The Minister for Finance and Deregulation, the Hon. Lindsay Tanner, has released the final report on Sir Peter Gershon’s Review of the Australian Government’s use of Information and Communication Technology (ICT). The Government is the largest procurer of ICT goods and services in Australia, spending around $5.3 billion across the General Government Sector in 2007-08. The Review evaluates ways the Government can maximise benefits from a whole-of-government approach.
Current use of ICT
The Review process involved gathering a substantial body of evidence to provide an accurate picture of how ICT is currently used and managed within the Australian Public Service. The findings show that currently, the lack of a whole-of-government approach to governance and investment, has led to significant fragmentation and duplication. This has occurred, for example, in technology such as telecommunications links and gateways as well as security and authorisation. There is little shared information between agencies about how and what they are procuring, which strongly limits coordinated purchasing.
Key Findings:
- There is weak governance of whole-of-government issues related to ICT.
- Agency governance mechanisms are weak in respect of their focus on ICT efficiency and understanding of organisational capability to commission, manage and realise benefits from ICT-enabled projects.
- The business as usual (BAU) ICT funding in agencies is not subject to sufficient challenge and scrutiny.
- There is a disconnect between the stated importance of ICT and actions in relation to ICT skills.
- There is no whole-of-government strategic plan for data centres. In the absence of such a plan, the Government will be forced into a series of ad hoc investments which will, in total, cost in the order of $1 billion more than a coordinated approach over a 15 year period.
- The government ICT marketplace is neither efficient nor effective.
- There is a significant disconnect between the Government’s overall sustainability agenda and its ability to understand and manage energy costs and the carbon footprint of its ICT estate.
Conclusion
“The current model of weak governance of ICT at a whole-of-government level and very high levels of agency autonomy, characterised by an ability to self-approve opt-ins to existing whole-of-government ICT arrangements, leads to sub-optimal outcomes in the context of prevailing external trends, financial returns, and the aims and objectives of this Government.”
Recommendations
The recommendations outlined in the Review involve a ‘major program of both administrative reform of, and cultural change from, a status quo where agency autonomy is a longstanding characteristic of the Australian Public Service’.
Key recommendations:
Strengthen pan-government Governance
- Creating a Ministerial Committee on ICT that meets three times per year to be responsible for ICT policies, overall strategic vision, whole-of-government ICT and the approval of opt-outs.
- Establish a Secretaries’ ICT Governance Board (SIGB) as a committee representative of central bodies, portfolio departments, delivery agencies and select executives from private sector companies that are successful users of ICT. The SIGB will replace the existing Secretaries’ Committee on ICT (SCICT), and will be given a strong mandate from the Government to drive the Ministerial agenda.
- Allow agencies to obtain opt-outs, based on genuine business need, from agreed whole-of-government activities subject to the approval of the Ministerial Committee, which will be informed by the SIGB.
- Redefine the role of the Australian Government Information Management Office (AGIMO) (see appendix J of the report).
Strengthen agency governance
- Improve agency capability by implementing a common methodology for assessing agency capability based on self-assessment and periodic independent audit.
- Strengthen the link between policy formulation and implementation by including agency capability as one of the factors considered in the two-pass investment approval process.
Tighten the management of ICT Business as Usual (BAU) funding
- Target to move total Financial Management Act Act agency ICT spend from an average 77:23% split between ICT BAU activities and creation of new capability to an average of 70:30: in 2011-12.
- Reduce the ICT BAU budgets of the largest 28 FMA Act agencies (excluding Defence) with ICT expenditure in excess of $20 million per annum by 15% from 2007-08 actuals, with a phased introduction over two years. Such agencies include:
- Australian Federal Police
- Australian Taxation Office
- Centrelink
- Comsuper
- Department of Education, Employment and Workplace Relations
- Reduce the ICT BAU budgets of those FMA Act agencies with annual expenditure between $2 million and $20 million by 7.5% from 2007-08 actuals. Such agencies include:
- Department of the Prime Minister and Cabinet
- Department of the Senate
- Federal Court of Australia
- Department of Broadband, Communications and the Digital Economy
- Therapeutic Goods Administration
- Create ICT Review Teams to help these agencies achieve the target reductions without impairing service delivery. The 15% and $7.5% reductions in total should save the Government around $140 million in the first year and in excess of $400 million in the second and subsequent years.
