review of the australian government's use of information ... · efficiency and effectiveness...

Review of the austRalian goveRnment’s use of infoRmation and communication technology

sir Peter gershon cBe fReng

August 2008

© Commonwealth of Australia 2008

ISBN 1921 1825 87 3 print

ISBN 1921 1829 03 online

Department of Finance and Deregulation

The Australian Government Information Management Office

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the

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iii

CABINET-IN-CONFIDENCE

REVIEW OF THE AUSTRALIAN GOVERNMENT’S USE OF INFORMATION AND COMMUNICATION TECHNOLOGY

CABINET-IN-CONFIDENCE ii

The Hon. Lindsay Tanner Minister for Finance and Deregulation Parliament House CANBERRA ACT 2600

Dear Minister

I have now concluded the Review of the Australian Government’s use of Information and Communication Technology (ICT) which you invited me to undertake on behalf of the Government on 25 March 2008, and attach my report for your consideration. The terms of reference asked me, amongst a number of issues, to review and report on both the efficiency and effectiveness of the Australian Government’s current use of ICT, to determine whether the Government is realising the greatest return from its investments in ICT, and to examine whether the right institutional arrangements are in place to maximise the return.

This report is the outcome of a process in which I have sought to (i) gather a substantial body of evidence to understand how ICT is currently used and managed; (ii) analyse the evidence to identify significant issues; and (iii) produce recommendations which will address these issues. This has involved engagement with the Prime Minister, Ministers, across government, and with industry and other interested bodies. During this process, 112 submissions were received, 63 meetings held, 3 visits made, and 1 large and 2 small surveys conducted.

The outputs of the review provide a snapshot of the current state of ICT in the Australian Government.

At the heart of my findings is a conclusion that, not withstanding the work undertaken to date, 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. While ICT has undoubtedly benefited government administration and the delivery of key public services, I have also found that benefits realisation and the measurement of benefits arising from investments in ICT are areas where there is substantial scope for improvement, together with measuring and improving the efficiency of current ICT operations.

My recommendations 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. Based on my experience of creating sustainable change in the United Kingdom public sector environment, there are two

iv


critical requirements which will determine the success of this reform program: firstly, sustained leadership and drive at Ministerial and top official levels and, secondly, ensuring the enablers of change are properly resourced, not only in funding terms but also with skills of the right calibre.

Given these two requirements are met, I am confident that the recommended actions and changes can be successfully implemented over the next two to three years and deliver substantial benefits to the Australian Government.

Thank you for the opportunity to lead such a stimulating and challenging review. I would like to pay tribute to my team of agency and AGIMO secondees whose commitment, contribution, professionalism and support made it possible to undertake an exercise of this complexity and size in a tight time frame.

Sir Peter Gershon CBE FREng 28 August 2008

CABINET-IN-CONFIDENCE iii

Contents v

GLOSSARY OF ABBREVIATIONS VIII

EXECUTIVE SUMMARY 1

Introduction/Context 1

Methodology 1

Keyfindings 2

Summaryofkeyrecommendations 3

Implementation 4

Acknowledgements 6

INTRODUCTION 7

CHAPTER 1: VIEWS FROM WITHIN THE AUSTRALIAN GOVERNMENT 13

1.1. ICTinvestmentdecisionmaking 13

1.2. Projectdelivery 15

1.3. Organisationalcapability 18

1.4. People 19

1.5. ManagingICTspend 20

1.6. ProcurementandICToutsourcing 22

1.7. Useofbestpractice 23

1.8. Viewsonexistingwhole-of-governmentarrangements 27

1.9. Viewsondatacentres 29

1.10. ViewsontheICTindustry 30

1.11. ICTarrangementsinministerialoffices 30

CHAPTER 2: VIEWS FROM OUTSIDE THE AUSTRALIAN GOVERNMENT 31

2.1. BetterutilisationofICTassets 31

2.2. Sharedservices 34

2.3. Standardised/coordinatedapproachtoprocurement 35

2.4. Useofcommercialoff-the-shelfsolutions 35

2.5. Needforstandardisation 36

2.6. Whole-of-governmentgovernance 36

2.7. Highcostsoftendering 37

2.8. TheAustralianGovernmentcomparedtoothergovernments 39

contents

Contentsvi

2.9. Skillsshortage 39

2.10. GreenICT 40

2.11. Securityclearances 41

2.12. Bestpractices 41

CHAPTER 3: SUMMARY OF SURVEY FINDINGS 45

3.1. Surveyapproach 45

3.2. Surveyresults 45

CHAPTER 4: KEY FINDINGS 55

4.1. Weakgovernanceofpan-governmentissuesrelatedtoICT 55

4.2. AgencygovernancemechanismsareweakinrespectoffocusonICTefficiency

andunderstandingoforganisationalcapabilitytocommission,manageand

realisebenefitsfromICT-enabledprojects 57

4.3. ThebusinessasusualICTfundinginagenciesisnotsubjecttosufficient

challengeandscrutiny 58

4.4. DisconnectbetweenthestatedimportanceofICTandactionsinrelationto

ICTskills 58

4.5. Thereisnowhole-of-governmentstrategicplanfordatacentres.Intheabsence

ofsuchaplan,thegovernmentwillbeforcedintoaseriesofadhocinvestments

whichwill,intotal,costsignificantlymorethanacoordinatedapproach 60

4.6. TheGovernmentICTmarketplaceisneitherefficientnoreffective 61

4.7. ThereisasignificantdisconnectbetweentheGovernment’soverallsustainability

agendaanditsabilitytounderstandandmanageenergycostsandthecarbon

footprintofitsICTestate 61

CHAPTER 5: RECOMMENDATIONS 63

5.1. Recommendation1–Strengthenpan-governmentgovernance 63

5.2. Recommendation2–StrengthenAgencyGovernance 66

5.3. Recommendation3–TightenthemanagementofICTbusinessasusualfunding 68

5.4. Recommendation4–EnhancethemanagementoftheAPSICTskillsbase 70

5.5. Recommendation5–DataCentres 72

5.6. Recommendation6–Improvetheefficiencyandeffectivenessofthe

ICTmarketplace 73

5.7. Recommendation7–SustainabilityofICT 75

CHAPTER 6: IMPLEMENTATION 77

Contents vii

APPENDICES 87

A TermsofReference 87

B Submissionquestions 89

C Surveyinstrument 92

D Submissionsreceived 95

E Consultations 99

F AgencieswithICTspendover$20millionin2007–08 102

G AgencieswithICTspend$2millionto$20millionin2007–08 103

H Candidatesforwhole-ofgovernmentapproaches 104

I Proposedcriteriaforwhole-of-governmentapproachesandarrangements

subjecttoopt-out 105

J ProposedroleofAGIMO 106

K LinkagebetweenTermsofReferenceandRecommendations 107

L DetailsofICTReviewTeam 109

Glossaryviii

GLOSSARY OF ABBREVIATIONS

ABS AustralianBureauofStatistics

ACT AustralianCapitalTerritory

AGD Attorney-General’sDepartment

AGIMO AustralianGovernmentInformationManagementOffice

AIIA AustralianInformationIndustryAssociation

ANAO AustralianNationalAuditOffice

APS AustralianPublicService

APSC AustralianPublicServiceCommission

ATO AustralianTaxationOffice

BAU businessasusual

BPTC BusinessProcessTransformationCommittee

CEO ChiefExecutiveOfficer

CIO ChiefInformationOfficer

CIOC ChiefInformationOfficerCommittee

CIOF ChiefInformationOfficerForum

CMMI® CapabilityMaturityModelIntegration

COBIT® ControlObjectivesforInformationandRelatedTechnology

COTS commercialoff-the-shelf

Defence DepartmentofDefence

DEWHA DepartmentoftheEnvironment,Water,HeritageandtheArts

EPEAT™ ElectronicProductEnvironmentalAssessmentTool

Finance DepartmentofFinanceandDeregulation

FMAAct FinancialManagementandAccountabilityAct1997

FMIS financialmanagementinformationsystem

GMS grantsmanagementsystem

GOTS governmentoff-the-shelf

GTS GovernmentTechnologySurvey

HRMIS humanresourcemanagementinformationsystem

HR humanresources

HVAC heating,ventilationandair-conditioning

ICON IntraGovernmentCommunicationsNetwork

ICT informationandcommunicationtechnology

IP intellectualproperty

ITIL® InformationTechnologyInfrastructureLibrary

Glossary ix

MoG machineryofgovernment

NPP newpolicyproposal

OGC OfficeofGovernmentCommerce

PM&C DepartmentofthePrimeMinisterandCabinet

PMBOK® ProjectManagementBodyofKnowledge

PRINCE2™ ProjectsinControlledEnvironments

PSPC ProtectiveSecurityPolicyCommittee

PUE powerusageeffectiveness

SCICT Secretaries’CommitteeonICT

SIGB Secretaries’ICTGovernanceBoard

SME smallandmediumenterprise

SOA serviceorientedarchitecture

SRO SeniorResponsibleOfficial

Treasury DepartmentoftheTreasury

UK UnitedKingdom

US UnitedStates

XBRL® ExtensibleBusinessReportingLanguage

ExecutiveSummary �

EXECUTIVE SUMMARY

INTRODUCTION/CONTEXT

On11April2008,theMinisterforFinanceandDeregulation,theHon.LindsayTanner

MP,announcedmyappointmenttoleadareviewoftheAustralianGovernment’suseof

informationandcommunicationtechnology(ICT).

METHODOLOGY

InresponsetotheTermsofReference,Iemployedanevidence-basedapproachtothereview.

Therewasaneedtogainacomprehensiveunderstandingofthestatusquoinorderto

determinethescopefor,andidentifyareasof,improvementofefficiencyandeffectiveness.

Therehavebeenthreemainphasestothereview:

Evidence gathering:Iinvitedsubmissionsfromagencies,industryandotherkeystakeholders

ontheuseofICTwithingovernment.Intotal,112submissionswerereceived.Ialsoissueda

comprehensivesurveyto100Financial Management and Accountability Act 1997(FMAAct)

agenciesrequestingdataonICTexpenditure,withdetailedquestionsoncostsperdesktop,

websites,thetopologyandcostoftelecommunicationsnetworks,useofhumanresource

andfinancialmanagementinformationsystems,grantmanagementsystemsandenergy

consumption.Inaddition,twosmallsurveyswereconducted.

Consultation: ThreevideoconferenceswereheldwithPortfolioSecretariesintheearlystages

ofthereview,followedbyaseriesofmeetingsinJulyandAugustwiththePrimeMinister,

Ministers,agencies,industryandotherstakeholders.Intotal,63meetingswereheld.In

addition,threevisitsweremade,onetotheAustralianHighCommissioninLondonand

twotodatacentresinCanberra,tounderstandinmoredetailcertainpointsraisedbysome

submissionsandmeetings.

Analysis and reporting:Theevidence,supplementedbyadditionalinputssuchastheAustralian

BureauofStatistics2002–03GovernmentTechnologySurvey,wasanalysedtoidentifykey

findings.Recommendationswerethendevelopedtoaddresstheidentifiedfindingsand,finally,

thisreportwasproducedwithintherequestedtimeframe.

ExecutiveSummary�

KEY FINDINGS

Afterdetailedanalysisoftheevidence,thereviewidentifiedthefollowingkeyfindings.

1. Thereisweakgovernance1ofpan-governmentissuesrelatedtoICT.

2. AgencygovernancemechanismsareweakinrespectoftheirfocusonICTefficiencyandanunderstandingoforganisationalcapabilitytocommission,manageandrealisebenefitsfromICT-enabledprojects.

3. Thebusinessasusual(BAU)ICTfundinginagenciesisnotsubjecttosufficientchallengeandscrutiny.

4. ThereisadisconnectbetweenthestatedimportanceofICTandactionsinrelationtoICTskills.

5. Thereisnowhole-of-government2strategicplanfordatacentres.Intheabsenceofsuchaplan,theGovernmentwillbeforcedintoaseriesofadhocinvestmentswhichwill,intotal,costintheorderof$1billionmorethanacoordinatedapproachovera15-yearperiod.

6. ThegovernmentICTmarketplaceisneitherefficientnoreffective.

7. ThereisasignificantdisconnectbetweentheGovernment’soverallsustainabilityagendaanditsabilitytounderstandandmanageenergycostsandthecarbonfootprintofitsICTestate.

Attheheartofthesefindingsisaconclusionthatthecurrentmodelofveryhighlevelsofagencyautonomy,includingtheabilitytoself-approveopt-instowhole-of-governmentapproachesintheICTdomain,leadstosub-optimaloutcomesinthecontextofprevailingexternaltrends,financialreturns,andtheaimsandobjectivesofthecurrentGovernment.Theimpactofthisautonomyhasbeenheightenedbyapreviouslackofstrongfocusonwhole-of-governmentICTissuesatbothMinisterialandtopofficiallevels.Thisconclusionappliesnomatterhowwell-intentionedindividualagenciesareintheirpursuitofwhole-of-governmentoutcomes.

ThecurrentmodelofoperationisveryclosetotreatingFMAActagenciesasthoughtheywereindependentprivatesectorentities.Theagenciesare,however,verydifferentinanumberofaspects:theyarefundedbythetaxpayer,theycannotgobankrupt,theyhaveverylittleornothingofthe‘time=money’dynamicoftheprivatesector,andtheyhavenosimplebottomlineoutcomesagainstwhichtheirsuccessorfailurecanbemeasured.

AgainstthebackgroundoftheGovernment’sobjectivesandthepressurestoimproveefficiencyandeffectivenesswhereverpossible,IconsidersomerebalancingbetweenagencyautonomyandcoordinationacrossgovernmentisbothdesirableandnecessaryinmeasuresrelatedtoICT.SuchamoveisinlinewithtrendsintheUnitedKingdom(UK)andUnitedStates(US)Governments,aswellaslargeprivatesectororganisations.

1 ‘Governance is defined as the system by which the current and future use of IT is directed and controlled. It involves evaluating and directing the use of IT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using IT within an organisation’ (Source: AS 8015-2005 Corporate Governance of ICT). The generally accepted principles of public sector governance according to the Australian National Audit Office (ANAO) include accountability, transparency, integrity, stewardship, efficiency and leadership (Source: ANAO (July 2003), ‘Better practice guide: Public sector governance and the individual officer’).

2 In this report the term ‘whole-of-government’ is used to mean all government agencies or a significant subset of them where there is a common issue which is important but not universal to all agencies.


SUMMARY OF KEY RECOMMENDATIONS

Thefollowingcomprisetheprimaryrecommendationsofthisreview.Thecompletelistof

mydetailedrecommendationsisfoundatChapter5ofthisreport.Asummaryofhowthe

recommendationsmeettheTermsofReferencecanbefoundatAppendixK.

Governance

•EstablishaMinisterialCommitteeonICTtoberesponsibleforthekeywhole-of-government

ICTpoliciesandtheoverallstrategicvisionforhowICTshouldsupporttheachievementofthe

Government’soutcomesandwiderpolicyagenda.

•CreateaSecretaries’ICTGovernanceBoard(SIGB)withastrongmandatefromthe

Governmenttodrivetheagreedrecommendationsarisingfromthereviewandfocus

onaddressingthekeybusinessissuestoimprovetheefficiencyandeffectivenessofthe

Government’suseofICT.

•Allowagenciestoobtainopt-outs,basedongenuinebusinessneed,fromagreedwhole-of-

governmentactivities.Opt-outstobeapprovedbytheMinisterialCommittee,informedby

theSIGB.

Capability

•Improveagencycapabilitytocommission,manageandrealisethebenefitsfromICT-enabled

projectsthroughtheimplementationofacommonmethodologyforassessingagency

capabilitybasedonself-assessmentandperiodicindependentaudit.EachagencyChief

Executivetoproposeatargetlevelofcapabilitybasedontheiragency’sandtheGovernment’s

strategicpriorities,andforthistobeindependentlyvalidated.Agenciestodevelopacapability

improvementplanwithcommitment,andagreedactions,toaddressidentifiedgaps.

ICT spend

•TargettomovetotalFMAActagencyICTspendfromanaverage77:23%splitbetweenICT

BAUactivitiesandcreationofnewcapabilityin2007–08toanaverage70:30%in2011–12.

•Asinitialstepstowardsthisgoal,reducetheICTBAUbudgetsofthelargest28FMAAct

agencies(Defenceexcluded)withICTspendsinexcessof$20millionperannumby15%from

2007–08actuals(foralistofagenciesrefertoAppendixF),withaphasedintroductionover

twoyears.

•CreateICTReviewTeamstohelptheseagenciesachieveorexceedthetargetreductions

withoutimpairingservicedeliverytocitizensandbusiness.

•Inaddition,IrecommendtargetingagencieswithtotalannualICTspendsbetween$2million

and$20milliontoachievea7.5%reductiononaverageoftheirBAUfrom2007–08actuals

(foralistofagenciesrefertoAppendixG),withaphasedintroductionovertwoyears.

ExecutiveSummary�

•The15%and7.5%reductionsintotalshouldsavetheGovernmentaround$140millioninthe

firstyearandinexcessof$400millioninthesecondandsubsequentyears.Ialsorecommend

that50%ofthesavingsgeneratedbytheserecommendationsbetransferredtoacentralfund

forreinvestmentinprojectstoimproveefficiencyandeffectivenessofICTBAUactivities,such

asreplacementoflegacysoftwareandhardwarewithhighsupportandmaintenancecosts.

Skills

•Createawhole-of-governmentAustralianPublicService(APS)ICTcareerstructure,including

traininganddevelopmentprogramsforICTprofessionalsinkeyskillsareas.

•Developandmaintainawhole-of-governmentstrategicICTworkforceplan.

•ReducethetotalnumberofICTcontractorsinuseacrossFMAActagenciesby50%overa

2-yearperiodandincreasethenumberofAPSICTstaff.ThisshouldsavetheGovernmentan

estimated$100million(acrossbothBAUandproject-relatedwork).

Data centres

Developawhole-of-governmentapproachforfuturedatacentrerequirementsoverthenext

10–15years.

Sustainable ICT

Developawhole-of-governmentICTsustainabilityplan(inconjunctionwiththeDepartment

oftheEnvironment,Water,HeritageandtheArts)tomanagetheenergycostsandcarbon

footprintoftheGovernment’sICTactivities.

IMPLEMENTATION

Myrecommendationsentailamajorprogramofadministrativereformandculturalchange.

BasedonmyexperienceofcreatingsustainablechangeintheUKpublicsectortherearetwo

criticalrequirementswhichwilldeterminethesuccessoftheproposedprogram:first,sustained

leadershipanddriveatMinisterialandtopofficiallevels;second,ensuringtheenablersof

changeareproperlyresourcednotonlyinfundingterms,butalsoskillsoftherightcalibre.

TheearlydecisionsoftheMinisterialCommitteeandtheSIGBwillneedtosendoutclear

signalsaboutthepaceanddirectionofchangewhichisthenreinforcedthroughsubsequent

decisions.Itwillbeessentialtoensurethatagreedwhole-of-governmentICTapproachesand

arrangementsare‘fitforpurpose’.

Thefollowingpagesetsoutaproposedimplementationplanforthekeyrecommendations

basedontheassumptionthattheGovernmentapprovesallmyrecommendationsin

November2008.



5 CABINET-IN-CONFIDENCE

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Strengthen pan-government governance

Ministerial Committee on ICT

Secretaries’ ICT Governance Board

Whole-of-government opt-out criteria

Strengthen agency governance

Improve agency capability assessment

a. Capability methodology and conduct pilots

b. Capability methodology implementation across largeagencies

c. Large agencies propose target capability and develop capability improvement plan

Tighten the management of ICT business as usual funding

BAU ICT budgets

a. ICT Review Teams methodology and efficiency metrics

b. ICT Review Teams in agencies phase 1

c. ICT Review Teams in agencies phase 2

Enhance the management of the APS ICT skills base

ICT skills a. Whole-of-government ICT career structure

b. Whole-of-government ICT workforce plan

Reduce total APS contractors and increase the number of APS ICT staff

Examine current security vetting processes and identify best practice

Data centres Whole-of-government data centre strategy

Sustainability of ICT

Whole-of-government ICT sustainability plan

Enabling Ongoing

Implementation activities fall into two broad categories: those enabling activities which are one off and need to be undertaken at the beginning of or early in the implementation phase (e.g. the development of efficiency metrics), and those activities that are ongoing (e.g. the implementation and ongoing use of efficiency metrics). In most cases an ongoing activity is preceded by an enabling activity.

efficiency metrics), and those activities that are ongoing (e.g. the implementation and ongoing use of efficiency

is preceded by an enabling activity.Implementation activities fall into two broad categories: those enabling activities which are one off and need to be undertaken at the beginning of or early in the implementation phase (for example the development of efficiency metrics), and those activities that are ongoing (for example the implementation and ongoing use of efficiency metrics). In most cases an ongoing activity is preceded by an enabling activity.

ExecutiveSummary�

ACKNOWLEDGEMENTS

Iamextremelygratefultothosewhohavehelpedtomakethisreviewpossible.Inparticular,I

wouldliketothank:

•thePrimeMinisterandtheMinisterforFinanceandDeregulationfortheirinputandsupport

•Ministerswhogenerouslygavemetheirtimeandviewsandprovidedmewithagreater

understandingoftheiraimsandobjectivesandthewiderAustraliancontext

•theAustralianGovernmentInformationManagementOfficefortheprovisionoftalented

stafftotheReviewSecretariat

•Centrelink,theAustralianTaxationOfficeandtheDepartmentofEducation,Employment

andWorkplaceRelationsfortheprovisionofhigh-qualityagencysecondeestothereview

secretariat

•theDepartmentalSecretaries,AgencyChiefExecutiveOfficers,theAuditor-General,the

AustralianPublicServiceCommissioner,ChiefInformationOfficersandChiefFinancial

Officersoftheagenciesthatprovidedsubmissions,surveyresponsesandtheirtimetomeet

withme

•individualsandorganisationsoutsidetheGovernmentwhocontributedsubmissionstothe

review,andwhometwithmetodiscusstheirsubmissions

•thoseindividualsandorganisationsundertakingdiscretetasksinsupportofthereview

•theActingAustralianHighCommissionertotheUK,andAustradeinLondonfortheirhelp

andsupport

•mywife,whoputupwithmanyveryearlymorningandlatenightphonecallsIheldwiththe

reviewteaminAustralia,andmyextendedabsenceduringAugust.

Introduction �

INTRODUCTION

Informationandcommunicationtechnology(ICT)intheAustralianGovernment

(theGovernment)operateswithinabroadercontextandhencemusttakeintoaccountkey

macronationalandglobaltrends.Thesetrendsinclude:

•growingexpectationsamongcitizensandbusinessforthequalityofservicesdelivered

bygovernments

•increasingconcernsaboutclimatechange

•publicsectorfundingpressures

•technologytrends

•globalisation

•ICTworkforcechallenges.

Thesetrendswillcontinuetohaveanincreasinginfluenceontheapplication,delivery,costand

demandforICTservices.Theyshouldthereforebeconsideredinordertodevelopanenduring

whole-of-governmentstrategy.

Growing expectations among citizens and business for the quality of services delivered by governments

Citizensnowexpectgovernmentservicestobeasgoodasthoseprovidedbytheprivate

sector.AsDeloitte3commented,‘One-size-fits-allsolutionsrequiringcitizenstonavigatea

complexbureaucraticmazetoobtainservicessimplydonotcutitintoday’s“on-demand”

world.Restoringtheconfidenceofcitizensintheirpublicinstitutionsmeansdemonstrating

competenceincarryingoutthedifficulttaskofgovernanceinthe21stcenturyanddelivering

citizensbettervaluefortheirhard-earnedtaxdollars.’Therealityisthatcitizensview

governmentasawhole–theydonotwanttorepeatthesameinformationwhenaccessing

servicesfromdifferentagencies.Essentially,thiscallsforimprovedcollaboration,integration

andsharingofinformationbetweengovernmentagencies,keepinginmindprivacyandsecurity

considerations.

ArelativelyrecentsurveyofAustralians’useofandsatisfactionwithe-governmentservices4

showedthattheinternethasbecomeanindispensablechannelfordeliveringgovernment

servicestoAustralians;itsuseiscontinuingtogrowanditisnowthepreferredservicedelivery

channelforamajorityofpeople.Thesurveyreportalsohighlightedthecontinuingchallenges

3 Deloitte Touche Tohmatsu (2007), ‘One size fits few: Using customer insight to transform government’, http://www.deloitte.com/dtt/cda/doc/content/dtt_ps_onesizefitsfew_040908(1).pdf

4 Australian Government, Department of Finance and Deregulation (December 2007), ‘Australians’ use of and satisfaction with e-government services – 2007’, http://www.finance.gov.au/Publications/use-of-e-government-services-2007/docs/31576_AGIMO_Satisfaction-ALL.pdf

Introduction�

facingtheGovernmentindeliveringservicestotheAustralianpublic.Citizensaresayingthat

theyvalueconvenienceintheirinteractionswithagencies,althoughforsome,theadvantages

ofbeingabletodealdirectlywith‘real’peopleface-to-faceorbytelephonearepreferable.

