"If I had a big contract, I would break it up to small suppliers and bring management control in-house," Tapia said, adding he would get better service and value. "Companies can save 50 percent because an hourly rate [of a tier-1] can be A$200 (US$149) or more. Even if it is 40 percent less, you will save a lot."

When asked about the prospect of introducing complexity by having more than one IT supplier throughout the organization, Tapia said the reverse is true. "[Ultimately] it may even reduce complexity, because most tier-1s are arrogant, difficult to deal with, and much more demanding," he said.

PicNet is a 16-person firm with clients such as the Commonwealth Bank.

Tapia believes it is particularly difficult for smaller firms to win government contracts because of a "flawed" tendering process.

"It's very difficult for companies like us to compete in government, because the size of tenders are so enormous only the big companies can afford to have people working on them," he said.