NZRise, the lobby group for New Zealand owned ICT businesses, is setting out a new policy agenda for the government, including ending procurement panels and spending more with local developers.
In a post by Don Christie, the group says the changes are needed if the government is to achieve its stated aim for ICT to be the country's second-largest contributor to GDP by 2025.
Christie, the CEO of Wellington firm Catalyst IT and co-chair of NZRise, recommends government double the allocation of ICT spending with New Zealand owned digital technology companies, improve ICT project success rates and end current panel and shared services procurement arrangements.
"Government patronage is one of the most effective ways of stimulating the NZ owned digital technology (ICT) sector in allowing business to grow capability and product," he says. "Time and time again it has made New Zealand companies such as Orion Health, Datacom and Catalyst 'export ready'."
According to Christie, the New Zealand government needs to set ambitious targets for increasing the use of local capability and it needs to measure and publicly report on the direction of change over time.
"Unlike in other advanced digital nations, there is no coherent policy here on how to effectively use local capability and improve the access it has to government work," he adds.
"Indeed, there has been a long- standing assumption that government is somehow removed from the market and has no influence on market outcomes. In an economy the size of New Zealand, this is wrong and represents a missed opportunity."
High rates ICT project failure also need to be addressed, Christie adds.
"It is widely understood large, multi-year, multi-million dollar projects are fraught with issues and hold a high propensity for failure with many high profile failures written off by New Zealand government in recent years," he says.
According to NZRise, the New Zealand Auditor General has pointed out that successful IT projects are smaller, transparent, agile and open source.
"Smaller, transparent projects will lead to continued improvement in project success and provide increased opportunities for New Zealand owned companies to participate - as are usually locked out of the current larger model," he adds.
Panels and shared services must also go, he says.
"Panels are anti-competitive and mediate against innovation and change," he adds. "They reward hegemony, and the AoG (all-of-government) panels and shared framework agreements are confusing, unpopular and costly.
"Their claimed benefits are never actually reported and it is unclear whether they are ever measured."
The Auditor-General released a report into the all of government infrastructure-as-a-service panel (IaaS) in February, finding some organisations were not using the panel and were doing so without receiving a formal exemption.
Meanwhile, Christie says the Department of Internal Affairs' "ICT Marketplace" initiative holds "great potential" while "needing to be reviewed to ensure that it doesn't further remove New Zealand companies from government business".
"This initiative was greeted with concern by the NZ business community when DIA carried out its consultation "road shows" last year yet these concerns remain unanswered and changes to the approach (based on feedback and concerns raised) are not currently evident," he adds.