Citizensarealsosayingtheywante-governmentservicesandgovernmentwebsitestobeeasier

tofindandtouse.

Butwhilecitizensaredemandingmorejoined-upgovernmentservices,theyalsowanttheir

informationtoremainsecureandtheirprivacyprotectedfromcybercrimeandidentityfraud.

ThechallengefortheGovernmentistomaintainthisdelicatebalanceofmakingtheprovision

ofintegratedservicesbothsecureandconvenientsoastobuildandmaintaintrust.

Increasing concerns about climate change

Societiesandgovernmentsarebecomingincreasinglyconcernedabouttheenvironment.

Governmentsarefacingpressuretodealwiththeeffectsofglobalwarming,aforeseeable

declineinfossilfuelsandgassupplies,andsteeplyrisingenergycosts.Asaresult,the‘greening’

ofgovernmentpoliciesistakingplacearoundtheworld.

ThecurrentGovernmentiscommittedtotakingactiontoreducetheimpactofclimate

change,byreducinggreenhousegasemissionsandbyrespondingtothepotentialimpacts

ofunavoidableclimatechange.TheGovernmentisconsideringintroducingacapandtrade

emissionstradingschemeby2010,andamandatoryrenewableenergytargetby2020.5

ThesechangeswillneedtobetakenintoaccountwhenanoverarchingICTstrategyisdeveloped

fortheGovernment.InApril2007GartnerestimatedthattheglobalICTindustryaccounted

for2%ofCO2emissions,onaparwiththeaviationindustry.6Gartneralsoestimatedthatlarge

organisationsspendbetween4%and10%oftheirtotalICTbudgetsonenergyandthatthis

numbermayquadrupleby2012duetothetwinfactorsofpower-hungryhardwareandrising

energycosts.7InAustralia,theAustralianComputerSocietyundertookanemissionsauditonthe

amountofcarbondioxidebeinggeneratedbyAustralianbusinesses’useofICT.Theresultsofthe

auditindicatedthatICTusebyAustralianbusinessesgenerated7.94milliontonnesofcarbon

dioxidein2005,equivalentto1.52%oftotalnationalcarbondioxideemissions.8

TheGovernmentwillbeunderincreasingpressuretoarticulateaviablestrategytomakeICT

environmentallysustainable.

5 See Australian Government (July 2008), ‘Carbon Pollution Reduction Scheme Green Paper summary’, http://www.climatechange.gov.au/greenpaper/summary/pubs/greenpaper-summary.pdf

6 Gartner Press Release (April 26, 2007), ‘Gartner estimates ICT industry accounts for 2 percent of global CO2 emissions’, http://www.gartner.com/it/page.jsp?id=503867

7 Gartner Press Release (November 7, 2006), ‘Gartner says look beyond power issue as pressure mounts for ‘greener’ IT’, http://www.gartner.com/it/page.jsp?id=498224

8 Australian Computer Society (August 2007), ‘Policy statement on green ICT’, http://www.acs.org.au/acs_policies/docs/2007/greenictpolicy.pdf

Introduction �

Public sector funding pressures

Effectsofanageingpopulation,globalcompetitionamongvariouseconomies,andclimate

changearecreating,andwillcontinuetoplace,pressureonpublicsectorbudgetstoincrease

spendinginareassuchashealth,educationandtransport.TheGovernmentmustfindwaysof

improvingtheefficiencyandeffectivenessofitsservicedelivery.Thismeansprovidingvaluefor

moneybyimprovingqualityofservice(accessibilityforallandacceptablecitizenexperiences

andoutcomes),andreducingthecostsinvolvedinserviceprovision.

Technology trends

Businesses,individualsandpublicinstitutionsareadoptingawidevarietyoftechnologiesand

tosuchanextentthattheyarechangingthewayeachentityfunctionsandrelatestoothers.

Governmentsingeneral,althoughmoreconservativeusersofsomenewertechnologies,

stillneedtobeawareofbroadertechnologytrendsandthepotentialimpactoftheseon

governmentpolicies,operationsandservicedelivery.

Forexample,theinternethasmovedtoWeb2.0,amoreinteractivemodelinwhichuser-

generatedcontentisfrontandcentre,andhasthepotentialtochangerelationshipswith

citizens,intermediariesandexternalserviceproviders,aswellasamonggovernmentagencies.

Governmentswillneedtoexploreandshifttothisnewparadigm.

Manyprivatesectororganisationshavealreadyembracedserviceorientedarchitecture(SOA),

whereICTassetsarealignedtobusinessservicesinastandard,flexibleandarchitectedfashion,

andalsothebenefitsthatcomewithitsuchasincreasedagility,re-useandreducedcosts.

GovernmentorganisationsareslowlymovingtowardsleveragingSOAinthedevelopmentoftheir

applications,butthereispotentialforthepacetobequickenedandforfurtherthinkingtodoneat

thewhole-of-governmentlevelratherthanagencyleveltomaximisethepotentialbenefits.

Advancesinprocessingpower,storageandmemorytechnologieshavepavedthewayformore

sophisticateduseofdataanalyticsandbusinessintelligencetechnologies.Governmentsare

alsousinggeospatialtechnologiesandresourcestooptimiseservicedeliveryandtoimprove

decisionmakinginareassuchascollectionandanalysisofintelligenceinformation,protection

ofcriticalinfrastructureandresponsetoemergencies.However,theexplosivegrowthof

data,compliancerequirementsandincreasinglycomplexbusinessenvironmentshavemade

informationstoragemanagementmorecriticalthanever.Governmentsneedtoensurethat

theyareabletomaintaincontrolovertheirabilitytostoreandmanagethiskeybusinessasset,

havingdueregardtoprivacyconcerns.

Introduction�0

Globalisation

Countriesandsocietiesarebecomingmoreeconomicallyinterdependentacrosssocial,political

andculturalboundaries.Thereisgreaterglobalmovementofgoodsandservices,labourand

people,capitalandtechnologyamongpreviouslyindependentandsovereignentities.

ThesetrendsneedtobeconsideredfromanICTperspective.Forexample,globalisationisenabling

largeemergingeconomieswithhighorincreasingeducationalstandards(suchasBrazil,Russia,

IndiaandChina)todrawactivityawayfromthedevelopedeconomies–oftendeliveringequivalent

servicesatafractionoftheprice.TheremaybewaysforICTtoharnesssomeofthesetrendsto

addressotherchallengessuchastheICTskillsshortage.ThepotentialforoutsourcingICT-related

activitiestolowercostcountrieswithhighlyskilledworkforcesisalreadybeingutilisedbymany

privatesectororganisationstoimprovetheircompetitiveness.Forgovernments,morecomplex

trade-offshavetobemadewhenconsideringwhetherICT-relatedactivitiesshouldbeundertaken

offshore.However,evenifpoliticalconsiderationslimittheactivitiestoonshorelocations,theremay

bescopefordeployinggovernmentICTworktoreinforceregionaleconomicdevelopmentpolicies.

ICT workforce challenges

Australia’sunemploymentrateatJuly2008was4.3%,andsomepartsofAustraliaare

experiencingevenlowerrates(forexample,theAustralianCapitalTerritoryhadan

unemploymentrateof2.7%inJuly2008).9Coupledwithanageingpopulation,thisrepresents

asignificantpolicyandresourcingchallengefortheGovernmentasamanagerofeconomic

growthandasalargeuserofskilledlabour.

AccordingtoareportpreparedfortheAustralianComputerSocietyandtheAustralian

InformationIndustryAssociation10,theAustralianICTindustryislookingatashortfallof14,000

jobsby2010,growingto25,000withinanother10years.ThereportalsowarnedthattheICT

skillsshortagewillcontinueatcurrentorworselevelsuntilatleast2012,andarguedthat

temporarymigrantvisasareonlyashort-termsolution.ThereportsaidthatAustraliamustact

quicklytoincreaselocalgraduatenumbersbyatleast12.5%ayearandreducethelossofICT

professionalstooverseasemployers.

SuchICTskillsshortageswillalsodrivetheneedforbettersharingofICTassetsacrossthe

wholeoftheGovernment.InadditiontogrowingitsownICTprofessionalsthroughtraining

anddevelopment,otheroptionsmayincludeemployingolderAustralians,attractingmore

femalestoacareerinICT,andpartneringwithacademicinstitutions.TheGovernmentwill

alsoneedtoconsiderstrategiestoensureithassufficientskilledICTprofessionalstomeetthe

demandsofserviceprovision.

9 http://www.abs.gov.au

10 Centre for Innovative Industry Research Inc. (August 2008), ‘The ICT skills forecast project. First report: Quantifying current and forecast ICT employment (Executive summary and contents)’, http://www.acs.org.au/attachments/ICTSkillsForecastingReportExecSummaryAug08.pdf

Introduction ��

The changed Australian political context

ThecurrentapproachtothegovernanceandmanagementofICTacrossFMAActagencies,

wheretheyhaveveryhighlevelsofautonomy(includingtheabilitytoself-approveopt-insto

whole-of-governmentapproachesintheICTdomain),mayhavebeenanappropriatemodelin

thecontextofthepreviousgovernment’sobjectivesandpolicies,andthetrendsofthe1990s

andearlypartsofthisdecade.However,therearenowadifferentsetofexternaltrendsand

mydiscussionswiththePrimeMinisterandsomeotherMembersofCabinethaveindicatedto

methatthereisnowaverydifferentpoliticalandpublicadministrationagendainwhichitis

appropriatetoconsiderwhetherthestatusquoisstillfitforpurpose.

��

Chapter One:ViewsfromwithintheAustralianGovernment ��

chaPteR �: views fRom within the austRalian goveRnmentThischaptersummarisesthekeythemesraisedinsubmissionsfromAustralianGovernment

agenciesandin24bilateralmeetingswithagencies.Atotalof41Financial Management and

Accountability Act 1997(FMAAct)agencieswereinvitedtomakesubmissionstothereview.

Theywereaskedaseriesofquestionsabout:

•thealignmentoftheirICTstrategytotheiroverallstrategicpriorities

•howtheymeasuredtheperformanceoftheirICTinvestments

•howtheymeasuredtheirorganisation’scapabilitytocommission,manageanddeliver

ICT-enabledprograms

•howtheymeasuredtheefficiencyandeffectivenessoftheirICTspend

•theirriskmanagementstrategies

•detailsofbestpracticesthatcouldbeshared

•theirviewsonexistingwhole-of-governmentICTarrangements.

Atotalof40agencysubmissionswerereceivedandreviewed.Fouragencies–theDepartment

ofthePrimeMinisterandCabinet(PM&C),theAustralianNationalAuditOffice(ANAO),the

DepartmentofFinanceandDeregulation(Finance)andtheDepartmentoftheTreasury(Treasury)

–wereaskedspecificquestionsrelatedtotheirrespectiveoversight/governanceroles.Accordingly,

percentagesraisedinthischapterdonotincludeconsiderationofPM&CandtheANAO,butdo

includeFinanceandTreasury,astheyalsoprovidedresponsesontheirICToperations.AppendixD

containsafulllistoftheagenciesthatmadeasubmissiontothereview.

1.1. ICT INVESTMENT DECISION MAKING

1.1.1. Prioritising investments

Thirty-fiveagenciesdetailedformalprocessesforprioritisingICTinvestmentatthe

organisationallevel,withonlythreeagenciesnotprovidinganydetails.Prioritiesareset

throughgovernancearrangements(35agencies),combinedinsomeinstanceswithbusiness

caseprocesses(10agencies)orbudgetmanagementprocesses(sixagencies).

Nineteenofthese35agencieswereabletodetailreasonablycomprehensiveprioritisation

techniquesorextensiveassessmentcriteriatorankcompetinginvestments,withsixagencies

activelygroupinginvestmentsintoprioritygroups.However,theother16agencieswereonly

abletodetailbasicprioritisationprocessesandcriteria.

Chapter One:ViewsfromwithintheAustralianGovernment��

Agenciescitedthefollowingcriteriausedwhenrankingcompetinginvestmentpriorities:

•alignmentwithgovernment,strategicandbusinesspriorities(30agencies)

•strategicimpact,value,benefitsandsavings(26agencies)

•risks(15agencies)

•resourcesandcapabilitytodeliver(13agencies)

•costsandavailablefunding(13agencies)

•alignmentwithexistingarchitecture(nineagencies)

•dependenciesandprerequisites(threeagencies)

•timeframe(twoagencies).

1.1.2. Alignment of ICT investments with strategic priorities

Thereviewobservedthatthereareveryfewframeworksinplaceatthewhole-of-government

levelforsettingprioritiesforICTinvestmentacrossportfolios.Thereisnoformalprocessby

whichagenciescanobtaininformationonICTactivitiesinotheragenciesbeforeinvestingin

ICT.Itwasalsonotedthatthetechnicalcapacityofthethreecentralagencies(Finance,PM&C

andTreasury)toassessandadviseonICTinvestmentproposalsisatfullstretchduringthe

budgetcycle.Thisresultsinfeedbackonindividualproposals,ratherthantakingawhole-of-

governmentapproachtoinvestment.

Furthermore,alongstandingfeaturenotedbyseveralagencyheadswasthatinvestmentin

ICTtosupportpolicydeliveryhas,insomeinstances,notbeenconsideredbeforeannouncing

policies.PolicymakersandMinistersarenotalwaysfullyawarethatinadequateconsideration

ofdeliveryimplicationsattheoutsetcanhavesignificantadverseimplicationsonthecostof

policydelivery.Therewassomelimitedevidenceofbestpractice,wherethoseresponsiblefor

deliveryweredeeplyinvolvedinthepolicyformulationprocess.

Attheorganisationallevel,32agencies(82%)notedthattheyensurealignmentofICT

investmentstostrategicprioritiesthroughformalplanningprocessesandgovernance

mechanisms.Agencystrategicprioritiesinclude:

•enhancingthecapabilityofstaff(14agencies)

•improvingorganisationaleffectivenessandefficiencytodeliverbetterservices(12agencies)

•increasingcommunityconfidence(10agencies)

•improvingcollaborationandengagement,andstrengtheningstakeholderrelationships

(nineagencies)


•supportingeconomicdevelopment(sevenagencies)

•providingsoundandtimelyadvice(fiveagencies)

•deliveringgovernmentpolicy(fouragencies).

AgenciesreportedthatalignmentisfacilitatedthroughtheinfluenceofseniorICTexecutives

inagency-widegovernancearrangements.However,inonlyafewcasesdidagenciesindicate

thattheChiefInformationOfficer(CIO)isamemberoftheexecutiveteam.Onlytwoagencies

reportedthattheirICTgovernancestructuresareunderpinnedbyAS8015-2005Corporate

GovernanceofICT.Anadditionaltwoagencieseitherreferencedthestandardintheir

submissions,orstatedthattheyplantouseitinthefuture.

1.1.3. Future importance of ICT to government business

Acrosstheboard,agenciesreportedthatICTisafundamentalbusinessenablerandanintegral

partoftheiroperations.TherewasalsoaunanimousviewthatICTwillcontinuetoincrease

inimportance.Inparticular,agenciescommentedontheincreasingneedformorerobustand

agilesystemsto:

•meetrisingexpectationsfromcitizensandgovernment

•delivermoreefficientandeffectiveservicesandoperations

•harnessinformationandintelligence

•manageincreasedcomplexityintheregulatory,businessandpolicyenvironments.

Nineteenagenciessaidthattheyexpectthedemandforonlinetransactionalinteractionsto

continuetoincrease,withthesafeguardingofcitizens’informationanimportantconsideration.

Improvingthelevelofcollaborationandinformationsharingbetweenagenciesandother

externalorganisations(forexample,thetradeandinvestmentcommunity,agencieswithstrong

internationallinkssuchaspolicingandpatents)isanimperative(andachallenge)for15agencies.

1.2. PROJECT DELIVERY

Thereareseveralwhole-of-governmentinitiativesthatexamineandreportonthedeliveryof

majorgovernmentinvestmentprojectsandprograms,includingICT-enabledprojects.These

aretheGatewayReviews,ANAOauditactivities,andthePM&CCabinetImplementationUnit’s

TrafficLightReports.

GatewayReviewsassistFMAActagenciestoimprovethelikelihoodofsuccessfuldeliveryof

projectson-time,on-budgetandwiththeintendedbenefitsrealised.However,Iheardoneview

thatGatewayReviewrecommendationshave,insomecases,notbeenadopted.


TheANAOsubmissionhighlightedthatitsauditsofICT-enabledprojectsidentifiedareasfor

furtherimprovingthemanagementanduseofICT.Theseincludeensuringbusinesscases

includemeasuresofbothprojectsuccessandstandardisedcostingmethods.

MostagencyresponsesonhowtheymeasurewhethertheirICTinvestmentsweremeeting

theirplannedoutcomesfocusedonlyonnewICT-enabledprojects,ratherthanoninvestmentin

existingbusinessasusualactivities.Responsesrevealedthatmostagencieshaveformalprocesses

inplacefornewprojects,suchasaprojectmanagementframeworksorgovernancemechanisms.

1.2.1. Use of project management frameworks

MostagenciesusesomeformofprojectmanagementmethodologytomanagetheirICT

projects.Twenty-twoagencies(59%)usethePRINCE2™methodologyasthebasisoftheir

projectmanagementmethodology,withafurthertwoagenciesplanningtointroduce

PRINCE2™inthenearfuture.Additionally,fiveagenciesusetheProjectManagementBodyof

Knowledge(PMBOK®)tounderpintheirprojectmanagementmethodologies(fouragenciesare

usingPMBOK®intandemwithPRINCE2™),whileanothertwoagenciesplantoadoptPMBOK®.

1.2.2. Use of governance mechanisms

FiveagenciescitedtheirinvolvementinGatewayReviewsasagovernancemechanismfor

projectdelivery.Oneagencycitedtheuseofacross-agencyprojectboard,while15agencies

discussedtheiruseofinternalprojectboards.Tenagenciesnotedthattheirprojectsreceived

seniormanagementendorsement.

1.2.3. Risk management

Twenty-twoagenciesindicatedthattheirriskmanagementframeworkswerecompliant,

consistentwith,orbasedonAS/NZS4360:2004RiskManagement.

Nineagenciesnotedthattheirauditcommitteeswereresponsibleforoverseeingrisk

managementwithintheagency.Fouragencieshavecentralisedoversightofriskmanagement

withintheorganisationthroughenterpriseriskregisterstomanageagency-widerisks.

Agencieshavetakendifferentapproachestoembeddingriskmanagementwithintheir

operations,includingincorporatingriskmanagementwithintheirChiefExecutiveInstructions,

integratingriskmanagementwithintheirbusinessplanningandprojectmanagement,

applyingprojectmanagementmethodologiessuchasPRINCE2™,anddesignatinganagency

riskmanager.


1.2.4. Benefits realisation plans

Twentyagenciesreportedsomeformofevaluationofbenefitsattheendoftheproject

comparedtothoseidentifiedintheprojectinitiationdocuments.Eightagenciesreported

thattheyarepreparingtointroduceformalbenefitsrealisationevaluationprocesses,while

fiveagenciesnotedthattheytrackbenefits,butdidnotofferevidenceofaformaldedicated

process.Twoagenciesdidnotdiscussbenefitsrealisation.

1.2.5. Evidence from recent ICT projects

Agencieswereaskedtoprovidedetailsoftheir5–10majorICT-enabledprojectsandhowthey

measuredtheirsuccessintermsofcost,time,specificationanddeliveryofanticipatedbenefits.

Agenciesprovideddetailsof193completedprojects.Table1.1detailsobservationsmade

regardingtheperformanceoftheseprojects.




Table 1.1 – Performance of 193 completed projects

COST TIME BENEFITS ACHIEVEMENT • 23% (45) were delivered over

budget

• 39% (74) were delivered under budget

• 13% (25) had no variance between estimated cost and actual cost

• 25% (49) were silent on the question

• 33% (64) were delivered over time

• 2% (3) were delivered before time

• 41% (80) had no variance between estimated time and actual time to delivery


• 44% (86) reported achievement of benefits but did not provide evidence of measurement

• Only 5% (10) reported actual measurement of benefits and compared anticipated benefits with actual benefits realised

• 45% (86) reported outcomes that were not measurable


Thirty four of the 193 projects recorded expenditure of more than $5 million. Table 1.2details observations made regarding the performance of these larger projects.

Table 1.2 – Performance of projects over $5 million

COST TIME BENEFITS ACHIEVEMENT • 12% (4) were delivered over budget

• 29% (10) were delivered under budget

• 9% (3) had no variance between estimated cost and actual cost


• 12% (4) were delivered over time

• No projects were delivered under time

• 38% (13) had no variance between estimated time and actual time to delivery


• 36% (12) reported achievement of benefits but did not provide evidence of measurement

• 11% (4) reported actual measurement of benefits and compared anticipated benefits with actual benefits realised

• 38% (13) reported achieving actual outcomes that were not measurable


1.3. ORGANISATIONAL CAPABILITY

The review asked agencies to provide details of how the capability of their organisation tocommission, manage and deliver successful ICT enabled programs is measured. It also askedagencies to provide an assessment of their current capability, and any plans to improve it.

1.3.1. Current assessment of capability

In responding to this question, only three agencies provided an assessment of theirorganisation’s overall capability, with the remaining agencies interpreting the question solelyas ICT capability, after being given an opportunity to reconsider their response. Six agenciesprovided a high assessment of their ICT capabilities, while 15 agencies stated that their ICT

1.3. ORGANISATIONAL CAPABILITY

Thereviewaskedagenciestoprovidedetailsofhowthecapabilityoftheirorganisationto

commission,manageanddeliversuccessfulICT-enabledprogramsismeasured.Italsoasked

agenciestoprovideanassessmentoftheircurrentcapability,andanyplanstoimproveit.

Table 1.1 – Performance of 193 completed projects

Table 1.2 – Performance of projects over $5 million


1.3.1. Current assessment of capability

Inrespondingtothisquestion,onlythreeagenciesprovidedanassessmentoftheir

organisation’soverallcapability,withtheremainingagenciesinterpretingthequestionsolely

asICTcapability,afterbeinggivenanopportunitytoreconsidertheirresponse.Sixagencies

providedahighassessmentoftheirICTcapabilities,while15agenciesstatedthattheirICT

capabilitiesweremediumandeightsaidtheywerelow.Theremainingagenciesofferedno

assessmentofcapability.Intheabsenceofacommoncapabilityframework,agenciesuseda

rangeofpartialmeasurestomaketheseassessments.

1.3.2. Measurements of capability

SeventeenagenciesmeasuredtheircapabilitybywhetherICThadbeenabletodeliveragainst

thebusinessrequirementsinatimelymanner.Twenty-fiveagenciescitedtheirstrongproject

managementcapabilitiesasevidenceoftheirstrongcapabilities,whilefivepointedtostaffand

usersatisfactionsurveysasanindicatoroftheircapability.

Thereissomeusebyagenciesofformalassessmentframeworkstoassesscapability.Seven

agencieshaveusedtheSoftwareEngineeringInstitute’sCapabilityMaturityModelIntegration

(CMMI®)toassesscapabilityandafurtheragencyplanstouseCMMI®,butthesehavemainly

beeninformalinternalassessments.

Atotalof11agenciesreportedusingtheITGovernanceInstitute’sControlObjectivesfor

InformationandRelatedTechnology(COBIT®)maturitymodels,whichprovideamanagement

toolenablingbenchmarkingandtargetingofmaturitylevels.

EighteenagenciesreportedusingInformationTechnologyInfrastructureLibrary(ITIL®),whilea

furtherfouragenciesreportedthattheyareplanningtoadoptit.Onlyoneagencynotedthatit

hadundertakenanITIL®ProcessMaturityAssessment,conductedbyanexternalprovider.

Oneagencyobservedthatthereisnoevidencethatcurrentinvestmentapprovalprocesses

includeanyrigorousandobjectivemethodologyforassessingtheorganisationalcapabilityof

anagencyseekingfundingforICT-enabledprojectsduringthebudgetprocess.Equally,thereis

noassessmentofthelikelihoodofdeliveringprojectoutcomes.

1.4. PEOPLE

TwelveagenciescommentedontheadverseimpactofICTskillsshortages,bothinsubmissions

andduringbilateralmeetings.ThereisgeneralagreementamongtheseagenciesthatICTskills

shortagesarewidespread,andthatanagency’sabilitytoattractandretainhighlyskilledand

motivatedpeoplehasasignificantimpactonbothefficiencyandeffectiveness,althoughfive

agenciesobservedthattheyarenotexperiencingcurrentpressurefromshortages.

Chapter One:ViewsfromwithintheAustralianGovernment�0

Thoseagenciesthatreportedanadverseimpactoftheskillsshortagesdiscusseditintermsof

itseffectonagencycapability.SomeagenciesnotedthatbothBAUandproject-relatedactivity

wereatrisk.Oneagencyalsonotedthatitssupplierswereconstrainedintheirabilitytoservice

contracts,asaresultoftheskillsshortage.Theimpactofcompetitionbetweenagenciesfor

scarceskillsoncontractorcostswasalsocommentedupon.

