I represent the Information Technology Association of Canada. Our association represents businesses in all the information and communications technology sectors. That includes EDP equipment, computers, printers, servers, telecommunications and consulting services. That gives you an idea of our fields of action.
Essentially, all large businesses operating in this sector in the country, whether they're established in Canada or are foreign businesses, belong to our association and are often represented on our board of directors. However, 70% of our members are smaller businesses, and even the large businesses are very interested in supporting the development of those businesses because the important thing is the development of our sector in general in Canada.
Questions of procurement are very high on our list of priorities. They are among the three top issues we discuss regularly at our board. Government procurement is extremely important to our industry, not only in terms of the dollars spent but in terms of what they represent in helping our sector, which is a world-leading sector for Canada. In staying a world leader, our enterprises large and small will sell software solutions and services that enable the creation of centres of excellence that then sell their services world-wide. The federal government as a client represents probably 4% to 5% of the total business of our industry, which is very large in proportion, but that 4% to 5% has a much more significant impact because of the role of the government as a complex enterprise, buying world-leading solutions.
Our association and our industry support procurement reform. We support the objectives that have been laid out for a 10% reduction in the cost of goods and services being procured, a 10% reduction in the cost of the procurement process, and a 50% reduction in the time cycle for procurement. As an association, and we've said it publicly, we feel it incumbent on us as taxpayers and businesses to support the government spending its money wisely and saving money. At the same time, we do a lot of work on procurement issues. For many years we've had committees that meet regularly with government representatives and among themselves. We have commodity councils of our own that work on these issues. We feel it's extremely important to recognize what is appropriate procurement behaviour. The government, being a better and smarter buyer, we believe creates a win-win situation in which the government gets better outcomes and our industry sells world-class competitive solutions.
In the last couple of years we have begun to stray from the objectives that have been recognized on both sides as to what is needed to pursue in government procurement, and that is to buy value and to buy outcomes. We have strayed from that into focusing too much on the components of a total package, service, or project that the government buys, and that is causing awkward pressures on the procurement process. It is causing us to stray from the solution that is best for the government and for us as taxpayers and for us an industry. For example, when we buy a piece of equipment we wind up focusing way too much on say the 15% of the cost of buying a box, a desktop, rather than the 85% of the total life-cycle cost of the equipment.
On a project, we wind up focusing way too much on the hourly rate or the daily rate of people being hired piecemeal, rather than on the total cost of the project, and much less still on the much greater amount at stake in what's going to be saved or improved in government processes as a result of the project.
This year there was an additional degree of friction that was caused by some changes to the process that appeared to us to be coming out of the blue compared to the process we already had in place to discuss and make progress on procurement reform with the government. It caused a lot of doubt, uncertainty, and friction throughout the industry; and when we sat down with other associations, others shared the same view.
At this point, the minister has done the right thing by stopping some of the things that were causing the controversy and by launching a consultation process. We are in consultation mode. We've participated in the processes that are being led by the Conference Board, and we're looking forward to getting back on track to appropriate procurement reform that will focus on the Canadian government getting the best outcomes and our industry participating with a world-class buyer.
Thank you.