When a government's digital efforts fail, everyone loses. Citizens get stuck with frustrating websites and apps and public servants can't do their jobs efficiently. Even though governments are making significant investments and genuine efforts to modernise their services, there are sadly ample examples where it didn’t turn out as expected. 

Furthermore, because of the digital services and products we have come to expect in our daily lives, the bar has been raised for the product we use from our government. When these don't match the quality, it affects public trust and slows the journey toward digital transformation for everyone.

Providing these seamless digital services and products is indeed a core competency of public service; however, building these services and products is not necessarily a part of that competence. Despite significant resources, the public sector continues to struggle with delivering high-quality digital products. These projects often run over budget, fail to meet expectations, or simply fail. Why is this happening?

What’s puzzling is that the challenges our government faces aren’t unique—digital product companies right here in Belgium have mastered the recipe for success over the past decade. You create a team of cross-functional experts that come together around a shared mission. You focus on fostering a safe space where each team member can contribute to their full potential. Finally, you establish a crystal-clear product vision expressed in a number of actionable and measurable product outcomes.

While this may be an oversimplification, these core ingredients result in a focused team that can adapt to the inherent complexities of digital product development. In fact, we’ve documented these principles in detail in The ITP Way, a guide based on years of experience helping teams succeed in delivering complex digital products.

But if the recipe for success is known, why do we still hear about large digital endeavours that go over budget and over time? A critical blocker is the procurement process for public tenders when starting these projects. As we see it, there are three fundamental flaws in the process:

1. A lot of the assignments are formulated as individual missions

A lot of projects are structured as individual assignments, where suppliers provide individual profiles instead of cohesive teams. Building digital products is inherently a team effort, and assembling individuals from different suppliers often leads to misalignment and inefficiency. Delivering value effectively requires integrated teams with a proven track record of collaboration. We need teams of missionaries, not teams of mercenaries, as Mart Cagan would say. This also implies that price should not be a deciding factor, after all, a cheap contract that fails to deliver or leads to skyrocketing costs benefits no one.

2. The contracts have either no commitments, or too many

Current contracts either focus on hours without commitment to outcomes or rely on fixed scope/fixed-fee models. Both extremes are problematic. Hourly contracts place no obligation on suppliers to deliver results, while fixed-scope agreements limit flexibility, making it impossible for teams to adapt to inevitable changes during development. A better approach would be outcome-based contracts that balance accountability with flexibility, ensuring measurable progress without locking teams into rigid, outdated plans.

3. The current approach is tailored to larger companies

The current tendering process for public sector projects is dauntingly complex, imposing a substantial administrative burden on all parties involved. Successfully navigating this process almost requires specialised expertise—a cost that smaller companies might struggle to afford, effectively excluding them from the competition. In response, framework agreements offer a potential solution by streamlining administrative efforts upfront, allowing governmental agencies to tap into private sector expertise more efficiently. Yet, the sheer scale of these agreements often places them out of reach for SMEs, once again sidelining smaller innovators. Moreover, the criteria for assignments tend to be very specific, emphasising particular previous experiences, specific tech stacks, and set years-on-the-job requirements. This creates an environment where fewer opportunities arise for fresh entrants to demonstrate their capabilities. 

By embracing a more flexible approach to evaluating expertise, public sector projects can benefit from a broader range of qualified contributors, fostering vibrant competition and innovation.

Together, these barriers limit diversity, hinder innovation, and restrict the growth of smaller companies within the public sector ecosystem.

So, what can we do?

It’s time to rethink the procurement processes so that they’re based on measurable outcomes rather than rigid scopes or hourly work. This will enable teams to navigate the complexities of digital product development. 

Additionally, the process should be simplified to facilitate the launch of smaller assignments, making it easier for innovative solutions to be explored and implemented. 

Finally, by shifting focus towards comprehensive assessments of expertise, potential impact, and innovative solutions, public sector projects can ensure that they select partners capable of delivering meaningful and sustainable outcomes.

By adopting these changes, not only can we improve the procurement practices, but it also opens the door for more SMEs to compete for these tenders. This shift will enable the government to tap into local innovation, strengthen the economy, and ultimately provide the seamless digital services that citizens deserve.