Agenciesareturningtoamixofsolutionstocopewithskillsshortages.Theseinclude:

•Adoptionofworkforceplanning,togetherwithflexibleemploymentstrategiestodealwith

anageingICTworkforce.FouragenciesreportedimplementationofanICT-specificworkforce

plan,whiletwomorearedevelopingsuchplans.

•Relianceoncontractors,withheavypremiummarketratespaidbysomeagencies.Many

agenciescommentedthattheybelievedtheirpanelarrangementswereverysuccessful.

•Partneringwithprivatesectororganisationstodeliverprojects.

•LocationofICTstaffoutsideofCanberra.Duringagencybilateralmeetings,threeagencies

notedthattheyhadconsciouslymovedICTpositionstootherlocationsthroughoutAustralia

inresponsetotheICTskillsshortage.11Oneagencynotedthatthisapproachhad,tosome

extent,bufferedthemfromtherisksinherentintheskillsshortage.Thisagencynotedthat

projectworkwaseasiertodispersethanongoingproductionsupport.

•Internationalrecruitment.

•Educationandgraduaterecruitment,includingpartneringwithtertiaryinstitutions,running

traineeshipprograms,andsupportingapprenticeships.Twoagenciesreportedthattheyhave

partneredwithtertiaryinstitutionsinanefforttoproducegraduatesskilledintheiragency’s

particularrequirements.TheDefenceMaterielOrganisationispartneringwithatertiaryinstitution

todevelopaMastersinprojectmanagementwhichisopentoallgovernmentemployees.

1.5. MANAGING ICT SPEND

AgencieswereaskedhowtheyensuredthattheirICTspend(bothoperatingandcapital)isas

efficientandeffectiveaspossible,andtoprovidedetailsoftheperformancemetricsusedto

measuretheefficiencyandeffectivenessoftheirICTfunction.

1.5.1. Measures of efficiency

VeryfewagenciessaidthattheyusedmetricstoassesstheefficiencyoftheirICTspend.Only

twoagenciesregularlyreportedefficiencymetricsandtargetstotheirseniorexecutive.A

furthertwoagenciessaidthattheyusedefficiencymetricsannually,whilesevenreportedthat

theyundertakeefficiencybenchmarkingonanadhocbasisusingcontractedserviceproviders.

11 It is recognised that many more agencies have ICT capability in other locations outside of Canberra due to their headquarters being located in non-Canberra locations, and other business reasons. However, as reported in 3.2.3, 79% of ICT staff are located in the Australian Capital Territory (ACT).


Fouragenciesaredevelopingefficiencymeasurementmetricsorareimplementingactivity-

basedcostingtounderstandtheirICTcosts.Therewassomeevidenceofmultipleinstancesof

taxpayers’moneybeingspenttoobtainbenchmarkdatainareassuchasdesktops.

1.5.2. Measures of effectiveness

Twenty-sixagenciesreportedthattheyemploymetricstomanagetheeffectivenessoftheirICT

operation,suchasavailability,outagereporting,numberofclientapplicationservicerequests

completed,andcustomersatisfactionsurveys.Afurthertwomanagetheeffectivenessoftheir

ICTserviceprovidersthroughtheuseofoperationalmetrics.

1.5.3. Other mechanisms to measure efficiency and effectiveness

Oftheremainingagencies,ninereportedusingqualitativeratherthanquantitativeefficiency

andeffectivenessmeasures,including:

•projectmanagementframeworkssuchasPRINCE2™

•governancecommitteesthatmonitorICT-relatedprojectsandoperations

•activebudgetmanagement–comparingactualcosttobudgets

•procurementapproachessuchasmarkettestingandpanelcontracts

•servicedeliveryreportingofoutsourcedarrangements.

Thesemeasureswerealsousedbyagenciesthatdidreportusingquantitativemetrics.Two

agenciesdidnotreportusinganymethodstomanagetheirICTspend.

1.5.4. Future plans to increase efficiency and effectiveness of ICT spend

Inadditiontothoseagenciesalreadyusingtechniquessuchasthefollowing,otheragencies

reportedfutureplanstoincreasetheefficiencyandeffectivenessofICTspendby:

•increasinguseofconsolidation,virtualisationandcentralisationofinfrastructure(sevenagencies)

•markettestingoutsourcedarrangements,infrastructureandsystems(sixagencies)

•improvingfundingandgovernancesystems(fiveagencies)

•refreshinganddeployingupdatedtechnology(fiveagencies)

•adoptingastrongerarchitecturalapproachtoICT(fouragencies)

•implementingrecognisedframeworks,suchasservicemanagementandotherITIL®based

approaches(fouragencies)

•drivinggreatercost-efficienciesinprocurementthroughpartneringwithotherstoobtain

volumediscounts(fouragencies)

•implementingEarnedValuemanagement(twoagencies).


1.6. PROCUREMENT AND ICT OUTSOURCING

Althoughnotexplicitlymentionedintheinvitationtoagenciestomakeasubmissiontothe

review,manyagencieshadpointsofviewonprocurementandICToutsourcingandtheir

relevancetoeffectivenessandefficiency.

1.6.1. $80,000 tender threshold

FiveagenciesdiscussedthedifficultiesarisingfromtheCommonwealthProcurement

GuidelinesrequirementforanopentenderforanyICTacquisitionestimatedtocostmorethan

$80,000.ThisissuewasalsoraisedatameetingoftheChiefInformationOfficerForumwhichI

attended.

1.6.2. Common-use contracts and supplier panel arrangements

Nineagenciessawmeritingreateruseofcommon-usecontractsandsupplierpanel

arrangementsdevelopedbyacentralbodyinareasofgenericneedoruse.Therewas

recognitionthatvolumesourcingarrangementscurrentlyunderdevelopmentcouldservicethis

need.Afewagenciessupportedcommonapproachestobenchmarking.

Twoagenciesstatedthatsuchawhollycentralisedprocurementfunctionislikelytoadda

significantbureaucraticoverheadthatwouldnotbejustifiedbyefficiencies.Fouragencies

saidthatanymovetocentre-ledprocurementmustensurethatagenciesarenothinderedin

achievingtheirspecificbusinessoutcomes.

1.6.3. ICT outsourcing

Agenciesuseamixofinsourcedandoutsourcedarrangements.Someagenciesaremoving

torenewtheiroutsourceddeliveryarrangements,whileothershaveneveroutsourcedand

alwaysretainedaninsourcedICTcapability.Otheragenciesaremovingbackfromoutsourcedto

insourcedarrangements,andothershaveamixofinsourcedandoutsourcedarrangementsbut

notaspartofaclusterarrangement.Thisclusterarrangement,requiredundertheInformation

TechnologyInfrastructureConsolidationandOutsourcingInitiativecommencingin1997,

attractedcriticismfromthreesmalleragencies.Theyfoundthattheirneedsarenotbeing

cateredforasoutsourcedprovidersdedicatemostattentiontotheneedsoflargeragenciesin

thecluster.

Atmeetingswithagencyheads,Iheardthattheoutsourcinginitiativewashandledtoo

directionallybyacentralauthorityandthatthearrangementsadverselyimpactedupon

agencies’abilitytofunctionefficientlyandeffectively.Therewasmuchcriticismoftheinitiative,

withagenciescomplainingofthelong-termimplications.Forexample,oneagencysaidthatit

wasnowmovingfromoutsourcedtoinsourcedservices,withthemaindriverbeingreduced

costs.Anotheragencystatedthatitsexpectationsforservicedeliverywerenotmetbytheir


outsourcedserviceprovider.Concernwasexpressedbyagencyheadsthattheclusteringof

agencieswasrandomandtherewaslittlebusinessalignmentintheclusters.

InDecember2000,areportontheReview of the Whole-of-Government Information

Technology Outsourcing Initiative(theHumphryReport)wasconsideredbytheGovernment.

TheGovernmentagreedwiththerecommendationwhichsawfutureresponsibilityfor

implementingtheoutsourcinginitiativefullydevolvedtoagencyChiefExecutivesorBoards.12

1.7. USE OF BEST PRACTICE

DuringthecourseofthereviewIsoughttodeterminetheextenttowhichAustralian

Governmentagencieswereengagedinbetterpracticeandbestpractice.Exampleswere

soughtfromagencysubmissions,bilateralconsultationsandthroughwiderinvestigations.In

myview,thereareanumberofbetterandbestpracticeexamplesacrossgovernmentwhich

couldbemorewidelyadopted.Whilethereisbroadawarenessofafewwell-knownexamples,

thesetendtobetheexception.Thereisnosystematicmeanstopromulgatebestpractice

morewidelyand,asaresult,thereisonlylimitedawarenessbyotheragenciesofmostofthese

initiatives.Thereisclearlypotentialtoleveragetheseexamplesbypublicisingthemmore

effectively.Anillustrativeselectionofexamplesisincludedbelow.

1.7.1. SmartForms

TheDepartmentofInnovation,Industry,ScienceandResearchhasdevelopedacentreof

excellenceinSmartForms.SmartFormsareaplatformtodeliveradvancedonlineformsand

servicesacrossgovernment.TheyenabletheGovernmenttoprovidemoreinformationand

servicesonlinetothebusinesscommunityandenablecompaniestocompletetheirregulatory

andreportingrequirementsmoreefficiently.Therearecurrentlyover650liveSmartForms

availableonthesite,resultinginsharedforms,templates,infrastructureandknowledge

acrossmultiplegovernmentagencies,includingCentrelinkandFinance,andseveralstate

governments.Thiswhole-of-governmentsolutionhasbeenavailablesinceNovember2005to

governmentagenciesthatownbusiness-relatedforms.

1.7.2. Architecture-based design

Centrelink’ssystemofonlineclaimsandservicesforcustomersprovidesafacilitythrough

whichcustomerscanviewandupdatearangeofpersonaldataovertheinternet.Customers

canaccessinformation,correctinaccurateinformation,lodgeclaimsandmanagetheir

Centrelinkaffairs.Centrelinkisemployinganewserviceorientedarchitecturetomakefunctions

anddatacontainedinitsmainframe-basedlegacyapplicationsavailabletoapplicationsusing

12 Humphry, Richard AO (December 2000), Review of the Whole-of-Government Information Technology Outsourcing Initiative.


webservices.Thisallowsinformationtobecollectedfromcitizenswithlittleornointervention

fromCentrelinkstaff.Onlineservicesarenowbeingdevelopedusingindustrystandard

technology,providinganincreasingopportunitytodeliverservicesthatcrosstraditionalsystem

andagencyboundaries.Centrelinkhasfoundthatre-useofsystemsandfunctionalityis

deliveringcost-efficiencies,reducingdevelopmenttime,andprovidingstandardised,consistent

servicesanduserinterfacestocustomers.Onlineservicesunderdevelopmentwillre-use

existingwebservicestoleveragepreviousinvestmentinICT.

1.7.3. Project maturity assessments

TheDefenceMaterielOrganisationhasimplementedatechniquewhichassessesthematurity

ofprojectsastheyprogressfromconcepttoin-service.Projectsareassessedagainstthecriteria

ofschedule,cost,realisationofrequirement,understandingofthetechnicalsolutionand

arrangementstooperateandsupportthecapability,technicaldifficulty,industryperformance

issues,andoperationsandsupport.

1.7.4. Secure communications

FedLinkisawhole-of-governmentencryptionsystemthatallowsdataclassifiedupto

andincludingPROTECTEDandRESTRICTEDtobetransferredsecurelyamongAustralian

Governmentagenciesacrosstheinternetoranyinsecureinfrastructure.Sinceestablishmentin

2001,FedLinkhasexpandedtoprovideservicesfor98AustralianGovernmentagencies(52%of

allFMAActandCommonwealth Authorities and Companies Act 1997agencies).

TheinitiativeoperatesunderaheadagreementbetweenFinanceandtheFedLinkservice

provider.Individualagencycontractsarebetweentheagencyandtheserviceprovider.FedLink

isimplementedasauser-paysfundingmodelandiscost-efficientincomparisontosimilar

commercialofferings.Overthepast7yearsinoperation,FedLinkhasprovedtobearobustand

effectiveservicewithminimalimpactontheagencyorenduser.

1.7.5. Sourcing strategies

Someagenciesarespecifyingoutcomesratherthantechnicalspecificationsasthebasisof

competitivetendering.TheDepartmentofForeignAffairsandTradestatesthisapproachhas

identifiedthatcommercialoff-the-shelf(COTS)productscanmeettheneedsofthebusiness

withoutbespoking.

SeveralagenciesnominatedspecificinstancesoftheirICTsourcingasbestpractice.These

includeda‘bestofbreed’policy(AustralianElectoralCommission);ahybridsourcingmodel

(DepartmentofInfrastructure,Transport,RegionalDevelopmentandLocalGovernment);

multi-partyarrangements(AustralianCustomsService);andleveragingofcross-portfolio

arrangements(DepartmentofHumanServices).


1.7.6. Collaboration with industry

TheAustralianTaxationOffice(ATO)hasaSoftwareIndustryLiaisonUnitwhichwasestablished

toassisttax-relatedsoftwaredeveloperswithchangesthatcameaboutduringoneof

Australia’smajortaxreforms.TheATOhascontinuedtocollaboratecloselywithsoftware

developerstoimproveandstreamlinetheirinteractionswithATOsystems.Forexample,the

unitmakesavailablealltax-relatedinformationrequiredbysoftwaredeveloperstoreadily

interfacetheirsystemstotheATO.

1.7.7. ICT management frameworks

Asnotedinsection1.3.2,18agenciesareusingITIL®andafurtherfourareplanningto

implementit.Oftheseagencies,eightaresufficientlyconfidentinitsusetonominateitasa

bestpracticeframeworkforpromulgationacrossgovernment.ITIL®practicesarecommonly

implementedinareasofproblemmanagement,incidentmanagement,changemanagement

andconfigurationmanagement.

Likewise,thereare11agenciescurrentlyusingtheITGovernanceInstitute’sCOBIT®asa

managementtool,enablingbenchmarkingandtargetingofmaturitylevels.Fouragencies

suggestedgovernment-wideuseofCOBIT®.

1.7.8. Earned Value management

EarnedValueisasetofbestpracticeprojectmanagementtechniquesthatintegratecost,

scheduleandtechnicalperformance.EarnedValueestablishesobjectivemeasuresoftheactual

workachievedcomparedtotheplanforthatwork.Itrequiresbetterup-frontplanningand

providesanagencyanditscontractorwiththesameperformancedataagainstwhichproject

progresscanbemanagedandreviewed.

TheATOhasrealisedgreatertransparencyofthestatusofitsChangeProgrambyemploying

SimplifiedEarnedValuemethodologyandfixedpricemilestonepaymentsforitscontractfor

serviceswithAccenture.SimplifiedEarnedValueprovidesapaymentmethodwherethedollar

amountclaimedbytheproviderrelatestotheamountofworkperformed.Warranty,stagegate

andrisk-rewardpaymentsremainfixedprice,withspecificpoint-in-timetriggersandmilestone

achievementcriteria.Invoicesarereceivedmonthlyforthepreviousmonth’sworkeffort.

TheDefenceMaterielOrganisationalsousesamixofEarnedValueandprojectmilestonesto

manageprojects.Itusesthetechniqueinlarger,morecomplexprojects(usuallyatleast$20

millionandwithsystemintegrationinvolved).


1.7.9. Knowledge management

TheAustralianBureauofStatistics(ABS)KnowledgeManagementEnvironmentdelivers

ongoinginformationproductivitythroughprovisionofanenablingdesktopITenvironment,

whichfacilitatescollaborationandallowstheinformationproducedtobemanagedas

acorporateasset.Theplatformintegratesportal,collaboration,mail,workflow,offline

capabilities,documentmanagementandrecordkeeping,andsupportstheorganisational

objectives.Thisincludesthecreation,production,publicationanddistributionofinformation,

includingthe‘automated’deliveryofpublicationsandcontenttotheABSwebsite.

1.7.10. Energy efficiency in data centres

TheTreasuryreportedthatithadinvestedinanewdatacentrewithaconsciousefforttoreduce

itscarbonfootprintbyre-usingthecoldairinCanberraforthecentre’scoolingrequirements.

1.7.11. Search

TheAgencySearchServiceallowsagenciestoleveragethewhole-of-governmentsearchservice

providedthroughaustralia.gov.au,toprovideasearchonagencywebsites.Thirty-twoagencies

havefullyimplementedtheuseofthisserviceover57websites.Agenciesusingthesearch

serviceincludetheBureauofMeteorology,MedicareAustralia,theDepartmentofHealthand

Ageing,andFinance.

1.7.12. Successful delivery of technology refresh

Centrelink’sITRefreshprogramhasincreasedtherangeofservicesthatCentrelink’scustomers

arenowabletoaccessonline.AccordingtoanauditbytheANAO13,itsignificantlyadvanced

onlineservicesforprivatesectororganisations,enablingthemtoverifycustomercircumstances

andtoexchangeinformation;reducedtheriskofservicecompromiseorfailureduetothe

ageingofitssystems;andestablishedanEnterpriseDataWarehousethatwillprovidethe

capabilitytosubstantiallyimproveitsmanagementinformation.Overthefiveyearsofthe

Refreshprogram,Centrelinkcommittedtoachievingsavingsinadministeredpayments(such

asbenefitandpensionpayments)of$184million,andsavingsindepartmentalexpensesof

$120.9million.Centrelinkachievedthecommittedbudgetarysavings.

1.7.13. Customer-focused service delivery

TheATOe-taxserviceisafreetaxreturnpreparationsoftwarethatensuresmostrefundsare

issuedin14days.e-taxhelpscitizenspreparetheirincometaxreturnandbabybonusclaim,

andthenlodgeonline.ItalsoletscitizensdownloadtheirMedicarebenefittaxstatement

details.e-taxwasfirstintroducedin1999forthe1998–99financialyear.

13 Audit No. 17, 2007-08, ‘Management of the IT Refresh Program’.


TheABSe-CensusfacilityisatoolthatprovidesallAustralianswitharobust,secureandeasy

alternativetocompletingthepaperCensusform,andmakesiteasierfortheABStocount

peoplelivinginisolatedplaces.Importantly,itisalsoaccessibleforpeoplewithadisabilityasit

usesassistivetechnologies.

1.7.14. Green ICT

TheDepartmentofDefence(Defence)implementedaGreenICTinitiativeinJune2008.By

enforcingautomaticlog-offandthenautomaticshut-downonitsmajorPCfleet,thenumber

ofmachinesleftpoweredonafterhoursfellfrom50,000to3,000.Electricitysavingsfromthis

initiativeareexpectedtoexceed$5millionannually.Theequivalentcutingreenhousegas

emissionsisexpectedtoexceed30,000tonnesannually–theequivalentoftaking7,500cars

offtheroadpermanently.

1.8. VIEWS ON EXISTING WHOLE-OF-GOVERNMENT ARRANGEMENTS

Agencieswereaskedfortheirviewsonexistingwhole-of-governmentarrangementstoguide

theGovernment’suseandmanagementofICT.Severalframeworks,guides,strategiesand

policiesalreadyexistwithinthewhole-of-governmentenvironment,andagencieswereasked

toindicatetheirlevelofuseoftheseframeworks,andanyissuesthatimpededuse.

1.8.1. Current governance mechanisms

Averysmallpoolofagenciescommentedonthecurrentgovernancemechanisms,mainly

agenciesthatareinvolvedintherelevantcommittees.Commentsweremadeonanindividual

agencybasis.

AgenciesreportedthattheSecretaries’CommitteeonICT(SCICT)providesonlylimited

guidance.Oneagencysaidthattheforumstrugglestodelivervalueoncollaborationandis

strugglingtodetermineitslevelofinteractionwithagencies.TheagencysaidthattheSCICT

hasnoauthoritytobecriticalandfailedtoaffectdecisionscomingoutoftheBudgetprocess.

OneoftheSCICTmemberssaidthattheyexpectedthattheforumwouldsharelearnings,but

thisdidnothappen.Instead,theforumactedasa‘sandtrap’,slowingdowninitiativesfrom

agencies.PM&CsaidthattheGovernmentneedstoreviewtheSCICT’stermsofreferenceand

modusoperandi.OneagencysuggestedthattheSCICTcouldprovidevaluebyprovidingaline

ofsightforwhole-of-governmentprogramstopoliticians.

Agenciesreportedthatotherforums,suchastheCIOCommitteeandtheBusinessProcess

TransformationCommittee,areusefulforsharingideas,althoughoneagencycommentedthat

thesecommitteestendtoshareissuesratherthansolvethem.


1.8.2. Views on the Australian Government Information Management Office

Commentswereofferedbyagenciesonanindividualbasis.

Oneagencynotedthat,whiletheaspirationbehindtheAustralianGovernmentInformation

ManagementOffice(AGIMO)wasgood,AGIMOhasbeenaroundforsometimeandthereis

stillnoevidentreturnoninvestment.AnotheragencynotedthatAGIMOhasnoauthorityover

agenciesandthatthiswasasignificantissue.OneagencynotedthatAGIMO’srolemightbe

betterplacedinanotherpartofgovernment,suchaswithinthePM&CCabinetImplementation

Unit,asitsrolewithinFinancewasproblematicbecauseFinance’sroleistoreduceexpenditure.

AgenciesfeltthatAGIMOdoeshavearoletoplayintermsofleadingandfacilitatingworkon

architecture,frameworksandstandards.Therewassupportforexistingcentralframeworks,

standards,bestpracticeguidesandservicessuchas:

•AustralianGovernmentArchitecture(7agencies)

•AustralianGovernmente-AuthenticationFramework(7agencies)

•AustralianGovernmentTelecommunicationsArrangements(6agencies)

•AustralianGovernmentTechnicalInteroperabilityFramework(5agencies)

•Betterpracticeguides(5agencies)

•BlackBerryguidance(5agencies)

•e-Governmentstrategy(5agencies)

•Fedlink(5agencies).

1.8.3. Barriers to adoption

Agencieswereaskedwhytheydidnotadoptwhole-of-governmentpolicies.

Sevenagencies,indifferentways,expressedaviewthatagenciesneededtoremain

autonomousduetoeithertheuniquerequirementsoftheirbusiness,orbecausetheycould

driveabetterpricingdealasasingleentity.

Fouragencieshighlightedthelackofcommonstandardsandacommonlanguageasinhibiting

whole-of-governmentapproaches.

AnotherfouragenciesobservedthatitisdifficulttodeployAGIMOframeworksandguidanceas

theGovernmentdoesnotprovideanyextrafundingtoenableagenciestoadoptthesepolicies.


1.8.4. Future coordination

Nineagenciesstatedthattheysawvalueinsomeformofstrongcentralleadershipand

authoritytocoordinatewhole-of-governmentarrangementsincertainareas,forexample,

architectureandbusinessprocessdesign.Fiveagenciesnotedthatanyframeworksand

guidanceintroducedundersucharrangementswouldneedtobebackedbyastrongbusiness

case,oropt-inprovisions.

SevenagenciesexpressedconcernoveranytrendtocentraliseICTdecisionmakingthat

couldnotaccommodateuniquerequirementsofin-houseandcollaborativeapplications

development,duetothehighlyspecialisednatureofagencypurchases.Theseagenciesfeltthat

thepossibleimpositionofawhole-of-governmentinitiativecouldaffectanagency’sabilityto

operateefficientlyandeffectively.

1.9. VIEWS ON DATA CENTRES

Duringanumberofagencybilateralmeetings,theissueofinadequatecurrentdatacentre

arrangementsarose.Keypointsraisedincluded:

•Age.WithfewexceptionsCanberra’sexistingdatacentrefacilitiesareageingandexperience

difficultymeetingtherequirementsofcurrenttechnologyand/oravailabilitydemands.There

areexamplesofdatacentreswithintheACTthatarehostedbyprivateorganisationsthat

havehadlittleinvestmenttoaccommodatechangingtechnologydemands.

•Power.AgenciesraisedconcernsoverCanberra’srelianceonasinglepowergrid.14

Asubsequentsurveywasundertakenwiththe16largestagencies(excludingDefence)tohelp

informandquantifythemagnitudeofthedatacentreissue.Table1.3containsahighlevel

summaryoffindings.Inaddition,12oftheagenciesidentifiedhavingmorethanoneoftheir

datacentresintheACT.

14 There are two feeds from New South Wales to the single ACT electricity grid. One feed provides 85% of electricity to the ACT and the other 15%. The smaller 15% feed is only to the immediate Fyshwick area and is insufficient to support agency needs. Agencies with data centres in Canberra are therefore susceptible to the single ACT power feed.

Chapter One:ViewsfromwithintheAustralianGovernment�0



Seven agencies expressed concern over any trend to centralise ICT decision making thatcould not accommodate unique requirements of in house and collaborative applicationsdevelopment, due to the highly specialised nature of agency purchases. These agencies feltthat the possible imposition of a whole of government initiative could affect an agency’sability to operate efficiently and effectively.

