forming a “consortium” and developing a strategy to enable them to move to a system that would be cost effective but provide more specifications. “Our core business is the same,” he explains, “so we can build a core system and share the cost, and then customise to our needs.”

In the end, however, only three ITOs formed the consortium – ETITO, Forestry Industry Training and COMPETNZ (New Zealand’s engineering and food industry training organisation). He says one organisation went on to develop its own system, while the other one dropped out of the group prior to the request for proposal (RFP).


After evaluating the proposals, the three chose the customer relationship management software of Pivotal, whose products cater to small and medium organisations. The three groups worked with Pivotal consulting company Savio Solutions for about a year to build the core system from the “out of the box” software.

But prior to finalising the contract, the three ITOs visited a Pivotal client site Employers and Manufacturers Association on Khyber Pass, Auckland that was then developing its system using the same software. “It sort of confirmed what we were thinking anyway about the whole flexibility of the system and to just customise what we wanted to do,” says Hogg.

The three organisations went “live” with their systems one after another in a two-month period. For ETITO, one of the benefits is cutting down the time needed to prepare a report containing critical data, from the previous four hours, to 10 minutes. The progress of over 6000 trainees is automatically tracked from enrolment through printing of certificates, a task that was partially manual under the previous system. The field staff can also update the database from their laptops.

Hogg says the three organisations have lately been discussing “loosely” about the possibility of reviving the consortium for a CRM-related investment – e-business portals. “Whether we get together for that I am not sure yet but we have started talking.”

Asked what would have happened had they approached the vendors separately, Hogg says, “We would probably have had to settle for a lesser system, we would haven’t been able to afford the high spec system we have at the moment.”

He says organisations thinking of undertaking the same strategy should bear in mind it worked in their case because they were from the same business. “There has to be synergy with what you are doing obviously, because you are building the same core system. You’ve got to be in the same industry. You’ve got to have your subject matter experts sorted out.”

Another important factor to consider is time. “You can’t make snap decisions because you have to go around the consortium. Always plan for double the time.”

The upside? Apart from splitting the development cost among members, one can get ideas from the other organisations. “You start bouncing ideas off each other. ‘So that’s how you do that. That’s good.’ It is a learning process.”

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