- Develop common metrics and conduct benchmarking to improve the practice and rigour in monitoring the effectiveness of ICT investments.
Enhance the management of the APS ICT skills base
- Create a whole-of-government Australian Public Service ICT career structure, including training and development programs for ICT professionals in key skills areas.
- Develop and maintain a whole-of-government strategic work plan.
- Reduce the total number of ICT contractors in use across FMA Act agencies by 50% over a 2 year period and increase the number of APS ICT staff. This should save the government an estimated $100 million.
Data Centres
- Develop a whole-of-government approach for future data centre requirements over the next 10-15 years.
Improve the efficiency and effectiveness of the ICT marketplace
- Make better use of the Government’s collective buying power by optimising the number of ICT panel arrangements established by agencies across government, including the introduction of whole-of-government panel arrangements for ICT commodity-based procurements where true economies of scale are achievable.
- Panels should be whole-of-government where appropriate, but may be portfolio-based where they will deliver superior value. Larger agencies can use these panels, but if they get better prices through other procurement channels, then that price should be leveraged as the whole-of-government price.
- Improving procurement arrangements for ICT commodity products and services and volume sourcing arrangements for key items of software, including the use of aggregated arrangements and e-auctions, where appropriate.
- Implementing the strategic management of key ICT suppliers by employing greater intelligence gathering on industry health to inform proactive government stances for dealing with increases in the dominance of large suppliers, bankruptcies, mergers and acquisitions, etc.
- Working with industry to develop client and supplier codes of conduct with agreed escalations for non-compliance.
- Determine if the Government’s current policy on IP is a significant barrier to entry and a cost driver.
- Instigate a review by the Department of Foreign Affairs and Trade to establish whether the Australian Government is getting a net benefit from the $80,000 open tender threshold under the Australia-US Free Trade Agreement.
Sustainability of ICT
- Develop a whole of government ICT sustainability plan (in conjunction with the Department of the Environment, Water, Heritage and the Arts) to manage the energy costs and carbon footprint of the Government’s ICT activities.
- Large agencies should develop an ICT energy efficiency plan and undertake period independent energy assessments.
Candidates for consideration of whole-of-government approaches, subject to opt-out include:
- Australian Government Architecture
- Australian Government Interoperability Framework
- Business Portal
- Career structure for ICT staff
- Citizen Portal
- Client code of conduct
- Common business process
- Common email system
- Common high security network
- Common low security network
- Common methodology for assessing organisational capability
- Common project management tools for different sizes of projects
- Criteria for assessing requested opt-outs
- Criteria for the identification, operation and sustaining of Centres of Excellence within the Government
- Data Centre Strategy
- ICT sustainability plan
- ICT systems to improve the management of the Government’s presence outside Australia in line with the Prime Minister’s directive.
- ICT workforce planning tool.
- Key suppliers to be subject to strategic management.
- Plans to support the Government’s Small and Medium Enterprise (SME) agenda, through ICT procurement.
- Rationalisation of the number of physical telecommunication links, both within Australia and internationally.
- Systems and applications where acquisitions or upgrades are customised or bespoke solutions will require approval by the Ministerial Committee.
- Volume arrangements for commodity hardware products and telecom services.
- Volume sourcing agreements for commonly used software.
Implementation
Successful implementation will require sustained leadership and drive at the Ministerial and top official levels. Furthermore, adequate resourcing for the ‘enablers of change’ is necessary both in terms of funding and suitable skills. The reforms should roll out over the next two years, and an independent review of the progress of implementing the reforms is suggested for the first quarter of 2010.
The full report is available here.