1.9. VIEWS ON DATA CENTRES

During a number of agency bilateral meetings, the issue of inadequate current data centrearrangements arose. Key points raised included:

• Age. With few exceptions Canberra's existing data centre facilities are ageing andexperience difficulty meeting the requirements of current technology and/or availabilitydemands. There are examples of data centres within the ACT that are hosted by privateorganisations that have had little investment to accommodate changing technologydemands.

• Power. Agencies raised concerns over Canberra’s reliance on a single power grid.14

A subsequent survey was undertaken with the 16 largest agencies (excluding Defence) tohelp inform and quantify the magnitude of the data centre issue. Table 1.3 contains a highlevel summary of findings. In addition, 12 of the agencies identified having more than one oftheir data centres in the ACT.

Table 1.3 – Summary of data centre locations of the 16 largest agencies (excluding Defence) Agency self managed facility within ACT 14

Shared facility within ACT 17

Total data centres located in ACT 31

Agency self managed facility outside of the ACT 8 (7 of these belong to the ABS)

Shared facility outside of ACT 6

Total data centres outside of ACT 14

Total data centres 45

This survey also identified the following:

• Capacity. Excluding remote sites, the total identified capacity for agency data centres is10,484 m². The total identified unused capacity is 1,815 m². Within the ACT the totalidentified capacity is 8,316 m² with an unused capacity of 1,463 m² (17.6%). However,18 data centres within the ACT have identified as having 10 m² or less available capacity.Where the agency is not in an existing shared facility any unused capacity is nottransferable to another agency for use.

14 There are two feeds from New South Wales to the single ACT electricity grid. One feed provides 85% of electricity to theACT and the other 15%. The smaller 15% feed is only to the immediate Fyshwick area and is insufficient to support agencyneeds. Agencies with data centres in Canberra are therefore susceptible to the single ACT power feed.

Thissurveyalsoidentifiedthefollowing:

•Capacity.Excludingremotesites,thetotalidentifiedcapacityforagencydatacentresis

10,484m².Thetotalidentifiedunusedcapacityis1,815m².WithintheACTthetotalidentified

capacityis8,316m²withanunusedcapacityof1,463m²(17.6%).However,18datacentreswithin

theACThaveidentifiedashaving10m²orlessavailablecapacity.Wheretheagencyisnotinan

existingsharedfacilityanyunusedcapacityisnottransferabletoanotheragencyforuse.

•Availability.UsingtheTierClassificationSystemoftheUptimeInstitute15fordatacentre

availability,16oftheidentifieddatacentresarebelowthetierlevelidentifiedbyagenciesthat

meetstheircurrentminimumavailabilityrequirements.

1.10. VIEWS ON THE ICT INDUSTRY

Duringthebilateralmeetings,anumberofagenciesexpressedconcernsabouttheICTindustry

basedontheirexperiences.Theseincluded:

•thatindustryrepeatedlyover-promisesintendersandunder-deliversinpractice

•industrydoesnotpracticewhatitsuggeststhatagenciesshoulddo

•thatthequalityofresourcesinimplementationdoesnotmatchthequalitypromisedduring

tenderingandcontractnegotiations.

1.11. ICT ARRANGEMENTS IN MINISTERIAL OFFICES

Duringthecourseofthereview,Iwasmadeawareofanissueaffectinginteroperabilityof

ICTsystemswithinministerialofficesatParliamentHouse,Canberra.Thisissueservesas

areminderoftheimportanceofinteroperability,commonsystems,andtheproblemsthat

canresultfromanautonomousapproachtoICTsystems.TheissueisoutsidetheTerms

ofReferenceformyreview,buttheconcernswerepassedontoFinance,whichhassome

responsibilityforprovidingservicestoMinisters.

15 See http://uptimeinstitute.org/wp_pdf/(TUI3026E)TierClassificationsDefineSiteInfrastructure.pdf

Table 1.3 – Summary of data centre locations of the 16 largest agencies (excluding Defence)

Chapter Two:ViewsfromoutsidetheAustralianGovernment ��

chaPteR �: views fRom outside the austRalian goveRnmentThischaptersummarisesthekeythemesraisedbythoseoutsidetheAustralianGovernment

(theGovernment)andrepresentstheviewsof:

•ICTcompanies

•ICTindustryassociations(includingtheAustralianInformationIndustryAssociation(AIIA),

AustralianIndustryGroup,andOpenSourceIndustryAustralia)

•consultingfirmsworkingintheICTindustry

•individualsworkingintheICTindustry

•ICTrecruitmentfirms

•oneprofessionalbody

•onetradeunion

•oneacademicinstitution

•onestategovernment.

Atotalof72submissionswereanalysed,with51ofthesehavingbeendirectlyinvitedto

provideasubmissiontothereview(seeAppendixD).Thischapteralsotakesintoaccountviews

raisedduringbilateralmeetingsandroundtablediscussionswithvariousexternalstakeholders

andstategovernmentCIOs(seeAppendixE).

2.1. BETTER UTILISATION OF ICT ASSETS

TherewasageneralviewacrossindustrythatthereisagreatdealofduplicationofICTsystems,

applicationsandinfrastructurewithintheGovernment,stemmingfromthedecentralised

andindependentwayagencieshaveinvestedinICT.Manysubmissions(29)commented

onsignificantopportunitiesfortheGovernmenttorealiseefficienciesbyrationalising,

standardising,consolidatingandsharingorre-usingcurrentassets.Inparticular,thefollowing

areaswerehighlighted.

2.1.1. Bandwidth and network infrastructure

Fourteensubmissionsindicatedthataggregatingandsharingnetworkconnectionsand

gatewayscouldachievesignificantsavings.OnecompanypointedoutthattheGovernment

oftenhas20–30datanetworkconnectionsperregionalcityortownacrossAustralia,witheach

agencyimplementingadedicatedconnectionto/fromCanberra.

Chapter Two:ViewsfromoutsidetheAustralianGovernment��

Afew(4)alsofeltthatthephysicalfibrethatmakesuptheIntraGovernmentCommunications

Network(ICON)issignificantlyunder-used.Itcouldprovideafoundationforestablishinga

sharednetworkedserviceinfrastructureforarangeofsharedservices,aswellasdeliveringan

evenbroaderrangeoftelecommunicationsservicesmorecost-effectively.

2.1.2. Data centres

Industrybelievedthatgrowthintechnologydemandischallengingthephysicalconstraints

ondatacentresglobally,andtheGovernmentisnoexception.Industrybodiespointedtothe

followingfactorsashavinganimpactonthecurrentdatacentrefacilitiesofagencies:

•Servergrowth.Gartner16estimatesthatthecurrentglobalcompoundannualgrowthrate

ofserversis12%,butoneindustrybodyhasidentifiedittobeashighas18%forsome

governmentdatacentres.Thiscontributessignificantlytodemandondatacentrefloorspace.

•Datacentrefloorspace.Despitemajoradvancesinconsolidationandservervirtualisation

technology,Gartner17estimatesthatthedemandfordatacentrefloorspaceisforecastto

bearound5–10%ayear.Withmanydatacentreseitheratornearcapacity,thisposesa

significantissueformanyagencies.

•Heating,ventilationandair-conditioning(HVAC).Datacentresrequirestablethermal

conditions.Thecurrentgrowthinpowerdensityduetochangingservertechnologyis

projectedbyGartner18tobe3.5KW/m2overthenext5years.MostgovernmentHVAC

systemsprovidepressurisedairviaafalsefloortothebaseofaserverrack,andthepractical

limitationofsuchasystemis1KW/m2.Thisdiscrepancywillseeanincreaseinthermal

‘hotspots’,andaconsequentneedtoimproveHVACdesignandimplementation.

•Growthindemandforpower.Asampleofdatacentrepowerdemandforoneagencyshows

thatdemandforpowerinitsdatacentrehasgrownby30%compoundannualgrowthrate

overthepast5years(from230KiloVolt-Ampsto850KiloVolt-Amps).

•Efficiency.UsingtheUptimeInstitute’sdatacentrecostmodellingtool,datacentreeconomy

improvessignificantlybetween500m2and1,000m2.(Note:Ofthe45datacentresreferred

toinsection1.9,onlyfourexceed500m2).

•Weightandfloorloading.Currently,typicalgovernmentdatacentrefloorloadingcapability

isabout450kilogramsperrack.Theweightofnewservertechnologypopulatingtheseracks

hasincreasedfrom380kilogramsperracktoover1,000kilogramsperrackoverthepast

5years.Asaresult,racksarenotbeingfullyutilisedandthereisarequirementforimproved

designandimplementationinordertoimprovefloorspaceutilisation,providedHVAC

limitationscanalsobeovercome.

16 Gartner (August 2006), ‘A message from data centre managers to CIOs: Floor space, power, and cooling will limit our growth’.

17 Ibid.

18 Gartner (September 2007), ‘U.S. data centers: The calm before the storm’.


•Oneindustrybodyidentifiedthatdatastoragedemandisgrowingbyasmuchas60%per

annum.ThisgrowthimpactsonHVAC,floorspace,powerdemandandICTstaffnumbers.

•GreenICT.DatacentresarecontributingsignificantlytotheGovernment’scarbonfootprint.

AccordingtotheUptimeInstitute,datacentresaccountfor0.5%oftotalworldwideenergy

consumption,andenergyconsumptionofdatacentreshasdoubledbetween2000and2008.

Intheabsenceofanoverarchingwhole-of-governmentviewondatacentres,agenciestendto

provideorsourcetheirfacilitiesautonomously.Thisleadstounnecessaryduplicationacross

governmentofnotonlydatacentrefacilities,butduplicationindatacentreoperations,forexample,

specialisedsupportstaffandprocesses.Fourteensubmissionsindicatedthatconsolidatingagency

datacentrefacilitieshasthepotentialtorealisesignificantsavingsfortheGovernment.

2.1.2.1. Capacity management

Thereview’sattentionwasdrawntoanalysts’reportsquotingaveragecapacityutilisationof

serversacrosstheindustryasbeingbetween15%and20%duringworkinghours.19Somefelt

thatbettercapacitymanagementwouldprovideaccesstocurrentuntappedorunder-utilised

resources.Inaddition,atechniqueknownasservervirtualisationcouldmakebetteruseof

existingprocessingcapacitywithinandacrossagencies.

2.1.2.2. Storage

Industrycommentedthatwithdataandinformationcontinuingtoexpandexponentiallydue

totheincreasingprevalenceofdigitalcontentandthepervasivenessoflegislativecompliance

requirementspertainingtodata,eachagencyfacesincreasingstoragerequirements.

Consolidatingstorageintolargerepositorieswoulddrivecheaperpermegabytestoragecosts.20

Inaddition,consolidationwouldenablethedeliveryofdifferentiatedhigh,mediumandlow

availabilitystorageservicesbasedonneed.

2.1.3. Consolidation/integration of service delivery channels

TwelvesubmissionscommentedontheopportunityfortheGovernmenttoenhanceservice

deliverythroughintegrationandcollaborationacrossagencies,particularlythroughsingleentry

pointsforgovernmentinformationandservices.Reducingthenumberofcustomer-facing

governmentportalswouldprovidegovernmentcustomers,citizensandbusinesseswitha

singledoortoaccessthemajorityofgovernmentservicesandreducethecostofmaintaining

multipleentrypoints.Afewsubmissionsalsomentionedthebettersharingofotherservice

deliverychannels,suchasface-to-faceandtelephone.

19 Adrian Johnson (June 2007), ‘Capacity utilisation - Asking the questions’, MeasureIT Issue 5.06, http://www.cmg.org/measureit/issues/mit42/m_42_5.html

20 Technically, it is possible to consolidate storage without actually consolidating data.


2.1.4. Business systems and applications

Somesubmissions(10)feltthatopportunitiescouldbegainedfromstandardisingand

rationalisingthemyriadofbusinesssystemsandapplicationsagenciescurrentlyuse,

particularlywithaviewtobettersharingandre-useamongagencies.Relatedtothis,four

submissionscommentedonopportunitiesfromrationalisingsoftwarelicences.

Thestategovernment’ssubmissionidentifiedthatithasalreadyseentheeffectsof

rationalisationinitsdevelopmentenvironments.Inits2005–06baseline,50%ofitsagencies

requiredatleastfourdifferentapplicationdevelopmentskillsets,whichraisestrainingcosts

andskillsmanagementoverheads,aswellasknowledgemanagementrisk.Thisfigurewas

reducedto29%in2006–07,accordingtoitsbaselinereporting.

2.1.5. Infrastructure

Somesubmissions(8)alsofeltthatthereareopportunitiestorationalise,consolidateandshare

ICTinfrastructure(suchascallcentres),particularlyforsmalleragencies,notingthatsome

poolingandconsolidationofrequirementswouldberequired.

OnecompanysurmisedthattheGovernmentcouldsaveupto$100millionbyoptimisingits

infrastructurealone.

2.2. SHARED SERVICES

Manysubmissions(29)consideredthatrationalising,standardisingandaggregatingbusiness

systemsandapplicationsalsoenablesamovetosharedservicesacrossagencies.Bywayof

comparison,11submissionsindicatedthatothergovernments(bothstateandinternational)

haveprogressedfurtherinthisarea.TheymentionedtheactivitiesoftheVictorianand

QueenslandGovernments,andtheUSandUKGovernments,andsuggestedthatthe

Governmentexploreandlearnfromtheirexperiences.

Thetopcandidatessuggestedbyindustryforsharedservicesincluded:

•financialandhumanresourcesmanagementandpayroll(20mentions)

•procurement,purchasingandcontracting(10mentions)

•document/recordsmanagement(eightmentions)

•paymentprocessing(sixmentions)

•securityandauthentication(fivementions)

•identityandaccessmanagement(fivementions)

•grantsmanagement(fivementions).


Whileindustrywasgenerallyoptimisticaboutthepotentialofsharedservices,theyalso

notedthatsharedservicesandsystemsinevitablyinvolveadegreeofcompromisethatcan

exposethedifferentbusinessexpectationsofcustomers.Thissentimentwasechoedinthe

meetingsIheldwithstategovernmentCIOs.Whiletheyacknowledgedthepotentialbenefits

ofsharedservices,theycommentedonthesignificantchallengesandrisksassociatedwith

implementation,andcounselledconsiderablecautioninthisarea.

2.3. STANDARDISED/COORDINATED APPROACH TO PROCUREMENT

Manysubmissions(32)mentionedthattheGovernmentcouldobtainsignificantefficienciesby

adoptingastandardisedorcoordinatedapproachtoprocurement.Therearecurrentlymultiple

tendersforthesameproductorservice(whichiscostlyforboththeGovernmentandindustry)

andagenciesarebuyingtheseproductsorservicesatdifferentprices.Somesubmissions(17)

wentontosaythattheGovernmentisnotmakingthebestuseofitscollectivepurchasing

power(particularlyinpurchasingcommodityproducts).Atthesametime,itisincurringhigh

administrativecostsbyhavingmultipleprocurementactivitiesacrossagencies.Thisincludes

expenditureonexternalconsultants,probityadvisers,legaladvisersandinternalresources.

However,11submissionscommentedontheneedtobemindfuloftheimpactofanysuch

standardisedorcoordinatedprocurementactivitiesorinitiativesoncompetition,especiallyon

smallerplayers.Onecommentedthatsmallandmediumenterprises(SMEs)inparticular,tend

tobesqueezedoutinconsolidationprograms,robbingtheGovernmentoftheinnovations

offeredbysmallersuppliers.AnotherreferredtoresearchindicatingthatSMEsgainedaround

22.5%ofworkbycontractvaluein2004–05,while60.3%wenttomultinationals.21Ninealso

commentedontheneedtoconsiderpastattemptsataggregation(forexample,clustering)and

tocarefullyanalysethecostsandbenefitsbeforeproceeding.

2.4. USE OF COMMERCIAL OFF-THE-SHELF SOLUTIONS

Manysubmissions(24)indicatedthattherearenospecificinhibitorstousingcommercial

off-the-shelf(COTS)solutionswithoutcustomisation,with10mentioningthatthereisoften

unnecessaryexcessivecustomisationbyagencies.Thiserodestheinherentbenefitsofferedby

commercialoff-the-shelfproducts,andincreasescosts.

Somesubmissions(13)believedthatmorerobustdefinitionandconsiderationofrequirements,

andadoptingserviceorientedarchitecture(SOA)andopenstandards,wouldincreasethe

appealofCOTSsolutions.

21 Intermedium (2005), ‘SME participation in Australian Government ICT procurement 2003–04 & 2004–05’, Report for the Department of Communications, Information Technology and the Arts, http://archive.dcita.gov.au/__data/assets/pdf_file/0005/56930/Intermedium_Final_Report_03-05.pdf


2.5. NEED FOR STANDARDISATION

FourteensubmissionsindicatedtheneedtohavestandardarchitecturesbyadoptingSOA

andtheAustralianGovernmentArchitecture.Theybelievedthatifagencyapplicationswere

developedonthebasisofbuildingservices(andcomponentsofservices)thatwereasgeneric

aspossible,opportunitiesforre-usebymultipleagencieswouldincreasesignificantly.Re-using

applicationswoulddecreasetheinvestmentneededtodevelopnewapplications,andthus

reducethetimetakentodeliverimprovedservicestothecommunity.

Tensubmissionsindicatedthatmuchcanbegainedfromstandardisingbusinessprocesses

acrossagencieswhereverpossible,witheightsuggestingthatagenciesshouldadoptthe

AustralianGovernmentBusinessProcessInteroperabilityFramework.Theybelievedthatthe

framework,ifimplementedacrossallagencies,wouldresultinstandardisationandreduced

costsforagencies,aswellasreducedtenderingcostsforsuppliers.

Seventeensubmissionshighlightedtheneedforwhole-of-governmentcommonandopen

datastandardstofacilitatesharingandcollaborationamongagencies,andtoimproveservice

deliveryinnovationbyremovingtechnologyandvendordependency.

2.6. WHOLE-OF-GOVERNMENT GOVERNANCE

Nineteensubmissionsindicatedthatthereisaroleforacentralbodyto:

•setandensureconsistentandeffectiveapplicationofICTpolicies,guidelinesandbest

practicesthroughaneffectivecomplianceregime

•set,coordinateandmonitorwhole-of-governmentICTstrategyandinvestments.

FourteensubmissionsindicatedthattheGovernmentdoesnotmeasurebenefitswell,

particularlyatthewhole-of-governmentlevel.Theybelievedthatthereisnoconsistentand

rigorousapproachtoestablishing,measuringandreviewingbenefits,whichmakesitdifficult

tosupportgeneralstatementsonthebenefitsofICTtogovernmentoperations.Toimprovethis,

12submissionssuggestedthattheGovernmentwouldbenefitfromcentrallycoordinatingICT

investmentsthroughportfoliomanagementmethodologies,coupledwithstrongperformance

measurementandtrackingofbenefits.Thisincludedexploringpotentialgovernancestructures

formulti-agencydevelopments,aswellascollectingandmonitoringdataonICTinvestments.

Cross-agencyportfoliomanagementcouldidentifyprojectswithahighpotentialtotransform

governmentservices,improvealignmentandintegrationacrossgovernment,andreduce

duplication.OnesubmissionreferredtoresearchwhichshowedthatgoodICTgovernanceis

associatedwitha20%higherreturnonassets.22

22 Weill P & Ross JW (2004), IT governance, Harvard Business School Press, Boston, p. 269.


Somesubmissions(four)alsocommentedontheobservationthatthereareanumberofprivate

sectororganisationsthatareleapingaheadinmanagingICTatanenterpriseleveltoimprove

competitiveness.Theysaidthatwithinthegovernmentcontext,thecentrehasalimitedabilityto

influenceorguideaprogramoncefundinghasbeenapprovedunlessanagencyrequestsextra

funds.Incontrast,privatesectororganisationstendtousemore‘activistcentre’approaches.

WhileninesubmissionscommentedpositivelyonGatewayReviews,theybelievedthereis

stillroomforimprovement.Forexample,theGatewayprocesscouldbeimplementedmore

rigorously(forexample,bymakingGate0compulsory)andlessonslearntfromICTsuccesses

andfailurescouldbesharedmoreeffectively.

Fifteensubmissionsalsomentionedtheneedtofocusonimprovingprojectmanagement

disciplines(particularlybenefitsrealisation),governanceandfundingmechanismsoflargeICT

investments.Somewentontosaythatprojectmanagementshouldbeaformallyrecognised

disciplineingovernmentandthatthereshouldbebetterexecutive-levelcommitmentto,and

improvedrecognitionof,formalprojectmanagementtrainingandaccreditation.

However,12submissionscommentedontheneedtoconcurrentlyreviewandrevisestructures,

mechanismsandincentivestoimprovecollaborationbetweenagencies.Theybelievedthat

thecurrentChiefExecutiveOfficer(CEO)accountabilitiesandinterpretationsoftheFinancial

Management and Accountability Act 1997(FMAAct)donotencouragecross-agencyinitiatives.

Also,becauseagencyCIOsareaccountabletotheirCEO,theGovernmentgenerallydoesnot

havetheauthoritytointerveneinagencyICTdecisions.Insupportofthisobservation,eight

submissionscommentedthatothergovernments(bothstateandinternational)weremore

advancedintermsofinter-agencycollaboration.Asastartingpoint,sixsuggestedcreatinga

centraliseddatabaseofagencies’ICTsystems,hardware,software,capacityandcapabilities.

Thiswouldallowagenciestounderstandandlookforsimilaritiesandduplicationand

determineopportunitiesforsharingorre-use,andconsolidation.

2.7. HIGH COSTS OF TENDERING

Therewasageneralviewthatindustryfindstheprivatesectoreasiertodobusinesswith.

SixteensubmissionsindicatedthatcostsoftenderingtotheGovernmentaretoohigh,and

10indicatedthatdecisionmakingintermsofdefiningbusinessneeds,evaluatingtechnology

solutions,procuringatechnologyandfinalisingcontractsistooslow.

Fourteensubmissionsindicatedthatcontractualtermsandconditionsareoftenoverlyonerous

oruncommercial,andsoughtstandardcontractswithreasonabletermsandconditions.While

theGovernmenthas,inprinciple,adoptedfairandacceptablepoliciesonliability,insuranceand

intellectualproperty(IP),implementationhasbeeninconsistent.Manytenderscontainonerous

clauses,resultinginno-bidsandrestrictingthesolutionsavailabletotheGovernment.For

example,unlimitedliability,orcapsonliabilityaresetsohighastobeessentiallythesameas

unlimitedliability.Industryalsonotedinsuranceclausesthathaveveryhighinsuredamounts


(especiallyprofessionalindemnityinsurance).Thelimitsoftenexceedthelikelylossesthatcould

beincurredand,inmanycases,arejustnotavailableintheAustralianinsurancemarketplace.

Theyalsosaidthatagenciesoftenrequireownershipofintellectualpropertyasthedefault

positionwhentheypurchaseICTgoodsandservices.SincemanydonotexploittheIP,the

futurevalueitmighthavegeneratedfortheAustralianICTsectorandwidereconomyislost.

Twelvesubmissionsthoughtthatagenciesareoftentoofocusedonspecificationsorinputs

ratherthanoutcomes.Whereastheprivatesectorfocusesmoreontheoutcomestobe

achievedratherthantheprocessestobefollowed,theGovernmentfocusesoverlyonprocess,

addingsignificantlytoprojectcosts,attheexpenseofensuringprojectoutcomes.Agencies

arealsooftentooprescriptiveintheirspecifications.Onlyonesubmissionprovidedlimited

quantitativecomparativedatawhichindicatedthattheGovernmentissimilartotheUSandUK

Governmentsintermsofbidcostsasapercentageoftotalcontractvalueforlargetenders.The

privatesectortendstoprovidegreaterflexibilityindesigningsolutionsthatencouragegreater

innovationfromvendors.Furthermore,theGovernmentoftenselectsthetenderwiththe

cheapestminimumcomplianceoffer,thusnotachievingtruevalueformoney.

SupplementaryevidencesoughtfromtheAIIAsupportedtheseviews.Basedonasurveyit

conductedwith66membercompanies(around79%ofwhichhadannualAustralianrevenue

oflessthan$15million),about40%indicatedthattheyhavedecidednottoparticipateinthe

Governmentmarket.Inaddition,mostofthosewhodoparticipateregularlydeclinetobidfor

individualtenders.Themainreasonsgivenfornon-responsewere:

•costandcomplexityofthetenderingprocess

•punitivetermsandconditions

•poorlydefinedoutcomesandrisks.

Thesepointswereconfirmedinasubsequentroundtablemeetingthereviewheldwith

nineSMEs.ThismeetingalsoidentifiedsomedifficultiesSMEshadexperiencedwithlarge

primecontractors.

Elevensubmissionswantedearlierandmoreongoingconsultationwithindustrythroughout

theprocurementprocess.Theybelievedthatmanyagenciesarereluctanttoenterinto

meaningfuldiscussionwithpotentialtenderersbeforereleasingrequestsfortender,citing

probityissues.Thisaffectsthequalityofthedecisionmadeandfavourstheincumbent.They

alsobelievedthattheconceptofpartneringisbetterunderstoodandpractisedintheprivate

sector,avoidingthe‘usandthem’attitudesthatcommonlyarisewithgovernmentcontracts.


2.8. THE AUSTRALIAN GOVERNMENT COMPARED TO OTHER GOVERNMENTS

WhileindustrywasaskedtocommentonhowtheAustralianGovernmentcomparedtotheirother

governmentclientsingeneral,apartfromprocurement,norecurringthemeswereidentified.

2.9. SKILLS SHORTAGE

Fourteensubmissionsbelievedthatthecurrentskillsandresourcesshortageswillcontinue

tobeachallengeforallorganisations,notonlytheGovernment,asbabyboomersretireand

thenumberofICTgraduatesdeclines.ThisemphasisestheneedfortheGovernmenttoplan

forfutureskillsrequirementsandpotentialskillsgaps.Theybelievedthatthereisastrong

casefortheGovernmenttoimproveitshumanresourcesplanningandcoordinationofitsICT

workforce,bothfromacapabilityandcapacityperspective.Forexample,itcouldmakemore

effectiveuseandsharingofstaffwithhigh-demandskills.Insupportofthisobservation,nine

submissionsmentionedthatthedecentralisedagency-by-agencymanagementofICTprojects

meansthatagenciesarecompetingforstaff,whichinflatescontractorrates.

AfewsubmissionscommentedthatthestressonthelabourpoolhasledtheGovernmentto

relyheavilyoncontractorsfortheirICTskills,particularlyinCanberra.Anothercommentedthat

manyagenciesareusingcontractorsto‘top-up’permanentstafftoaddressworkloads,withthe

contractorseffectivelybecomingpermanentstaff.Further,industryassertedthatapproximately

20%ofstaffinmanyagencieshavebeenconvertedfromfull-timepermanentstomorehighly

paidcontractors.Theresultisthatwhencontractorsmoveon,sotoodoestheirknowledge

andskillbase.Otherdifficultiesincludeprobityconcerns,lackofsuccessionplanning,variable

quality,andworkersoperatingoutsidetheperformancemanagementsystem.

Toaddresstheseissues,14submissionssuggestedthatICTprofessionalsneedtobevalued

more.Thiscanbeachievedbyimplementingawhole-of-governmentprofessionaldevelopment

programencompassingcareerdevelopment,pathwaystoprofessionalaccreditation,retraining,

recruitmentandretentionstrategies.

Chapter Two:ViewsfromoutsidetheAustralianGovernment�0

2.10. GREEN ICT 23

Somesubmissions(eight)believedthattheGovernmentshouldleadbyexampleandmore

activelyconsiderenvironmentalfactorsaspartoftheirICTpurchasing.Thisnotonlyachieves

costsavings(forexample,throughreducedpowerandcoolingcostsofmoreenergy-efficient

products)butsupportsthegreenagenda.In2008theUSGovernmentimplementedablanket

requirementtoprocureonlyElectronicProductEnvironmentalAssessmentTool(EPEAT™)24

registereddesktopcomputers,laptopsandmonitors.TheUSEnvironmentalProtection

Agency,usingconservativeassumptions,estimatesthatthegovernment’spurchaseofEPEAT™

registeredcomputersovera4-yeartimeframewill:

•saveUS$71.4millioninenergycosts

•reduceenergyuseby824gigawatthours,enoughtopower72,630householdsforayear

•reducegreenhousegasemissionsby64,700metrictonsofcarbonequivalent,whichisequal

toremoving51,317carsfromtheroadforayear.25

Thesesubmissionsrecommendedthatasetofenvironmentalcriteriabeestablishedfor

AustralianGovernmentICTpurchases,andthatitbemademandatoryforgovernment

purchasingofficerstousethecriteriawhenevaluatingtenders.

OthergreeninitiativesthatindustryconsideredtheGovernmentcouldadoptinclude:

•purchasingproductswithahighENERGYSTAR®26andEPEAT™rating

•usingenergycalculatorstocomparepotentialsavings

•enablingpowermanagementsettingsacrossclientPCsystems

•implementingvirtualisationandconsolidationtechnologiestomaximiseresources

•adoptingmobilecomputingplatformsandworkpractices

•adoptingcentraliseddeliverymodelsforapplications,operatingsystemsanddata.

23 Note that industry tended to use the terms ‘green’ and ‘sustainable’ interchangeably, however, the prevailing terminology in the industry is ‘green ICT’.

24 EPEAT™ is a system to help purchasers in the public and private sectors evaluate, compare and select desktop computers, notebooks and monitors based on their environmental attributes. EPEAT™ also provides a clear and consistent set of performance criteria for the design of products, and provides an opportunity for manufacturers to secure market recognition for efforts to reduce the environmental impact of their products.

25 See http://www.epeat.net/Docs/White%20House%20Thanks%20EPEAT%20Mfgrs%20(3-21-07).pdf

26 ENERGY STAR® is an international standard for energy-efficient electronic equipment. It was created by the US Environmental Protection Agency in 1992 and has now been adopted by several countries around the world, including Australia.


2.11. SECURITY CLEARANCES

Fivesubmissionscommentedthatthereisnoconsistentandstandardisedwhole-of-

governmentapproachtotheimplementationofpolicies,proceduresandprocessesin

managingsecurityclearances.Thishasresultedineachagencyestablishingitsownapproach

underthebroadAustralianGovernmentguidelines.Often,securityclearancesissuedbyone

agencyarenotacceptedbyanotherandclearancescannotbetransferred.Theybelievedthat

theimplicationsareverysignificantforcompaniessupportingdifferentgovernmentagencies,

includingcost,staffwaitingtimeinre-clearingfornewagencies,andreducedproductivity.They

alsoconsideredthattheabilitytouniformlymanagesecurityandidentitymanagementacross

governmentagencieswouldsimplifyandprovidesignificantsavingsinadministration.

2.12. BEST PRACTICES

2.12.1. Coordinated management and procurement

AfewsubmissionsfeltthattheGovernmentcouldbenefitfromusingbestpracticesadoptedby

theUKOfficeofGovernmentCommerce(OGC).Aspartofaninitiativetoimprovestandardsand

procurementcapabilityacrossthecentralgovernment,OGCdividespurchasingspecialistsby

productline.Ithasalsosetupaseparatewebsite(http://www.ogcbuyingsolutions.gov.uk/)

whichprovidesgovernmentwithacentralcatalogueofnationallyapprovedproductsand

servicesthatmeetgovernmentprocurementguidelines.Bypurchasinghardwareproducts

withacommonsetofspecificationsacrossgovernment(asopposedtoacrossagency),theUK

Governmenthasbeenabletosaveupto47%onPCs,laptopsandmonitors.27

AfewsubmissionsalsofeltthattheGovernmentcouldbenefitbyadoptingacquisitionreforms

thathavebeenimplementedintheUS.Thesehaveresultedinsubstantialsavingswhere

softwarelicencesarebeingusedmoreefficientlyacrosslargefederaldepartmentsthrough

‘acquisitionmaturitymodels’thatbenchmarkacquisitioncapabilitiesagainstestablished

standards.(TheUKMinistryofDefencehasusedthisapproachforacquiringweaponssystems.)

2.12.2. Shared services

Asdiscussedin2.2,anotherpracticethatindustryfelttheGovernmentcouldadoptisshared

services.Thispracticehasbeenadoptedbybusinessesandattemptedbyseveralgovernments

(bothstateandinternational),withvaryingdegreesofsuccess.

27 Office of Government Commerce (2006), ‘How can we help you? Saving money on IT hardware’, http://www.ogc.gov.uk/documents/CP0146ITHardware.pdf


2.12.3. More innovative procurement and contracting

AfewsubmissionsfeltthattheGovernmentcouldbenefitfromhavingmoreinnovative

approachestoprocurement.Theynotedthattherehasbeenashiftfromrequestsbasedon

technologyorspecificationstorequestsbasedonbusinessoutcomes,particularlyintheprivate

sector.Thisenablesvendorstobemorecreativeandflexible,andincreasesengagement.

Afewalsopointedoutthesubstantialsavingsthate-auctionscanachieve.Forexample,the

UKNationalHealthServicePurchasingandSupplyAgencyrenewedits£40millionbudgeted

requirementforICThardwarethroughane-auction;thesuccessfulsupplierwasabletooffera

£12.7million(31%)savingoverthepreviouscontract.

2.12.4. Improved vendor engagement

Afewsubmissionsalsoidentifiedearlyandongoingengagementofvendorsasanotherarea

wheretheGovernmentcouldobtainbenefits.Forexample,theAIIA’sUKcounterpart,Intellect,

offersanumberofservicestofacilitateearlyinteractionandcloseconsultationbetween

agenciesandindustrytoachievebetteroutcomes.Intellect’sConceptViabilityserviceallows

agenciestogetindustryfeedbackattheconceptstagetoallowearlyanalysisofcosts,risks

andimplementationoptions.Intellectalsoactivelysupportsjointgovernment–industrywork

oncostreduction,deliveryandprocurementeffectiveness.TheQueenslandStateGovernment

hasestablishedasinglevoicefortheICTindustrytoengagewithgovernmentthroughthe

ICTIndustryWorkgroup.ThisgroupcomprisesrepresentativesfromtheAustralianComputer

Society,theAIIAandSoftwareQueensland,whojointlyrepresent12ICTbodies.

2.12.5. Standardised approaches

Somesubmissionsfeltthatprivatesectororganisationsand,toalesserextent,other

governmentsaremoreadvancedinleveragingstandardarchitecturesandbusinessprocesses.

AfewfeltthattheapproachtakenbytheUSGovernmenttooptimiseitsICTinfrastructure,

includingdesktop,communicationsanddatacentres,couldprovideagoodframeworkforthe

Government.OnecompanymentionedthatallgovernmentagenciesinSingaporewillhavea

standardICToperatingenvironmentby2010,whichwillprovidesignificantcostsavingswhile

enhancingoperatingefficiencyandcorporateidentity.

SixsubmissionsmentionedthattheGovernmentwouldbenefitfromadoptingstandardservice

managementsuchasITIL®.OneindustrysubmissioncommentedthattheVictorianState

RevenueOfficehasreduceditsICTbudgetby16.5%sinceachievingITIL®compliancein2005.

Afewsubmissionsalsotalkedaboutothergovernmentsadoptingcommonstandards.

Forexample,governmentsaroundtheworld,mostnotablytheUS,Japan,theUKandThe

Netherlands,havecollaboratedonandadoptedtheExtensibleBusinessReportingLanguage

(XBRL®)datastandard.


2.12.6. Single government entry points

Somesubmissionsidentifiedtheworkofothergovernmentsincreatingsinglepointsofentryfor

citizensandsuggestedthattheGovernmentconsidersimilarmodels.Forexample,theypointed

toNewYorkCity’ssingleentrypointforcitizens,andServiceCanada’sone-stop,‘single-window,

multi-channelled’servicenetworktoimproveafter-hoursaccesstogovernmentservices.

2.12.7. Embracing open source solutions

OnecompanypointedtotheGovernmentofBrazilasanadministrationthatisdeterminedto

effectivelyusethelatestICTtechnologiestoovercomedistanceandsocioeconomicchallenges

andprovidebestoutcomesforitscitizens.Itismakingsomeoftheworld’slargestinvestments

inopensourcesoftware,investingininfrastructureanddeliveringservicesacrossmultimedia.

AnothercompanypointedtotheUSDepartmentofDefense,whichadvocatesopensource

softwareasanintegralcomponentofitscollectiveICTenterpriseenvironment.

2.12.8. Focus on sustainability

Somesubmissionsalsopointedtothefactthatmanycompaniesarefocusedon

sustainabilitypracticestolowercosts,increaseshareholdervalueandgaincompetitive

advantage.Practicesinclude:

•bettermonitoringofpowerconsumption

•targetingdatacentresforcostreductionactivities

•allowingemployeestotele-work.

2.12.9. Consideration of other capability sourcing options

SomesubmissionssuggestedthattheGovernmentcouldbemoreflexibleandstrategicwith

sourcingoptions,forexample,byactivelysupportingnear-shoringandoffshoring.

��

Chapter Three:Summaryofsurveyfindings ��

chaPteR �: summaRy of suRvey findings

3.1. SURVEY APPROACH

Aspartofthereview,asurveyofagencies’ICTspendingwasundertakentounderstandthe

totalICTspendoftheAustralianGovernment(theGovernment)andtoexamineagencyICT

costsacrossarangeofareasincludingdesktops,websites,financialmanagementinformation

systems,humanresourcemanagementinformationsystems,grantsmanagementsystems,

telecommunications,andICTenergyusage.

Thesurveywasbasedonthe2002–03AustralianBureauofStatistics(ABS)Government

TechnologySurvey(GTS).TheABSsurveywasusedtoenablecomparativeanalysisof

expenditureovertime,asitwasthemostrecentcomprehensivesurveyoftheGovernment’sICT

expenditure.AppendixCcontainsanoutlineofthereview’ssurveymethodology.

Eighty-sixresponses28werereceivedcovering91ofthe100Financial Management and

Accountability Act 1997(FMAAct)agenciesthatexistedatthetimethereviewsurveywas

issued.Theresponsesvariedintermsofcompletionandquality,highlightingtheabsenceofa

consistentapproachbyagenciestotheclassificationofsomeoftheirICTcosts.Nonetheless,

thesurveyprovidedsignificantinsightsintoagencies’managementoftheirICTcosts.

Forthepurposesofanalysisofthesurveyagenciesweregroupedintothefollowing

sizecategories:

•Large:agencies(includingDefence)withover$20millionofICTspendin2007–08

(29intotal)

•Medium:agencieswithbetween$2millionand$20millionofICTspendin2007–08

(26intotal)

•Small:agencieswithlessthan$2millionofICTspendin2007–08(29intotal).

3.2. SURVEY RESULTS

3.2.1. Total government spend on ICT

TheGovernmenthasnothadconclusivedataonthevalueofitsannualICTspendsince

theABS2002–03GTSestimatedtheFederalGovernmentICTspend(includingspendingby

Commonwealth Authorities and Companies Act 1997agenciesand38universities)at

$4.2billion.Priortothesurveyundertakenbythereview,bestestimateshadputthe

28 Two agencies that responded have recently been incorporated into another agency. They have been treated as one agency for the purposes of analysis of total ICT spend (bringing the sample size to 84 agencies); however, they have been treated as separate agencies in the analysis of financial and human resource information management systems and energy usage.

Chapter Three:Summaryofsurveyfindings��

Government’scurrentICTspendataround$6billionperannum.Thereview’ssurveyidentified

thatFMAActagenciesspent$4.3billiononICTin2007–08.Basedonthisresult,total

governmentICTspendacrosstheGeneralGovernmentSectorfor2007–08isestimatedat$5.3

billionperannum(excludinguniversities),usingthemultiplierderivedfromtheABSsurvey.

Similarly,theGovernmenthasnothadconclusivedataonthesizeofitsICTworkforcesincethe

ABS2002–03survey,andthatsurveyonlyaddressedtheAPSworkforceanddidnotcaptureICT

contractornumbers.ThereviewsurveyidentifiedthattheICTworkforceofFMAActagencies

at30June2008was13,379(including3,135ICTcontractors).Basedonthisresult,thetotal

governmentICTworkforceacrosstheGeneralGovernmentSectorat30June2008isestimated

at15,751,usingthemultiplierderivedfromtheABSsurvey.

Tables3.1and3.2summarisetheaggregatedatacollectedfromFMAActagenciesinthesurvey.


CABINET-IN-CONFIDENCE 40

total government ICT spend across the General Government Sector for 2007–08 is estimatedat $5.3 billion per annum (excluding universities), using the multiplier derived from the ABSsurvey.

Similarly, the Government has not had conclusive data on the size of its ICT workforce sincethe ABS 2002–03 survey, and that survey only addressed the APS workforce and did notcapture ICT contractor numbers. The review survey identified that the ICT workforce of FMAAct agencies at 30 June 2008 was 13,379 (including 3,135 ICT contractors). Based on thisresult, the total government ICT workforce across the General Government Sector at30 June 2008 is estimated at 15,751, using the multiplier derived from the ABS survey.

Tables 3.1 and 3.2 summarise the aggregate data collected from FMA Act agencies in thesurvey.

Table 3.1 - Total expenses for FMA Act agencies 2002–03 $m 2006–07 $m 2007–08 $m Employee costs 668.4 819.7 946.3

Other operating expenses 1,448.7 2,138.6 2,309.7 Total operating expenses 2,117.1 2,958.3 3,256.1

Capital expenses 677.3 862.2 1,034.7Total ICT spend (operating and capital expenses)

2,794.3 3,820.5 4,290.7

Percentage change in total FMA Act agencies’ ICT spend

36.7% 12.3%

Total FMA Act agencies’ operating expenses

45,846.2 61,575.4 66,792.9

Percentage change in total FMA Act agencies’ operating expenses

34.3% 8.5%

ICT spend as a percentage of total operating expenses

6.1% 6.2% 6.4%

Note: Operating expenses exclude depreciation expenses.

Table 3.1 – Total expenses for FMA Act agencies




Table 3.2 - Total employees and contractors for FMA Act agencies 2002–03 2006–07 2007–08 ICT staff 8,142 9,730 10,244

ICT contractors(a) 3,138 3,135

Total ICT workforce 8,142 12,868 13,379

Total FMA Act agency staff 211,692 218,727 222,311

ICT staff and contractors as a percentage of total employees 3.8% 5.9% 6.0%

ICT spend per employee $15,906 $21,048 $23,257

(a) Note: ICT contractor numbers were not collected in the ABS 2002–03 GTS.

3.2.2. FMA Act agency ICT spend

Analysis of the survey pointed to a significant amount of ICT spend occurring within largeagencies. The 29 large agencies accounted for 94% of the total ICT spend of all FMA Actagencies in 2007–08. The next 26 agencies account for 5% of total ICT spend, while 29 smallagencies account for just 1% of ICT spend (see Figure 3.1).

Figure 3.1 – Break-down of total ICT spend 2007–08

Analysis of the survey indicated a wide variety of ICT spend by agencies as a proportion oftheir total operating expenses. Agency ICT spending as a proportion of their total operatingexpenses vary from 4% to 54%. This large variance in agency responses reflects both thevariety of agency business operations that are reliant on ICT and the extent of projectrelated activity being undertaken by individual agencies.

Analysis also indicated that agencies are spending a significant part of their ICT spend onbusiness as usual (BAU) activities. Agencies reported spending an average of around 77% of

Large94%

Medium5%

Small1%


AnalysisofthesurveypointedtoasignificantamountofICTspendoccurringwithinlarge

agencies.The29largeagenciesaccountedfor94%ofthetotalICTspendofallFMAAct

agenciesin2007–08.Thenext26agenciesaccountfor5%oftotalICTspend,while29small

agenciesaccountforjust1%ofICTspend(seeFigure3.1).



Table 3.2 - Total employees and contractors for FMA Act agencies 2002–03 2006–07 2007–08 ICT staff 8,142 9,730 10,244

ICT contractors(a) 3,138 3,135

Total ICT workforce 8,142 12,868 13,379

Total FMA Act agency staff 211,692 218,727 222,311

ICT staff and contractors as a percentage of total employees

3.8% 5.9% 6.0%

ICT spend per employee $15,906 $21,048 $23,257 (a) Note: ICT contractor numbers were not collected in the ABS 2002–03 GTS.


Analysis of the survey pointed to a significant amount of ICT spend occurring within largeagencies. The 29 large agencies accounted for 94% of the total ICT spend of all FMA Actagencies in 2007–08. The next 26 agencies account for 5% of total ICT spend, while 29 smallagencies account for just 1% of ICT spend (see Figure 3.1).


Analysis of the survey indicated a wide variety of ICT spend by agencies as a proportion oftheir total operating expenses. Agency ICT spending as a proportion of their total operatingexpenses vary from 4% to 54%. This large variance in agency responses reflects both thevariety of agency business operations that are reliant on ICT and the extent of projectrelated activity being undertaken by individual agencies.

Analysis also indicated that agencies are spending a significant part of their ICT spend onbusiness as usual (BAU) activities. Agencies reported spending an average of around 77% oftheir total ICT spend on BAU activities and 23% on project activities to create new capability

Large94%

Medium5%

Small1%

Table 3.2 – Total employees and contractors for FMA Act agencies



AnalysisofthesurveyindicatedawidevarietyofICTspendbyagenciesasaproportionoftheir

totaloperatingexpenses.AgencyICTspendingasaproportionoftheirtotaloperatingexpenses

varyfrom4%to54%.Thislargevarianceinagencyresponsesreflectsboththevarietyofagency

businessoperationsthatarereliantonICTandtheextentofproject-relatedactivitybeing

undertakenbyindividualagencies.

AnalysisalsoindicatedthatagenciesarespendingasignificantpartoftheirICTspendonbusiness

asusual(BAU)activities.Agenciesreportedspendinganaverageofaround77%oftheirtotalICT

spendonBAUactivitiesand23%onprojectactivitiestocreatenewcapabilityin2007–08

(seeFigure3.2).Thiscouldindicatethatagenciesaretrappedbytheheavyburdenofmaintaining

legacyhardwareandsoftware.ThereisawiderangeofspendonBAUandprojectactivityacross

agencies.Somelargeagencieshavesignificantproject-relatedworkandareonlyspending45%on

BAUactivitieswhileothersarespendingupto95%oftheirtotalICTspendonBAU.



in 2007–08 (see Figure 3.2). This could indicate that agencies are trapped by the heavyburden of maintaining legacy hardware and software. There is a wide range of spend on BAUand project activity across agencies. Some large agencies have significant project relatedwork and are only spending 45% on BAU activities while others are spending up to 95% oftheir total ICT spend on BAU.

Figure 3.2 – Average BAU:Project split

3.2.3. FMA Act agency ICT staffing

Analysis of the survey data indicated that workforce costs represent, on average, 47% ofagencies’ total ICT operating costs. It also indicated that agencies rely heavily on the ACTlabour market to supply their ICT workforce, with 79% of total ICT staff located in the ACT.

The survey data also pointed to a continued and significant reliance on ICT contractors tosupplement their ICT staff. The data indicated that 23% of agencies’ ICT workforce was madeup of ICT contractors in 2007–08, a slight fall from 24% in 2006–07 (see Figure 3.3). The dataalso indicated that, on average, ICT contractors cost around $186,000 per annum, which is$94,000 per annum more than the average loaded cost of FMA Act agency ICT staff. Analysisof the survey data also indicated that agencies that have significantly outsourced their ICTenvironments rely more on ICT contractors than agencies with predominantly insourced ICTarrangements. It also indicated that there is a wide range of reliance on ICT contractors, withsome large agencies operating with up to 63% contractors, while others use only 8%contractors in their ICT workforce.

80%

77%

20%

23%

0% 20% 40% 60% 80% 100%

2006-07

2007-08

BAU

Project

3.2.3. FMA Act agency ICT staffing

Analysisofthesurveydataindicatedthatworkforcecostsrepresent,onaverage,47%of

agencies’totalICToperatingcosts.ItalsoindicatedthatagenciesrelyheavilyontheACTlabour

markettosupplytheirICTworkforce,with79%oftotalICTstafflocatedintheACT.

ThesurveydataalsopointedtoacontinuedandsignificantrelianceonICTcontractorsto

supplementtheirICTstaff.Thedataindicatedthat23%ofagencies’ICTworkforcewasmade

upofICTcontractorsin2007–08,aslightfallfrom24%in2006–07(seeFigure3.3).Thedata

alsoindicatedthat,onaverage,ICTcontractorscostaround$186,000perannum,whichis

Figure 3.2 – Average BAU: Project split


$94,000perannummorethantheaverageloadedcostofFMAActagencyICTstaff.Analysis

ofthesurveydataalsoindicatedthatagenciesthathavesignificantlyoutsourcedtheirICT

environmentsrelymoreonICTcontractorsthanagencieswithpredominantlyinsourcedICT

arrangements.ItalsoindicatedthatthereisawiderangeofrelianceonICTcontractors,with

somelargeagenciesoperatingwithupto63%contractors,whileothersuseonly8%contractors

intheirICTworkforce. CABINET-IN-CONFIDENCE


Figure 3.3 – Total FMA Act agency ICT in-house and contractor workforce

Analysis of the survey data highlighted that there was a shortage of around 1,000 ICT skilledworkers (or 7% of the total ICT workforce) across FMA Act agencies at 30 June 2008. Threelarge agencies represented around 86% of the shortfall. The skills that were most in demandincluded software engineers (212), business analysts (157), analyst programmers (80),support technicians (92), project managers (74) and hardware technicians (36).

3.2.4. Desktops

FMA Act agencies’ spend on desktops represented around 10% of their total ICT spend. Totaldesktop spend across FMA Act agencies increased by 4%, from $445.4 million in 2006–07 to$461.5 million in 2007–08. The total number of desktops increased by 1%, from 343,510 in2006–07 to 347,783 in 2007–08.

The data provided by agencies showed significant variations in spend per desktop betweenagencies. Desktop costs vary from around $1,000 to around $3,500 per desktop. Thisindicates that there is potential for many agencies to drive efficiencies in this area.

Analysis of agency survey responses also indicated that there may be substantial underutilisation of their desktop fleet, with agencies reporting significantly more desktop devicesthan there are employees. The data showed that there are approximately 1.6 desktopdevices (including laptops) for every APS employee across FMA Act agencies.

3.2.5. Websites

Analysis of the review survey indicated that agencies spent around $80 million across 611websites in 2007–08, excluding Defence. These costs represent around a reported 2% oftotal ICT spend. Agencies reported a wide variety website costs, ranging from around$10,000 per website to around $1.5 million per website.

76%

77%

24%

23%

0% 20% 40% 60% 80% 100%

2006-07

2007-08

In-house ICTstaff

Contract ICTstaff

Analysisofthesurveydatahighlightedthattherewasashortageofaround1,000ICTskilled

workers(or7%ofthetotalICTworkforce)acrossFMAActagenciesat30June2008.Three

largeagenciesrepresentedaround86%oftheshortfall.Theskillsthatweremostindemand

includedsoftwareengineers(212),businessanalysts(157),analystprogrammers(80),support

technicians(92),projectmanagers(74)andhardwaretechnicians(36).

3.2.4. Desktops

FMAActagencies’spendondesktopsrepresentedaround10%oftheirtotalICTspend.Total

desktopspendacrossFMAActagenciesincreasedby4%,from$445.4millionin2006–07to

$461.5millionin2007–08.Thetotalnumberofdesktopsincreasedby1%,from343,510in

2006–07to347,783in2007–08.

Thedataprovidedbyagenciesshowedsignificantvariationsinspendperdesktopbetween

agencies.Desktopcostsvaryfromaround$1,000toaround$3,500perdesktop.Thisindicates

thatthereispotentialformanyagenciestodriveefficienciesinthisarea.

Figure 3.3 – Total FMA Act agency ICT in-house and contractor workforce

Chapter Three:Summaryofsurveyfindings�0

Analysisofagencysurveyresponsesalsoindicatedthattheremaybesubstantialunder-

utilisationoftheirdesktopfleet,withagenciesreportingsignificantlymoredesktopdevices

thanthereareemployees.Thedatashowedthatthereareapproximately1.6desktopdevices

(includinglaptops)foreveryAPSemployeeacrossFMAActagencies.

3.2.5. Websites

Analysisofthereviewsurveyindicatedthatagenciesspentaround$80millionacross611

websitesin2007–08,excludingDefence.Thesecostsrepresentaroundareported2%oftotal

ICTspend.Agenciesreportedawidevarietywebsitecosts,rangingfromaround$10,000per

websitetoaround$1.5millionperwebsite.

3.2.6. Financial management information systems

AnalysisofagencyresponsesindicatedthatSAPandTechnologyOnearethepredominant

suppliersintheAustralianGovernmentmarketforfinancialmanagementinformationsystems

(FMIS).SAPisusedby29agencies,particularlyinlargeagencies.TechnologyOne’sFinanceOne

systemisusedby18agencies,particularlyinmediumsizedagencies.Theremainingmarketis

sharedbyasmallnumberofotherproviders,asindicatedinFigure3.4.



3.2.6. Financial management information systems

Analysis of agency responses indicated that SAP and Technology One are the predominantsuppliers in the Australian Government market for financial management informationsystems (FMIS). SAP is used by 29 agencies, particularly in large agencies. Technology One’sFinance One system is used by 18 agencies, particularly in medium sized agencies. Theremaining market is shared by a small number of other providers, as indicated in Figure 3.4.

Figure 3.4 – Number of agencies using FMIS

Analysis of the survey data pointed to wide variations in agencies costs of operating theirFMIS. In particular, analysis indicated that there was some correlation between the very lowcost per transaction of around 10 cents to 30 cents and a high volume of transactions butnot complete correlation. For agencies with a lower transaction volume, the cost pertransaction of their FMIS ranged widely from around 10 cents to over $30. This also indicatesscope for considerable efficiency improvements.

Analysis of the data also revealed wide variations in the extent of customisation of agenciesFMIS. Sixty nine agencies reported using systems with no or minimal customisation, whileanalysis of the data from the remaining 17 agencies indicated an exponentially increasingamount of customisation.

3.2.7. Human resource management information systems

Analysis of the data indicated that Aurion and SAP are the predominant players in theAustralian Government market for human resource management information systems(HRMIS). Aurion is used by 37 agencies, while SAP HR is used by 17 agencies (see Figure 3.5).

SUN, 3ACCPAC, 5

Attache, 2

Finance One, 18

Great Plains, 9

MYOB, 3Oracle, 3

QSP, 6

SAP, 29

Other, 4

Not Specif ied, 4

AnalysisofthesurveydatapointedtowidevariationsinagenciescostsofoperatingtheirFMIS.

Inparticular,analysisindicatedthattherewassomecorrelationbetweentheverylowcostper

transactionofaround10cto30candahighvolumeoftransactionsbutnotcompletecorrelation.

Foragencieswithalowertransactionvolume,thecostpertransactionoftheirFMISrangedwidely

fromaround10ctoover$30.Thisalsoindicatesscopeforconsiderableefficiencyimprovements.

Figure 3.4 – Number of agencies using FMIS


Analysisofthedataalsorevealedwidevariationsintheextentofcustomisationofagencies

FMIS.Sixty-nineagenciesreportedusingsystemswithnoorminimalcustomisation,while

analysisofthedatafromtheremaining17agenciesindicatedanexponentiallyincreasing

amountofcustomisation.

3.2.7. Human resource management information systems

AnalysisofthedataindicatedthatAurionandSAParethepredominantplayersinthe

AustralianGovernmentmarketforhumanresourcemanagementinformationsystems

(HRMIS).Aurionisusedby37agencies,whileSAPHRisusedby17agencies(seeFigure3.5). CABINET-IN-CONFIDENCE


Figure 3.5 – Number of agencies using HRMIS

Agencies reported wide variations in the cost of supporting their HRMIS with the cost peremployee ranging from $10 to $500, again indicating the scope for significant efficiencyimprovements.

There were also wide variations in the extent of customisation of agencies HRMIS. Seventyone agencies reported using systems with no or minimal customisation, while analysis ofdata from the remaining 15 agencies indicated an exponentially increasing amount ofcustomisation.

3.2.8. Grants management systems

The number of grants management systems (GMS) used by FMA Act agencies has declinedfrom 150 to 124 since 2006. Some of this decline could be accounted for by agenciesrationalising the number of systems they use. The overwhelming majority of systems are stillpaper based, Excel or custom developed and manage discrete, stand alone grant programs.

The survey data showed that the number of commercial off the shelf products hasincreased. However, operating expenditure on grants systems is relatively concentrated.Only three agencies reported GMS spend exceeding $1 million per year, with the largestspend being $10.6 million per year. Given the overall limited spend on GMS (0.7% of totalICT spend in 2007–08) there does not appear to be any substantial opportunities for wholeof government action in regard to GMS that would have a significant impact on overall ICTspend.

3.2.9. Telecommunications

Agency responses indicated that their ICT spend on telecommunications was$267.7 million in 2006–07, increasing to $335.9 million in 2007–08. This represents 7% oftotal ICT expenditure for 2006–07 and 7.8% for 2007–08.

The data highlighted significant duplication of telecommunications point to point linksdomestically, and in the number of links to international locations across government, a

Aurion, 37

CHRIS, 5MicroPay, 3Not specif ied, 7

Other, 7

Outsourced, 3

Peoplesoft, 7

SAP, 17

AgenciesreportedwidevariationsinthecostofsupportingtheirHRMISwiththecostperemployee

rangingfrom$10to$500,againindicatingthescopeforsignificantefficiencyimprovements.

TherewerealsowidevariationsintheextentofcustomisationofagenciesHRMIS.Seventy-one

agenciesreportedusingsystemswithnoorminimalcustomisation,whileanalysisofdatafrom

theremaining15agenciesindicatedanexponentiallyincreasingamountofcustomisation.

3.2.8. Grants management systems

Thenumberofgrantsmanagementsystems(GMS)usedbyFMAActagencieshasdeclined

from150to124since2006.Someofthisdeclinecouldbeaccountedforbyagencies

rationalisingthenumberofsystemstheyuse.Theoverwhelmingmajorityofsystemsarestill

paper-based,Excelorcustom-developedandmanagediscrete,stand-alonegrantprograms.

Figure 3.5 – Number of agencies using HRMIS


Thesurveydatashowedthatthenumberofcommercialoff-the-shelf(COTS)productshas

increased.However,operatingexpenditureongrantssystemsisrelativelyconcentrated.Only

threeagenciesreportedGMSspendexceeding$1millionperyear,withthelargestspend

being$10.6millionperyear.GiventheoveralllimitedspendonGMS(0.7%oftotalICTspendin

2007–08)theredoesnotappeartobeanysubstantialopportunitiesforwhole-of-government

actioninregardtoGMSthatwouldhaveasignificantimpactonoverallICTspend.

3.2.9. Telecommunications

AgencyresponsesindicatedthattheirICTspendontelecommunicationswas$267.7millionin

2006–07,increasingto$335.9millionin2007–08.Thisrepresents7%oftotalICTexpenditure

for2006–07and7.8%for2007–08.

Thedatahighlightedsignificantduplicationoftelecommunicationspoint-to-pointlinks

domestically,andinthenumberoflinkstointernationallocationsacrossgovernment,aresult

ofagenciesindividuallyimplementingtheirtelecommunicationsarrangements.In2007–08

therewere225domesticagencylinksover10routesand37linksbetweenSydneyandCanberra

alone;internationally,therewerefivelinksfromfourdifferentagenciesintoJakartaandfive

linksfromthreedifferentagenciesintoLondon.

Tables3.3and3.4belowindicatethenumberoflinksbetweenCanberraandAustralianstate

capitalcitiesandinternationallinksfromAustralia,andthetotalcostofthoselinks.

Analysisofagencysurveyresponsesalsoidentified69networkgatewayswithvendorsproviding

similarservicesacrossmultipleagencieswithoutanyaggregationofcontractualarrangements.

Table3.5indicatesthenumberofnetworkgatewaysprovidedbyarangeofvendors.



result of agencies individually implementing their telecommunications arrangements. In2007–08 there were 225 domestic agency links over 10 routes and 37 links between Sydneyand Canberra alone; internationally, there were five links from four different agencies intoJakarta and five links from three different agencies into London.

Tables 3.3 and 3.4 below indicate the number of links between Canberra and Australianstate capital cities and international links from Australia, and the total cost of those links.

Table 3.3 – Domestic telecommunications links Number Total cost 2006–07

$mTotal cost 2007–08

$mCanberra – Sydney 37 2.7 2.8

Canberra – Melbourne 28 0.8 0.7

Canberra – Adelaide 21 0.6 0.6

Canberra – Brisbane 20 0.7 0.7

Canberra – Perth 19 0.5 0.5

Table 3.4 –Telecommunications links to international locations Number Total cost 2007–08

$mJakarta 5 2.2

London 5 1.2

Honiara 4 0.3

Port Moresby 3 0.3

Bangkok 3 0.5

Analysis of agency survey responses also identified 69 network gateways with vendorsproviding similar services across multiple agencies without any aggregation of contractualarrangements. Table 3.5 indicates the number of network gateways provided by a range ofvendors.

Table 3.3 – Domestic telecommunications links




result of agencies individually implementing their telecommunications arrangements. In2007–08 there were 225 domestic agency links over 10 routes and 37 links between Sydneyand Canberra alone; internationally, there were five links from four different agencies intoJakarta and five links from three different agencies into London.

Tables 3.3 and 3.4 below indicate the number of links between Canberra and Australianstate capital cities and international links from Australia, and the total cost of those links.

Table 3.3 – Domestic telecommunications links Number Total cost 2006–07

$mTotal cost 2007–08

$mCanberra – Sydney 37 2.7 2.8

Canberra – Melbourne 28 0.8 0.7

Canberra – Adelaide 21 0.6 0.6

Canberra – Brisbane 20 0.7 0.7

Canberra – Perth 19 0.5 0.5

Table 3.4 –Telecommunications links to international locations Number Total cost 2007–08

$mJakarta 5 2.2

London 5 1.2

Honiara 4 0.3

Port Moresby 3 0.3

Bangkok 3 0.5

Analysis of agency survey responses also identified 69 network gateways with vendorsproviding similar services across multiple agencies without any aggregation of contractualarrangements. Table 3.5 indicates the number of network gateways provided by a range ofvendors.



Table 3.5 - Network gateway vendors Organisation Number of gateways Verizon 27

Macquarie Telecom 10

Cybertrust 9

Telstra 9

EDS 4

Other 10

3.2.10. Energy

Seventy two agencies responded to the survey questions on energy usage and the cost oftheir ICT estate (agencies with less than 50 staff were not required to respond to thisquestion). There was generally a poor response, with many agencies unable to providemeaningful or consistent data on their ICT energy usage.

Thirty agencies provided data on energy consumption and costs for 2007–08. However,35 agencies did not provide any data regarding their energy consumption or cost, and afurther seven provided inconsistent data.

Where agencies provided responses to ICT energy consumption and cost the responsesindicated that ICT energy consumption increased by 3%, from 162.4 gigawatts in 2006–07 to167.6 gigawatts in 2007–08. However, over this period agencies reported that ICT energycosts increased by 16%, from $18.1million in 2006–07 to $21.0 million in 2007–08,indicating significant growth in energy cost.

Twenty three agencies indicated that they had an energy plan, while 49 agencies advisedthat they did not. Of the 23 agencies that reported having an energy plan in place,13 indicated that their energy plan included an ICT energy component; however, only six ofthose agencies were able to provide meaningful data in relation to the questions asked inthe survey.

Ten agencies indicated that their ICT energy consumption was not monitored or reported.

3.2.10. Energy

Seventy-twoagenciesrespondedtothesurveyquestionsonenergyusageandthecostoftheir

ICTestate(agencieswithlessthan50staffwerenotrequiredtorespondtothisquestion).There

wasgenerallyapoorresponse,withmanyagenciesunabletoprovidemeaningfulorconsistent

dataontheirICTenergyusage.

Thirtyagenciesprovideddataonenergyconsumptionandcostsfor2007–08.However,35

agenciesdidnotprovideanydataregardingtheirenergyconsumptionorcost,andafurther

sevenprovidedinconsistentdata.

Table 3.4 – Telecommunications links to international locations

Table 3.5 – Network gateway vendors


WhereagenciesprovidedresponsestoICTenergyconsumptionandcosttheresponses

indicatedthatICTenergyconsumptionincreasedby3%,from162.4gigawattsin2006–07

to167.6gigawattsin2007–08.However,overthisperiodagenciesreportedthatICTenergy

costsincreasedby16%,from$18.1millionin2006–07to$21.0millionin2007–08,indicating

significantgrowthinenergycost.

Twenty-threeagenciesindicatedthattheyhadanenergyplan,while49agenciesadvisedthat

theydidnot.Ofthe23agenciesthatreportedhavinganenergyplaninplace,13indicatedthat

theirenergyplanincludedanICTenergycomponent;however,onlysixofthoseagencieswere

abletoprovidemeaningfuldatainrelationtothequestionsaskedinthesurvey.

TenagenciesindicatedthattheirICTenergyconsumptionwasnotmonitoredorreported.

Chapter Four:Keyfindings ��

chaPteR �: Key findingsAfterdetailedanalysisoftheevidenceobtainedfromwithinandoutsidetheAustralianGovernment

(theGovernment)andthesurveyresults,thereviewidentifiedthefollowingkeyfindings.

1. Thereisweakgovernanceofpan-governmentissuesrelatedtoICT.

2. AgencygovernancemechanismsareweakinrespectoftheirfocusonICTefficiencyand

anunderstandingoforganisationalcapabilitytocommission,manageandrealisebenefits

fromICT-enabledprojects.

3. Thebusinessasusual(BAU)ICTfundinginagenciesisnotsubjecttosufficientchallenge

andscrutiny.

4. ThereisadisconnectbetweenthestatedimportanceofICTandactionsinrelationto

ICTskills.

5. Thereisnowhole-of-governmentstrategicplanfordatacentres.Intheabsenceofsucha

plan,theGovernmentwillbeforcedintoaseriesofadhocinvestmentswhichwill,intotal,

costintheorderof$1billionmorethanacoordinatedapproachovera15-yearperiod.

6. ThegovernmentICTmarketplaceisneitherefficientnoreffective.

7. ThereisasignificantdisconnectbetweentheGovernment’soverallsustainability

agendaanditsabilitytounderstandandmanageenergycostsandthecarbonfootprint

ofitsICTestate.

Theremainderofthischaptersetsoutthesignificantevidencethatsupportsthesefindings.

4.1. WEAK GOVERNANCE OF PAN-GOVERNMENT ISSUES RELATED TO ICT

Thelackofavehicleforpoliticalleadershipandweakgovernanceofpan-governmentissues

relatedtoICT,coupledwithagencyautonomywithregardtoICTinvestments,hasledto

significantfragmentationandduplication.Theseissuesinclude:

• duplicationoftelecommunicationlinks,bothdomesticallyandinternationally–for

example,thereare37linksbetweenSydneyandCanberraalone,fivelinksfromfour

differentagenciesintoJakarta,andfivelinksfromthreedifferentagenciesintoLondon

• duplicationofgateways,with69gatewaysandanumberofcompanieshostingthe

gatewaysthatareprovidingmuchthesameservice,yetnoaggregationistakingplace–for

example,onesupplierprovided27gatewaysfortheGovernment

• lackofstandardisationincommonbusinessprocessesacrossgovernment

• afragmentedapproachtosecurityandauthentication,andidentityandaccessmanagement

• lackofadoptionoftheAustralianGovernmentArchitecturebecauseitisnotmandatory.

Chapter Four:Keyfindings��

ThereareexistingICTgovernancebodies(suchastheSecretaries’CommitteeonICT(SCICT),

ChiefInformationOfficerCommittee,BusinessProcessTransformationCommitteeandChief

InformationOfficerForum),buttheireffectivenessislimitedandtheyhavelittleinfluenceover

agencies.OnlysevenagenciesmadeanycommentontheSCICT,whileeightmadecomments

onotherforums.TheSCICThasneverhadamandateanddefinedrolefromMinisters.Overall,

thereisnostronglineofsightbetweenagencyICTactivityandwhole-of-governmentpriorities.

Furthermore,thecurrentgovernancearrangementsallowagenciestooptintowhole-of-

governmentICTinitiativesonaself-approvedbasisasthoughtheywereindependententities

whodidnotrelyonfundingbytheAustraliantaxpayer.

Thereisalsotoomuchvariationinthedegreeandqualityofinteractionbetweenpolicy

formulationandimplementation.Thereisabroadspectrumofpractice,rangingfromearly

andongoingconsultationbetweenpolicymakersandpolicyimplementerstonoconsultation

andannouncementsmadeinthepress,whichcomeasasurprisetothoseresponsiblefor

deliveryofthepolicy.Thisissueisexacerbatedbytheincreasingcomplexityofsomepolicies.

InconjunctionwiththedecisiontoadopttheGatewayReviewGate0(whichincludesthe

planningforbenefitsrealisation)inparticularcircumstancesratherthanasastandardgate,

therearerealdownstreamimplicationsandrisksforpolicyimplementationfrompoorly

consideredpolicydesign.

ThetotalityoftheseissuesultimatelyhinderstheabilityoftheGovernmenttoprovideefficient

andeffectivejoined-upICT-enabledservicestocitizensandbusinesses.

TheAustralianGovernmentInformationManagementOffice(AGIMO)hasproducedvarious

toolsandstandardstohelpagenciesuseICTtoimproveadministrationandservicedelivery,

andtoachievesomelevelofconsistencyacrosstheGovernment.Despitethis,therearevariable

viewsonthebusinessrelevanceandattractivenessoftheseAGIMOframeworks,andsome

AGIMOtoolsandstandardsarenotverywellknownandhencenotwidelyused.AGIMO’sremit

isweakasaconsequenceofalackofaclearmandate.

Finally,themechanismsfordetectingissuesandemergingtrendsandassessingwhetherthey

shouldbedealtwithatanagencyorwhole-of-governmentlevelaretooweak.Thisleadsto

adhoc,reactiveandsiloedresponses,asdemonstratedbythefollowingexamples.

• Theemergenceofdifferentclientcomputingarchitectureswillleadtoincreasedvariability

unlesscoordinatedactionistaken.

• Duplication,thelackofcommonstandardsandsharingofbestpracticeintheuseof

geospatialdatabytheGovernmentareissueswhichhaverecentlybeguntobeaddressed

onawhole-of-governmentbasis,butitshouldhavebeenresolvedmuchearlierbefore

agenciesbegantopursueindependentcoursesofaction.


• Thereisanemergingissuearounddatacentresandtheirlong-termviabilityinterms

ofspace,weight,cooling,power,thesustainabilityagenda,andcurrentandanticipated

availabilityrequirements.

• Thereisnowhole-of-governmentoversightofdevelopmentsintheICTindustry,including

activitiessuchasmergersandacquisitions,andthecapacityofcertainsupplierstofulfil

contractrequirements.

Thereisalsoevidenceofpocketsofbestpracticesandcommonprojectswithinthe

Government,butthereareweakmechanismsinplacetoshareandleveragethese.

4.2. AGENCY GOVERNANCE MECHANISMS ARE WEAK IN RESPECT OF FOCUS ON ICT EFFICIENCY AND UNDERSTANDING OF ORGANISATIONAL CAPABILITY TO COMMISSION, MANAGE AND REALISE BENEFITS FROM ICT-ENABLED PROJECTS

Thereviewfoundthatthereisnoformalcommonmethodofassessingagencycapability

tocommission,manageandrealisebenefitsfromICT-enabledprojects.Althoughexplicitly

askedtocommentonthis,mostagenciesansweredquestionsaroundcapabilityintermsof

ICTcapability,ratherthanorganisationalcapability.Thisholisticcapabilityrequirestheright

leadership,skills,processesandsystemswithinandacrossthebusinessandICTdomains.

Measurementofprojectbenefitsrealisationbyagenciesisalsoweak,despiteevidencethat

manyofthemhaveadoptedformalisedprojectmanagementmethodologies.Ofthe193

agencyprojectsdetailed,only5%ofprojectsreportedactualmeasurementofbenefitsand

comparedanticipatedbenefitswithactualbenefitsrealised.

Overall,thereappearstobealackofunderstandingofthetrade-offsbetweencommercial

off-the-shelf(COTS)solutionsandcustomisation.Forexample,17agenciesreported

customisingtheirfinancialmanagementinformationsystem(FMIS)bymorethan10%.Similar

customisationwasrecordedforHRsystems.Thisfindingisconsistentwithviewsfromoutside

theGovernment,where24organisationsindicatedthattherewerenospecificinhibitorsto

usingCOTSsolutionswithoutcustomisation.Another10commentedthattherewasoften

unnecessaryexcessivecustomisationbyagenciesleadingtoincreasedcostsandtheerosionof

theinherentbenefitsofusingCOTSproducts.

Therearealsodownstreamimplicationsformachineryofgovernment(MoG)changes.For

example,adecisionbyoneagencytogodownacustomisedroutecancreateafutureliability

foranotheragencywhenMoGchangesresultinwholeorpartofanagencybeingintegrated

withadifferentone.Thiscanresultinunnecessarycomplexityandsignificantcostswhen

integratingdisparateICTsystems.OneagencyidentifiedthatitsICTcostsrelatedtotherecent

MoGchangesareintheorderof$30milliontointegratesystemsandinfrastructure.

Chapter Four:Keyfindings��

4.3. THE BUSINESS AS USUAL ICT FUNDING IN AGENCIES IS NOT SUBJECT TO SUFFICIENT CHALLENGE AND SCRUTINY

Thereviewfoundthatveryfewagenciesactivelyandregularlymeasuretheefficiencyoftheir

ICTspending.ItisalsoevidentthattherearenocommonmetricsformeasuringICTefficiency

ortheeffectivenessofanagency’sICTspend.Forexample,athirdofagenciesdidnotprovide

anyinformationonefficiencyoreffectiveness,andmostdidnotarticulateplanstoaddressor

improveefficiency.Thismeansthatitisverydifficulttoobtainconsistentandmeaningfuldata

formanagementpurposes.

Thereisevidenceoftheunder-utilisationofsoftwareandhardwareassets.Forexample,thereare

1.6desktops(includinglaptops)foreachAPSstaffmember.Industryhasalsoproposedanumber

ofactionsthatcouldimproveassetutilisation,suchasaggregatingbandwidthandnetwork

infrastructure,consolidatingdatacentres,andrationalisingbusinesssystemsandapplications.

Withinbusinessasusual(BAU),therearesignificantvariationsincostsacrossagencies.

Forexample:

• desktopcostsrangedfrom$1,000to$3,500perdesktop

• financesystemscostspertransactionrangedfrom10ctomorethan$30

• HRsystemscostperemployeesupportedrangedfrom$10to$500

• thereare611reportedwebsites(excludingDefence),withcostsrangingfrom$10,000to

$1.5millionperwebsite.

TheaveragesplitbetweenBAUandprojectspendisalsotooheavilyskewedtowardstheformer

(77:23%),withlittlevariationintheaveragedependingonthesizeoftheagency.Relativetothe

proportionofspendBAUrepresents,thelevelofscrutinyofthisspendistoolow.

4.4. DISCONNECT BETWEEN THE STATED IMPORTANCE OF ICT AND ACTIONS IN RELATION TO ICT SKILLS

AgenciesstatedthatICTisfundamentaltotheirbusiness,yetthereisagenerallackofstrategic

planningforICTworkforcecapabilityatboththeagencyandwhole-of-governmentlevel.Only

fouragencieshaveICTworkforceplans,withafurthertwoplanningtoformaliseplans.

ThereisalsoalackofprofessionalcareerstructuresforICTprofessionalsintheAPS,makingit

moredifficultfortheGovernmenttorecruitandretainICTtalent.Trainingthatisprovidedis

basedonlyonspecificagencyneeds.

ExistingAGIMOinitiativessuchastheICTApprenticeshipandCadetshipprogramsareuseful,

butnotsufficienttoaddresstheskillsissue.


AgencyICTactivityisCanberra-centric,with79%ofICTstafflocatedintheACT.During

meetingswithagencies,threeagenciesnotedthattheyhadconsciouslymovedICTpositionsto

otherlocationsthroughoutAustraliainresponsetotheskillsshortage.Oneagencynotedthat

thisapproachhad,tosomeextent,bufferedthemfromtherisksinherentintheskillsshortage.

Together,thesefactorshavecontributedtotheICTskillsshortageintheAPS,withagencies

reportingtotalICTstaffshortagesintheorderof1,000(mainlyhighlyskilled).Thereis

alsoaheavyrelianceoncontractors,whorepresent23%ofthetotalcurrentICTworkforce.

Furthermore,thedecentralisedwayinwhichICTprojectsaremanagedmeansthatagencies

competeinthemarketforICTstaff,whichaffectscontractorrates.Onaverage,ICTcontractors

costaround$186,000perannum,whichis$94,000perannummorethantheaverageloaded

costforICTstaffinFMAActagencies.

ThelackoftrainingforSeniorResponsibleOfficialsintermsoftheirrolesandresponsibilitiesis

furtherevidenceofthedisconnectbetweenthestatedimportanceofICTandactionsinrelation

toICT.Moreover,organisationalleadersarenotaswellequippedastheyneedtobeonhowto

harnessthepotentialbenefitsofICT.

Finally,inrelationtosecurityclearancesthereisevidencethatbestpracticeintransferring

securityclearances(belowthe‘Secret’or‘HighlyProtected’level)betweenagenciesisnotwidely

adopted,leadingtounnecessarydelaysandcosts.Inaddition,itimpactsontheresponsiveness

andflexibilityofagencies.Forexample,agenciesneedtowaittoutiliseskillsandthiscanhave

subsequenteffectsonprojectdelivery.IalsonoticedthattheverificationofmyUKsecurity

clearancebyFinancehappenedalotfasterthanthereportedsixweeksofoneagencytoaccept

thesecurityclearancegrantedbyanotheragency.Itseemsstrangetomethataninternational

clearancewouldtakelesstimethananagency-to-agencyclearance.

Thesepointsraisesomequestionsaboutclearanceprocesses:

• Istheprocessconsistentandwell-designed?Thevariationinperformanceraisesdoubton

thatscore.

• Istheprocesssupportedbystandard,well-designed,interoperabletools?

• Couldsomeformofshared,centralprocess–drawingoncurrentfacilitiesandsystems

wheretheyexist–deliveramoresatisfactoryoutcomewithoutcompromisingagency

responsibilitiesandneeds?

Chapter Four:Keyfindings�0

4.5. 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 SIGNIFICANTLY MORE THAN A COORDINATED APPROACH

Fromtheagencybilateralmeetings,subsequentdatagatheringandindustryresponses,itisclear

thattheGovernmentisfacingsignificantissueswithrespecttoagencydatacentrearrangements.

Thekeyissuesare:

• Power.TheACThasonlyasinglepowergrid29whichposesariskgiventheeverincreasing

demandinpower.

• Capacity.EighteendatacentresofthelargestagenciesbasedintheACThaveidentifiedthat

theyhave10m2orlessavailablecapacityforgrowth.Withindustrybenchmarksindicating

thatgrowthindatacentrefloorspaceis5–10%ayear,thereisemergingpressurefor

additionaldatacentrecapacity.

• Inadequatefacilities.Lackofinvestmenthascontributedtoexistingfacilitiesnotmeeting

thedemandsofmoderntechnologyinthekeyareasoffloorloading,heating,ventilation

andair-conditioning,andavailabilityrequirements.Asignificantnumberofagencies

indicatedthattheywouldneeddatacentresoverthenext10–15yearswithhigherlevelsof

availabilitythantheircurrentfacilities.

Thelackofawhole-of-governmentdatacentrestrategyhasledtoagenciesindependently

establishingorsourcingdatacentrefacilitieswithoutconsideringtheeconomiesofscalethat

canbeachievedfromhavingawhole-of-governmentperspective.Afewagenciesarenow

activelyplanningtherequirementsforreplacementofsomeoftheirexistingfacilities.Basedon

high-levelmodellingwork,thereviewconsidersthatthereisaprimafaciecasethatawhole-of-

governmentapproachwillcostintheorderof$1billionlessovera15-yearperiodthanallowing

eachagencytohandlethereplacementoftheirexistingdatacentresonanautonomousbasis.

Additionalbenefitsoftakingawhole-of-governmentapproachtodatacentresare:

• Geographiclocationbenefitscanberealised.Coolerclimateslocationshavethepotentialto

reducecoolingcosts.

• Reductionincommunicationsinfrastructure.Fewerphysicaldatacentresrequireless

physicalcommunicationsinfrastructure.

• Disasterrecovery.Itwillbeeasiertoaccommodatedisasterrecoveryatawhole-of-

governmentlevelratherthaneachagencydealingwiththeissueautonomously.

29 There are two feeds from New South Wales to the single ACT electricity grid. One feed provides 85% of electricity to the ACT and the other 15%. The smaller 15% feed is only to the immediate Fyshwick area and is insufficient to support agency needs. Agencies with data centres in Canberra are therefore susceptible to the single ACT power feed.


4.6. THE GOVERNMENT ICT MARKETPLACE IS NEITHER EFFICIENT NOR EFFECTIVE

ThereviewfoundevidencetosupportthefindingthatthegovernmentICTmarketplaceis

neitherefficientnoreffective.Thisevidenceincluded:

• hightransactioncostsduetooverlyonerousprocurementprocessesandslow

decisionmaking

• barrierstoentry,particularlyforsmallandmediumenterprises

• toomuchuseofprescriptivestatementsofrequirement,whichlimitstherangeofsolutions

proposedbyvendors,includingcommercial/governmentoff-the-shelf(COTS/GOTS)solutions

• failuretoengagesufficientlywithindustrybeforethestartoftheformalcompetitiveprocess

• thepositiontakenbyagenciesonintellectualpropertyisseenasadeterrentbysuppliers

• theGovernment’sliabilitypolicyisnotconsistentlyimplemented,whichresultsinunlimited

liabilityorcapsonliabilitythataresetatamountsthataresohightheyareessentiallythe

sameasunlimitedliability

• theGovernmentisnotmakinguseofitscollectivebuyingpowerforcommodityproducts,

leadingtomultipletendersforthesameproductandagenciesbuyingtheseproductsat

differentprices

• theGovernment’s$80,000thresholdforopentender

• insufficientuseofselectivesourcingtoreducedependencyonlargeprimecontractorsand

increasethelikelihoodof‘best-in-class’solutions.

4.7. 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

ThereisasignificantdisconnectbetweentheGovernment’soverallsustainabilityagendaand

itsabilitytounderstandandmanageitsenergycostsandthefootprintofitsICTestate.This

isevidencedbythelackofdataagencieswereabletoprovideinrelationtoenergyusageand

costs.Forexample,ofthe72agenciesthatwererequestedtoanswertheenergyquestions,35

providednodataonenergy,andafurthersevenprovidedinconsistentdata.Only23agencies

indicatedthattheyhadanenergyplan,while49agenciesadvisedthattheydidnothaveaplan

inplace.Ofthe23agenciesthatreportedhavinganenergyplaninplace,13indicatedthattheir

energyplanincludedanICTenergycomponent;however,onlysixofthoseagencieswereable

toprovidemeaningfuldatainresponsetothequestionsaskedinthesurvey.

��

Chapter Five:Recommendations ��

chaPteR �: Recommendations

5.1. RECOMMENDATION 1 – STRENGTHEN PAN-GOVERNMENT GOVERNANCE

5.1.1. Establish a Ministerial Committee on ICT

IrecommendtheestablishmentofaMinisterialCommitteeonICTasthevehicleforinvolving

Ministersintheleadershipandgovernanceofpan-governmentissuesrelatedtoICT.The

membershipofthecommitteeshouldincludeMinisterswhodrivechangeandhaveaninterest

inhowICTcancontributetotheachievementofkeygovernmentoutcomesandpolicies,

includingtheirdeliverability.

ThecommitteeshouldberesponsibleforICTpolicies,overallstrategicvision,whole-of-

governmentICT,andtheapprovalofopt-outs(seeRecommendation5.1.3)fromselectedwhole-

of-governmentactivities.ItwillbeinformedandsupportedbytheSecretaries’ICTGovernance

Board(seebelow),includingperiodicreportingontheprogressandimpactofimplementingthe

agreedrecommendationsarisingfromthisreview.

IalsoproposethattheMinisterialCommitteemeetaroundthreetimesayear,withgreater

frequencyofmeetingsinthefirstyear.

5.1.2. Create a Secretaries’ ICT Governance Board and provide it with a strong mandate from the Government

Todriveforwardtheministerialagendaonwhole-of-governmentICT,Irecommendthecreation

ofaSecretaries’ICTGovernanceBoard(SIGB),whichshouldbegivenastrongmandatefromthe

Government.TheSIGBwillreplacetheexistingSecretaries’CommitteeonICT(SCICT).

TheSIGBwillbeacommitteeofSecretariesrepresentativeofcentralbodies,portfolio

departments,deliveryagenciesandafewtopexecutivesfromprivatesectorcompanieswhich

aresuccessfulusersofICT.

ItwillbesupportedbytheChiefInformationOfficerCommittee(CIOC),BusinessProcess

TransformationCommittee(BPTC),andtheChiefInformationOfficerForum(CIOF),with

strongertermsofreference,andasecretariatfunctiontoensurethatonlymattersandpapers

appropriatetotheSIGBmembershipgoforwardforconsideration.

Chapter Five:Recommendations��

TheSIGBshouldbefocusedonbusiness,nottechnologyortechnicalissues,andbeempowered

tosetwhole-of-governmentstrategiestosupportthepoliciesandvisiondeterminedby

Ministers.Itsproposedtermsofreferenceareto:

• beresponsibleforoverseeingprogressandtheimpactofthechangeprogramarisingfrom

theGovernment’sresponsetothisreview

• reviewonanannualbasiskeytrendsintheGovernment’sICTexpenditureandalertthe

MinisterialCommitteetoanysignificantchanges

• beresponsibleforthestrategicportfoliomanagementofICTinvestmentsacross

FMAActagencies

• beresponsiblefordeterminingpriorityareasforstandardisation,consolidationand

commonapproaches

• beresponsiblefordeterminingtheGovernment’sresponsetoemergingICTtrendsandissues

• considerandapprovetheAustralianGovernmentInformationManagementOffice’s

(AGIMO)annualworkplan.

AppendixHsetsoutcandidatesforconsiderationforwhole-of-governmentapproaches,subject

toopt-out,overthefirst2yearsoftheSIGB’sexistence.

Itisessentialthatbeforeapprovinganyproposalforacommonapproach,thattheSIGBseeks

assurancefromtheCIOC,BPTCandCIOFasappropriate,thattheproposalisfitforpurposeand

thatimplementationaspects(includingfunding)havebeenfullyconsidered.

AppendixIsetsoutproposedcriteriaagainstwhichthebenefitsofpotentialwhole-of-

governmentapproachesandarrangementssubjecttoopt-outshouldbeassessed.

IalsoproposethattheSIGBmeetaroundfourtosixtimesayear,withgreaterfrequencyof

meetingsinthefirstyear.TheyshouldalsoreportperiodicallytotheMinisterialCommittee.

5.1.3. Allow agencies to obtain opt-outs from agreed whole-of-government activities, based on genuine business need. Opt-outs to be approved by the Ministerial Committee, informed by the SIGB

Irecommendthatthecurrentsystemofself-approvedopt-inbyagenciestowhole-of-

governmentICTarrangementsischangedtoanewsystemwherebyagencieswillneedtoseek

approvalfromtheMinisterialCommitteetoopt-outfromagreedarrangements.

Approvaloftheopt-outswillbeinformedbytheSIGB,particularlyduringthebudgetprocess.

AdvicetotheMinisterialCommitteeduringthisprocessoncompliancewithagreedwhole-of-

governmentarrangementsandrequestsforopt-outsshouldreplacetherolefortheSCICTin

thetwo-passprocesspreviouslyagreedbytheGovernment.


Toseekanopt-out,anagencywillneedtoprepareashortbusinesscasebasedonagenuine

businessneed,irrespectiveofhowthedriverfortheopt-outisfunded.

Thecriteriafortheassessmentofopt-outswillneedtobedevelopedandagreedbytheSIGB.

ProvidedtheassurancemechanismIhaverecommendedaboveinRecommendation5.1.2for

theSIGBworkseffectively,Ienvisagethenumberofpotentialopt-outswillbelow.

BasedontheadvicethatIhavereceivedfromFinance,Ibelievethattheproposedchangesto

agencyoperationcanbeimplementedwithintheprovisionsofthecurrentFMAAct,provided

thechangessetoutaboveareapprovedasgovernmentpolicy.

5.1.4. Redefine AGIMO’s role

IntheproposednewmodeloftheGovernment’suseofICT,theprincipalroleofthecentralunit

(AGIMO)istoactasacatalystforchangeandanagenttoassisttheformulationandrealisation

ofobjectives,policiesandstrategiesagreedbytheMinisterialCommitteeandtheSIGB.

ItisthereforeessentialthatitsoverallremitisapprovedbytheSIGBandMinisters,itsworkplan

isreviewedandapprovedbytheSIGBannually,andfundingbeprovidedsothattheagreed

workplancanbeimplemented.

AppendixJsetsouttheproposedroleforAGIMO.

Oncethefinalremitofthecentralunithasbeenagreed,itmaybeappropriatetogive

considerationastowhetheritsnameshouldbechangedfromAGIMOtoreflectmore

accuratelyitsnewrole.

Inordertooptimisetheeffectivenessoftheunitinthenewmodelofoperation,Irecommend

thatitsresourcingmodelincludeasignificantnumberofagencysecondeesonarotational

basis,aswellassomerecruitmentofprivatesectorexpertise.

5.1.5. Establish a program board

IrecommendasmallboardbeestablishedwitharemitfromtheSIGBtomanagetheoverall

implementationoftheagreedrecommendationsarisingfromthisreview.Theboardshould

includetheGeneralManagerofAGIMO,theGeneralManagerofFinance’sBudgetGroupanda

DeputySecretaryfromPM&C.TheboardshouldreportprogresstotheMinisterialCommittee,

SIGBandtheSecretaryofPM&C.


5.2. RECOMMENDATION 2 – STRENGTHEN AGENCY GOVERNANCE

5.2.1. Improve agency capability

Asafirststep,Irecommendimplementingacommonmethodologyforassessingagency

capabilitybasedonself-assessmentandperiodicindependentaudit.Thedevelopmentof

thismethodologyshouldutiliseandintegrateexisting‘off-the-shelf’methodologiessuchas

COBIT®,CMMI®,ITIL®,AS8015-2005CorporateGovernanceofICT,P3M3™,theUKGovernment

capabilityreviewapproach,PRINCE2™,PMBOK®,andtheUKGovernmentOfficeofGovernment

Commerce’sManagingSuccessfulProgrammes.Itshouldencompasstheentirelifecycle

managementofICT,includingbusinessdomainactivitiessuchasrequirementsdefinitionand

benefitsrealisation.Themodelwillalsoneedtotakeintoaccountattributessuchastheability

totransferandmanageICTworkremotely,andtheabilitytoworksuccessfullywithindustryas

aclientbothprecontractawardandduringthelifeofacontract.

Agencyexecutiveswillberequiredtoproposeatargetlevelofcapabilitybasedontheir

agency’sandtheGovernment’sstrategicpriorities,andforthistobeindependentlyvalidated,

particularlybeforeundertakingmajorICTprojectsthatareeitherinternallyfundedorreceiving

newpolicyproposal(NPP)funding.Thetargetlevelofcapabilityneedstobekeptunderreview

inthelightofchangingagencyandgovernmentprioritiesandobjectives.

Agencieswillalsoberequiredtodevelopacapabilityimprovementplanandtocommitto

andagreeactionstoaddressanycapabilitygaps.Furthermore,agenciesshouldincorporate

capabilityimprovement,whererequired,intotheirriskmanagementframework.

Ienvisagethata‘lite’versionofthismethodologywillalsoneedtobedevelopedfor

smalleragencies.

5.2.2. Strengthen the link between policy formulation and implementation

FollowingonfromRecommendation5.2.1,Irecommendthatagencycapabilitybeincludedas

oneofthefactorsconsideredinthetwo-passinvestmentapprovalprocess(forbothNPPand

internallyfundedagencyprojects).

Thetwo-passinvestmentapprovalprocessshouldbeextendedtoincludeadditionalstagesfor

projectsbeingundertakenbyanagencywhichneedstoenhanceitscapabilitytoahigherlevel

inordertoundertaketheproject.Ateachstage,theonusofproofmustbewiththeagencyto

demonstratethatboththeprojectanditscapabilityimprovementplanareontrack.

Additionally,induecourse,largeragenciesshoulddemonstrateintheirNPPs,andinternally

fundedprojectsrequiredtogothroughthetwo-passprocess,theircapabilitytolocate

significantportionsoftheworkoutsideCanberraandtheirintentiontodoso.


IalsorecommendstrengtheninggovernanceregardingtheadoptionormodificationofCOTS/

GOTS.AGIMO,inconsultationwiththeBPTC,CIOCandCIOFshouldalsoadvisetheSIGBofthe

selectedareasandapplications(forexample,backofficesystems)whereproposalstoacquire

orupgradebespokeorcustomisedsolutionswillrequireapprovalbytheMinisterialCommittee,

utilisingthesameprocessasforopt-outs.InadditiontorelevantnewNPPandinternallyfunded

projects,thisshouldalsoapplytoallexistingapprovedNPPswhichhavenotyetconcluded

procurement.Thisisessentialasthepotentialliabilityforeachagencyandimpactoffuture

machineryofgovernmentchangesdoesnotrestwithanindividualagency.Thisissueneedsto

beopenandtransparentacrossgovernment.

Allotherproposedusesofbespokeorcustomisedsoftwareshouldbedecidedatagency

ExecutiveBoardleveltohelpensurethatadditionalcostsarejustifiedbytheincremental

benefitsoveraCOTS/GOTSapproach.Thisrecommendationreflectsthebestpracticealready

usedinsomeagencies.

IrecommendimplementingGate0oftheGatewayReviewprocessinordertobettertestpolicy

andimplementationoptionsofmajorprojectsatanearlystagebeforepoliciesarefinalised.

TheGatewayReviewoutcomeresultsshouldalsobeaninputintheNPPprocesstoimprovethe

informationavailabletoMinisterswhenconsideringNPPs.

FinanceshouldbuildonitsexistingtrainingandpolicyguidanceforSeniorResponsibleOfficials

tohelpthemdischargetheirroleandresponsibilities.

5.2.3. Identify a custodian of best practice in benefits realisation

IrecommendthatthePM&CCabinetImplementationUnit,inconsultationwithAGIMO,identifya

leadagencytobethecustodianofbestpracticeinbenefitsrealisationpractice,withresponsibilityto

promotebestpracticeandassistagenciestoimprovetheirbenefitsrealisationcapability.

TheSIGBcouldinvitetheidentifiedagencytoundertakethisroleandreviewonanannualbasis

whetheritshouldcontinuetobetheGovernment’sCentreofExcellence.

5.2.4. The Department of Defence and the Australian Intelligence Community to demonstrate to their relevant committees the measures taken to implement the approved recommendations arising from this review


5.3. RECOMMENDATION 3 – TIGHTEN THE MANAGEMENT OF ICT BUSINESS AS USUAL FUNDING

5.3.1. Target to move from 77:23% split between BAU and creation of new capability in 2007–08 to 70:30% in 2011–12

Asinitialstepstowardsthisgoal,Irecommendreducingthebusinessasusual(BAU)ICT

budgetsofthe28largeagencies30by15%onaveragefrom2007–08actuals(foralistof

agenciesrefertoAppendixF).Theintroductionofthisreductionshouldbephased,witha

5%averagereductioninthefirstyear,thebalanceinthesecondyearandtheaggregate

15%reductionsustainedinsubsequentyears.

Tohelptheseagenciesachieveorexceedthetargetreductionswithoutimpairingservice

deliverytocitizensandbusiness,IrecommendcreatingICTReviewTeamswhowillworkclosely

withagenciestovalidatetheagency-specifictargetforeachoftheselargeagencies.Thework

oftheICTReviewTeamswillinclude,butnotbelimitedto,identifyingthedriversofagencyBAU

costs,reviewingthelevelofserverutilisation,andtheefficiencyofdatacentreinfrastructure,

scopeforreducingserverproliferationandthesubsequentimpactondatacentres,andthe

planstoreducecontractors(seeRecommendation5.4.2)byusingcross-agencyandexternal

benchmarkcomparisonstoidentifyscopeforefficiencyimprovements.Iestimatethatseven

ICTReviewTeamswillberequiredtoconductthework,drawingonresourcesfromFinance’s

BudgetGroup,AGIMO,agencysecondeesandexternalexperts.

TopreparefortheworkoftheICTReviewTeams,Financewillneedtoleadasmallteam,

includingexternalexpertiseonICTefficiencymetricsandagencysecondees,onthe

developmentofacommonICTChartofAccounts,anddevelopandagreeasetofcommon

efficiencymetricstofacilitateon-goingcostreductionandbenchmarkingsothatthe

teamsandagenciescanworktoacommonmethodology.Thisactivityneedstocommence

immediatelysothattheICTReviewTeamscanbemobilisedinNovember2008toimpactthe

2009–10Budgetprocess.

Inaddition,IrecommendtargetingagencieswithtotalannualICTspendsbetween$2million

and$20milliontoachievea7.5%reductiononaverageoftheirBAUfrom2007–08actuals(for

alistofagenciesrefertoAppendixG).Theintroductionofthisreductionshouldalsobephased,

witha2.5%averagereductioninthefirstyear,thebalanceinthesecondyearandtheaggregate

7.5%reductionsustainedinsubsequentyears.

Boththe15%and7.5%targetsaremacro-leveltargets.Individualagencytargetswillneed

toreflecttheircurrentratiosofBAUtocreationofnewcapabilityspend.Thosewithratiosin

excessoftheaverageshouldhavetargetreductionsinexcessofthe15%or7.5%asappropriate.

30 Defence is excluded because it is already undertaking a program to find significant savings which can be reinvested in its front line capability.


The15%and7.5%reductionsintotalshouldsavetheGovernmentaround$140millioninthefirstyearandinexcessof$400millioninthesecondandsubsequentyears.Ialsorecommendthat50%ofthesavingsgeneratedbytheserecommendationsbetransferredtoacentralfundforreinvestmentinprojectstoimproveefficiencyandeffectivenessofICTBAUactivities,suchasreplacementoflegacysoftwareandhardwarewithhighsupportandmaintenancecosts.

Myrationaleforrecommendingtargetsatthislevelisbasedonthefollowing:

(a)ItisclearfromtheevidencethatBAUICTspendisnotingeneralsubjecttorobustscrutiny.

(b)Thevariationsinthemetricsrelatedtocostperdesktop,financialandHRmanagementsystemsareverywide,reflectthelackofscrutinyandindicatesubstantialscopeforefficiencygains.

(c)ItisreasonabletoassumethatasothercommonmetricsareappliedtoBAUspend,theywillalsodemonstrateverywidevariationsandsimilarsubstantialscopeforefficiencygains.

(d)Inmyexperience,whendetailedscrutinyisappliedtopreviouslyunder-scrutinisedareasofspend,savingsoftheorderIhaveproposedareachievableifreinforcedbyastrongmanagementfocusandbudgetaryconstraints.

AgenciesshouldalsoberequiredtodemonstrateinallfutureNPPsandinternallyfundedprojectsrequiringapprovalbythetwo-passinvestmentprocesshowtheyintendtoexploitexistingdatacentrecapacity,andexistinghardwareandsoftwareassets.

5.3.2. Develop common metrics and conduct benchmarking

ToimprovethepracticeandrigourinmonitoringtheeffectivenessofICTinvestments,IrecommenddevelopingasetofcommoneffectivenessmetricstofacilitatebetteruseofICTandregularbenchmarking.ThesemetricsaretobeagreedbytheBPTC.AnnualagencybenchmarkinganalysisbasedonthecommonefficiencyandeffectivenessmetricswillalsobeundertakenbyAGIMO,withanaggregatereportprovidedtotheSIGBandadetailedreportprovidedtoeachagencytoinformongoingimprovementsinefficiencyandeffectiveness.

5.3.3. Consider shared services carefully

Thereviewreceivedanumberofinputsfromindustryindicatingthesignificantbenefittobeobtainedfromsharedservices.Inrespectofbackofficeapplications,however,IalsoconsideredthemixedexperiencesreportedtousbytheCIOsofanumberofstatesandterritories,togetherwiththerecentexperienceoftheUKGovernmentasdescribedintheMay2008UKNationalAuditOfficereportShared Services in the Department for Transport and its Agencies.Inlightofthis,Ihaveconcludedthatmovestowardsbackofficesharedservicesbetweenagenciesshouldonlybeundertakenonaverycarefullyselectedandcontrolledbasis.Inthemeantime,asafirststeptowardsawideradoptionofthesearrangements,Iconsideritessentialthatallagenciesquantifyboththebackofficeservicelevelsandtheassociatedcostsoftheircurrentprovisionarrangements,andthattheyusethisasthebasisfordeterminingwhatimprovementscanberealisedthroughtheirownefforts,suchasprocesssimplificationandareductioninmanualinterventions.Thiswillhelpcreateastrongerfoundationonwhichtoassesstheadditionalbenefitsthatcanbeobtainedfrommovingtoasharedserviceinthefuture.

Chapter Five:Recommendations�0

5.4. RECOMMENDATION 4 – ENHANCE THE MANAGEMENT OF THE APS ICT SKILLS BASE

5.4.1. Recognise that there is a national and global competition for talent and the APS needs to recruit, develop and retain key ICT skills

ToaddresstheissuesaroundICTskillsshortages,thetalentattractionandretentionofICTskills

withintheAPSneedstobeimproved.Irecommendtwokeymeasures.

Firstly,thereneedstobethecreationofawhole-of-governmentICTcareerstructure,developed

byAGIMOinconsultationwiththeAustralianPublicServiceCommission(APSC)andPM&C.

ThiswillincludetraininganddevelopmentprogramsforICTprofessionalsinkeyskillsareas

(forexample,projectmanagementandsystemsarchitecture)andshouldutiliseexisting

taxpayerfundedinitiativeswhereverpossible(forexample,theDefenceMaterielOrganisation

projectmanagementtraining).

Secondly,awhole-of-governmentstrategicICTworkforceplanneedstobedevelopedand

maintained.TheplanwillbedevelopedandsupportedbytheAPSCandAGIMO,andwill

leveragetheworkdonebyotheragencies,suchastheAustralianTaxationOffice(ATO),ona

workforceplanningtool.AGIMOshouldconstructtheplanannuallybasedoninputsfrom

agenciesandrecommendtotheSIGBoptionsfordealingwithidentifiedskillsissues,including

recruitment,training,anddevelopmentinareasofskillsshortages.

Withthecombinationofacommoncareerstructureandaworkforceplan,itshouldbecome

mucheasiertoplantosmoothpeaksandtroughsofdemandforICTskillsinindividualagencies.

5.4.2. Reduce the total number of ICT contractors across the APS by 50% over the next 2 years and increase the number of APS ICT staff

Toreducetheover-relianceoftheGovernmentonICTcontractors,Irecommendreducingthetotal

numberofICTcontractorsacrosstheAPSby50%(fromthe2007–08actuals)overa2-yearperiod,

whilstsimultaneouslyincreasingthenumberofAPSICTstaff.ThisshouldsavetheGovernment

anestimated$100million(acrossbothBAUandproject-relatedwork).Thisisbasedonthe

replacementofexistingICTcontractorswithAPSstaffacrossarangeofAPSclassifications.

AscontractorsareusedonbothBAUandnewproject-relatedwork,thesavingsfromapplyingthis

recommendationtoBAUwillcontributetosavingsunderRecommendation5.3.1.Thebalanceof

thesavingswillbeincrementaltothesavingsarisingfromtheBAUreductiontargets.

Individualagencytargetswillneedtotakeintoaccounttheexistinglevelofuseofcontractors.

Asaguideline,agencieswherecontractorsformlessthan10%oftheirICTworkforceshouldnot

betargetedtoachieveafurtherreduction;agencieswithacontractorworkforceinexcessof

23%shouldbetargetedtoachievemorethana50%reduction.


Myreasonsforrecommendingatargetofthismagnitudeareasfollows:

(a)ThecombinationoftheCanberra-centricityoftheICTworkforceandtheoverallpercentage

ofcontractorsindicatesthatcontrolsandscrutinyoftheuseofcontractorsaregenerallytoo

weak,withtheexceptionofagenciesthathavelow(10%orless)contractoruse.

(b)Thisisexacerbatedbythelackofawhole-of-governmentprofessionalcareerstructurefor

ICTstaffandofworkforceplansthatenablepeaksandtroughsofdemandforICTskills

betweenagenciestobesmoothed.

(c)Inmyexperience,theintroductionoftightcontrolsovertheuseofcontractorsandbetter

recruitment,developmentandtrainingofemployeesmakessavingsofthemagnitudeIhave

proposedentirelyfeasibleifreinforcedbyastrongmanagementfocusand

budgetaryconstraints.

Iproposeatthemacrolevelthata20%reductionisachievedwithinthenext12monthsand

thebalanceinthesubsequent12months.

Thisrecommendationwillalsohelpfocusattentionatbothanagencyandwhole-of-

governmentlevelonthemanagementactionsrequiredtoattract,developandretainthe

appropriateskillswithintheAPS.

5.4.3. Larger agencies to demonstrate how they will develop/increase their capability to manage ICT work remote from Canberra and develop 5–10 year plans to reduce the Canberra-centricity of existing ICT activities

ToreducetheCanberra-centricityofexistingagencyICTactivities,Irecommendthatlarger

agenciesinduecourseberequiredtodemonstrateinNPPsandinternallyfundedprojects

requiringapprovalbythetwo-passinvestmentprocess,theircapabilitytolocatesignificant

portionsoftheworkoutsideCanberra,andtheintentiontodoso.

5.4.4. Examine whether current security vetting processes and tools lead to adverse consequences

Whiletheparticularsofthesecurityvettingprocessarebeyondthescopeofthisreview,there

isacaseforawhole-of-governmentprojecttocriticallyexaminequestionsaroundsecurity

vettingprocessesandtools,particularlyforhigh-volume,lower-levelclassifications,becauseof

theadverseconsequencesthecurrentclearanceprocessesarehavingoncostsanddeliveryof

ICTprojects.Aspartofthisprocess,anybestpracticesinthetransferofsecurityclearancesfor

ICTstaffacrossagenciesshouldbeidentifiedandpromulgated.Iamthereforerecommending

thattheSIGBestablishesaworkinggroupfromtherelevantpolicyagenciesandacrosssection

ofdeliveryagenciestoproduceproposalsforimprovingthecurrentsituation.


5.4.5. Equip organisational leaders to harness the potential benefits of ICT

TobetterequiporganisationalleadersonhowtoharnessthepotentialbenefitsofICTto

improvetheeffectivenessandefficiencyoftheiragency,IrecommendthattheAPSC,in

conjunctionwithAGIMO,arrangeappropriateeventsfororganisationalleaders.Thiscould

include,forexample,invitingguestspeakersfromtheprivatesectorandothergovernment

agenciesthathavesuccessfullyledmajorICT-enabledtransformationsintheirorganisation.

5.4.6. Establish a whole-of-government tele-working policy for ICT staff, building on existing AGIMO guidance

ToassisttheAPSinrecruitingandretainingICTskilledprofessionalsinanenvironmentwhere

‘green’workpoliciesplayanincreasinglyimportantroleinimprovingtheattractivenessofan

employertocurrentandfutureemployees,IrecommendthattheGovernmentestablisha

whole-of-governmentpolicyontele-working,buildingonexistingAGIMOguidance.

5.4.7. Sponsor annual awards to recognise outstanding professionalism in key ICT disciplines

TohelpraiseandrecognisetheprofessionalismofICT,theGovernmentshouldsponsor

annualawardstorecogniseoutstandingprofessionalisminkeyICTdisciplinessuchasproject

management,systemsarchitectureandsoftwaredevelopment.

5.5. RECOMMENDATION 5 – DATA CENTRES

5.5.1. Develop a whole-of-government approach for future data centre requirements over the next 10–15 years

Toaddressthefindingthatthereisnowhole-ofgovernmentstrategicplanfordatacentres,

Irecommenddevelopingawhole-of-governmentapproachfordatacentrerequirementsover

thenext10–15yearsthatwilltakeintodetailedaccountfactorsincluding,butnotlimitedto,

thefollowing:

• trendsincooling,weight,storagerequirementsandpower

• growthinspacerequirements

• availabilityrequirements31

• economicsofdifferentsizemoderndatacentres

• disasterrecovery

• geographiclocation.

31 The Uptime Institute’s Tier Classification System may be a helpful way for agencies to consider their future requirements over this planning period.


Inmakingthisrecommendation,Ishouldemphasisethatthisrelatesonlytothepotential

consolidationofthephysicaldatacentreinfrastructure,forexample,thebuildings,heating,

ventilation,air-conditioningandpowersupplyarrangements.Theprovenpracticeinexisting

sharedfacilitiesofkeepingagencies’ICTequipmentanddatabasesinseparatelycontrolledand

managedareasshouldbereplicatedinanyadditionalnewshareddatacentres.

ThisworkshouldbeledbyAGIMOwithagencysecondees,Finance’sBudgetGroup

representatives,andexternalspecialistexpertise.Theresultingapproachshouldthenbeputto

theSIGBforconsideration.

Pendingtheconclusionofthiswork,thereshouldbeafreezeonmajorupgradesto,and

replacementof,existingdatacentres.Exceptionstothisfreezeshouldbeapprovedbythe

SIGBwhowillneedtobesatisfiedthattheproposedprojectdoesnotcompromiseawhole-of-

governmentapproach.

5.6. RECOMMENDATION 6 – IMPROVE THE EFFICIENCY AND EFFECTIVENESS OF THE ICT MARKETPLACE

5.6.1. Make better use of the Government’s collective buying power

Asaninitialsteptowardsthisgoal,IrecommendoptimisingthenumberofICTpanel

arrangementsestablishedbyagenciesacrossgovernment.Thisincludestheintroductionof

whole-of-governmentpanelarrangementsforICTcommodity-basedprocurementswhere

trueeconomiesofscaleareachievable.Panelsshouldalsobewhole-of-governmentwhere

appropriate,butmaybeportfolio-basedwheretheywilldeliversuperiorvalue.Largeragencies

canusethesepanels,butiftheygetbetterpricesthroughotherprocurementchannels,then

thatpriceshouldbeleveragedasthewhole-of-governmentprice.

Next,IrecommendimprovingprocurementarrangementsforICTcommodityproductsand

services,andvolumesourcingarrangementsforkeyitemsofsoftware.Thisincludestheuseof

aggregatedarrangementsande-auctions,whereappropriate.Thesearrangementsshouldbe

subjecttoMinisterialapproval,includingagencyopt-out,inlinewiththeGovernment’sexisting

approvalarrangementsforcoordinatedprocurement.

Third,IrecommendimplementingthestrategicmanagementofkeyICTsuppliers.The

definitionof‘keysuppliers’inthiscontextdoesnotjustrelatetothedollarvalueofbusiness

butcanalsorelatetothecriticalityofwhatissupplied.Strategicmanagementofkeysuppliers

encompassesgreaterintelligencegatheringonindustryhealthtoinformproactivegovernment

stancesfordealingwithincreasesinthedominanceoflargesuppliers,bankruptcies,mergers

andacquisitions,etc.Toassistinthis,theprocessesandtoolsdevelopedbytheUKGovernment

inthisareamayhelptokick-startthisactivity.


5.6.2. Work with industry to develop client and supplier codes of conduct with agreed escalations for non-compliance

TohelpimprovetheoperationofthegovernmentICTmarketplace,Irecommenddeveloping

clientandsuppliercodesofconductwithagreedescalationsfornon-compliance.

Asastartingpoint,theclientcodeshould:

• Include,interalia,adherencetoGovernmentpoliciesonIPandliability,rapidtransferability

ofsecurityclearances,sensitivitytothecostsincurredbyindustryinbiddingforcontracts,

avoidanceofprescriptiverequirements,andwillingnesstoengagewithindustryonalevel

playingfieldbeforecommencementoftheformalprocurementprocessformajorprojects.

• Forsignificantnon-commodityICTprocurements,stronglyencouragethatselective

sourcingoptionsshouldalwaysbeconsideredforthecontractingofseveralsmallerwork

packagesinsteadofasingle,largeworkpackagetoincreasetherangeofpotentialsuppliers,

reducedependenceonverylargeprimesuppliers,andincreasethelikelihoodofobtaining

bestinclassofferings.

• Encouragequalityengagementwithindustryonsignificantnon-commodityprocurements

priortothecommencementoftheformalprocurementprocess.Forexample,agencies

couldhostindustryforumsonforwardintentions.

• RequiretheuseofappropriatelytrainedandexperiencedAPSICTprocurementspecialists.

IndustryshouldconsideriftheSupplierCodeofConductdevelopedbyIntellectinresponseto

concernsofUKGovernmentclients,representsausefulstartingpointforanAustraliancode.

IbelievetherewouldbemeritifGovernmentandindustryconsultedwitheachotherduringthe

developmentoftheirrespectivecodes.

5.6.3. Determine if the Government’s current policy on IP is a significant barrier to entry and a cost driver

GiventhatthepositiontakenbyagenciesonIPisseenasadeterrentbyICTsuppliers,I

recommendthattheGovernmentdetermineifitscurrentpolicy,oritsimplementationby

agencies,onIPisasignificantbarriertoentryandacostdriver.Thisactivityshouldbeledby

theAttorney-General’sDepartmentwithinvolvementbyotherinterestedpolicydepartments

(forexample,theDepartmentofInnovation,Industry,ScienceandResearchwithitsinterest

inSMEs)andseekinputfromindustryandacross-sectionofagencies.Conclusionsand

recommendationsshouldthenbeputtotheMinisterialCommitteeforapprovalafter

considerationbytheSIGB.


5.6.4. Integrate the Government’s ICT and SME policies so that they are mutually reinforcing

ToaddresstheissuesandconcernshighlightedbySMEs,theGovernmentshouldensurethat

itsICTandSMEpoliciesaremutuallyreinforcing.IrecommendthattheMinisterialCommittee

commissionastudyinvolvingtherelevantpolicyagencies,across-sectionofuseragenciesand

representativeindustrybodiestoidentifyoptionsformutualreinforcementofthesetwopolicies.

5.6.5. Consider if the Australian Government is getting a net benefit from the $80,000 open tender threshold under the FTA

The$80,000thresholdis:

• significantlylowerthanthethresholdinCommonwealth Authorities and Companies

Act 1997agenciesandotherjurisdictions,forexample,Australianstateandterritory

governments,andtheEuropeanUnion

• seenasasignificantburdenbyagenciesandmanysuppliers.

Inlightofthis,IrecommendthatareviewisledbytheDepartmentofForeignAffairsandTrade

toestablishwhetherAustraliaisgainingnetbenefitfromthecombinationofthedomesticand

exportaspectsoftheAustralia–USFreeTradeAgreementandreporttheoutcometoMinisters.

5.7. RECOMMENDATION 7 – SUSTAINABILITY OF ICT

5.7.1. Develop a whole-of-government ICT sustainability plan (in conjunction with Department of the Environment, Water, Heritage and the Arts (DEWHA)) to manage the carbon footprint of the Government’s ICT activities

TobetteraligntheGovernment’soverallsustainabilityagendaanditsabilitytounderstand

itsenergycostsandthefootprintofitsICTestate,IrecommendthedevelopmentofanICT

sustainabilityplan.

TheICTsustainabilityplanshould:

• identifywhichoftheavailablestandards(forexample,EPEAT™)shouldbeadoptedas

mandatoryforrelevantICTacquisitions(therequirementtopurchasegreenICTequipment

shouldbeincorporatedintotheclientcodeofconductasdetailedunderRecommendation5.6.2)

• includeawhole-of-governmentICTenergytarget,withagenciestoreporttheirprogress

towardsthetarget

• takeintoaccountpotentialimplicationsofacarbonpollutionreductionscheme.


Ialsorecommendthatlargeagencies(withICTspendsinexcessof$20million)developan

ICTenergyefficiencyplanthatcanbeeitherpartofawideragencyenergyefficiencyplan,or

freestanding.Asapriority,agenciesshouldmeasuretheirdatacentreenergyefficiency(which

mayrequiretheinstallationofelectricitymetersinsomeinstances).Agenciesshouldalso

includeintheirplanatargetenergyusage,includingthepowerusageeffectiveness32oftheir

datacentres.

LargeragencieswillneedtoundertakeaperiodicindependentICTenergyassessment.Subject

toagreementbytheDepartmentoftheEnvironment,Water,HeritageandtheArts(DEWHA),

agencyplanswillalsobeindependentlyassessedbyDEWHA,withresultsoftheassessment

reportedtotheMinistersforFinanceandDeregulation,andResourcesandEnergy.Reporting

ofprogressagainsttheplan,shouldbeinawaythatisconsistentwithotherreporting

requirementssuchastheNationalGreenhouseandEnergyReportingFramework.

WhenprocuringnewICTproductsandservices,itisimportantthatagenciesconsidertheirimpact

ontheenvironment.AGIMO,inconjunctionwithDEWHA,shoulddevelopagreenICTprocurement

kittosupportagenciesregardingenvironmentalissuesinrelationtoICTproductsandservices.This

shouldincluderawmaterialacquisition,manufacture,distribution,useanddisposal.

5.7.2. Identify green ICT quick wins

Intheinterim,AGIMOshouldidentifyapossiblelistofquickwinsinthisarea,suchassoftware

controlledautomaticturn-offofPCs,basedonthebestpracticesalreadyadoptedbysome

agenciesandintheprivatesector.

32 Power usage effectiveness (PUE) is a metric used to determine the energy efficiency of a data centre. PUE is determined by dividing the amount of power entering a data centre by the power used to run the computer infrastructure within it. PUE is therefore expressed as a ratio, with overall efficiency improving as the quotient decreases toward 1. PUE was created by members of the Green Grid, an industry group focused on data centre energy efficiency: http://www.thegreengrid.org/gg_content/Green_Grid_Metrics_WP.pdf

Chapter Six:Implementation ��

chaPteR �: imPlementationAcceptanceofmyrecommendationswillleadtoamajorprogramofadministrativereformand

culturalchange.Foranysuchprograminthepublicorprivatesector,successfulimplementation

isnotaforegoneconclusion.Basedonmyexperienceofcreatingsustainablechangeinthe

UKpublicsector,therearetwocriticalrequirementswhichwilldeterminethesuccessofthe

proposedprogram:first,sustainedleadershipanddriveatMinisterialandtopofficiallevels;

second,ensuringtheenablersofchangeareproperlyresourcednotonlyinfundingtermsbut

alsoskillsoftherightcalibre.

OncetheMinisterialCommitteehasbeenestablishedandastrongmandategiventothe

Secretaries’ICTGovernanceBoard(SIGB),itwillbeimportantthattheearlydecisionsofthese

twobodiessendoutclearsignalsaboutthepaceanddirectionofchange,andthatthisisthen

reinforcedthroughtheirsubsequentdecisions.

However,itwillalsobeessentialtoensurethatwhole-of-governmentICTapproachesand

arrangementsare‘fitforpurpose’beforetheyareapprovedandimplemented.Thiswillrequire

agenciestobefullyinvolvedinthedevelopmentofwhole-of-governmentICTinitiativesand

forappropriateconsultationtotakeplacebeforeapproval.Whereagenciesareaskedtotakea

leadroleintheacquisition,developmentoroperationofwhole-of-governmentICTapplications,

infrastructureorsystems,thegovernancearrangementswillneedtoensurethereissufficient

fundingandthattherequirementsarespecifiedtomeetthebusinessneedsofallpotentialusers.

ShouldtheGovernmentacceptmyrecommendations,Irecommendthatanindependent

reviewofprogressbeundertakeninthefirstquarterof2010.

Theremainderofthischaptersetsoutaproposedimplementationplanandschedulebasedon

theassumptionthattheGovernmentapprovesalltherecommendationsinNovember2008.

Chapter Six:Implementation��



Recommendation 1 – Strengthen pan-government governance

Activity Responsibility Due date Benefits 5.1.1 Establish a Ministerial

Committee on ICT PM&C (supported by Finance)

Nov 2008 Clearer alignment of ICT with government policies and outcomes

5.1.2 Create a Secretaries' ICT Governance Board (SIGB)

AGIMO Nov 2008 Whole-of-government ICT governance that defines the ICT strategies in agreed areas

5.1.3 Develop whole-of-government opt-out criteria from agreed activities, for approval by the Ministerial Committee

AGIMO Mar 2009 Opt-out decisions taken from a whole-of-government perspective. Full benefits from whole-of-government activities are derived

5.1.4 Redefine AGIMO’s role SIGB Jan 2009 Proactive lead role in Government ICT. Coordinate whole-of-government approaches with lead agencies. Realise economies of scale and reduce duplication across agencies

5.1.5 Establish a Program Board PM&C, Finance and AGIMO

Nov 2008 Effective and efficient governance overseeing the implementation of review recommendations and ensuring that the benefits are realised

High priority Medium priority Low priority

33 These are indicative costs only. Any costs under $100K have not been included. In developing a future resourcing plan agencies will need to determine whether further funding will be required for these activities.

Recommendation 1 – Strengthen pan-government governance




Recommendation 2 – Strengthen agency governance

Activity Responsibility Due date Benefits

5.2.1

a

Improve agency capability

Develop a common organisational capability methodology, undertake three pilots and assess the results

CabinetImplementation Unit, AGIMO and agencies

Sep 2009

b Roll out common organisational capability methodology across 28 large agencies and provide ongoing support

Agencies Sep 2010

c Large agencies to propose a target level of organisational capability that is independently validated, and develop a capability improvement plan

Agencies Dec 2010

Greater alignment of agency capability and IT investment. Increased likelihood of successful outcomes of projects as agencies undertaking these projects have a much better understanding of their capabilities. The Government is less likely to approve funding for new projects where agencies are not able to demonstrate a corresponding capability

d Develop and implement a ‘lite’ methodology for smaller agencies

AGIMO Jun 2010

e Agencies to undertake self assessment of organisational capability biannually to compare their actual capability against their target capability

Agencies Sep 2012

5.2.2 Strengthen the link between policy formulation and implementation

a Include agency capability assessment in the two-pass investment approval process

AGIMO Dec 2010 Alignment of agency capability and IT investment for 2011–12 Budget process

b Develop guidance on relative costs and benefits of COTS/GOTS

AGIMO Mar 2009 Transparent decision making, understanding the full life costs and future liability

c Implement Gate 0 Gateway reviews and integrate Gateway Review outcomes into NPP process

Finance Mar 2009 Improved investment decision-making and better planning/articulation by agencies of project outcomes and benefits

d Build on existing training and policy guidance for Senior Responsible Officials

Finance Jun 2009 Improved governance/ management of projects through greater understanding by SROs of their responsibilities

5.2.3 Identify a custodian of best practice in benefits realisation

CabinetImplementation Unit and AGIMO

Jan 2009 Improved management of benefits realisation by agencies through provision of practical advice and support to help agencies develop capability in this area


Recommendation 2 – Strengthen agency governance

Chapter Six:Implementation�0



Recommendation 3 – Tighten the management of ICT business as usual funding


5.3.1 Target to move the split between BAU and creation of new capability through the following:

a Develop and agree a methodology, a common ICT chart of accounts and a common set of efficiency metrics

Finance Oct 2008

b Deploy ICT Review Teams to assist agencies identify reductions (phase 1). Seven teams to support 28 large agencies

Finance,includingexternalresources and agencysecondees

Mar 2009 Savings of approx $400M over 2 years, with release of resources for investment in developing new capability, as opposed to running the business. Inculcation of a culture of efficiency and cost-sensitivity within agencies

c Deploy ICT Review Teams (phase 2). Seven teams to support 28 large agencies

Sept 2009

d Assist smaller agencies to achieve target savings

Finance Dec 2009

5.3.2 Develop effectiveness metrics AGIMO/lead agencies

Jun 2009 Potential for savings by identifying areas where agencies’ performance is not effective, through meaningful comparisons/ benchmarking across agencies

Undertake annual benchmarking exercise AGIMO Dec 2009


Recommendation 3 – Tighten the management of ICT business as usual funding

a

b Annual benchmarking exercise




Recommendation 4 – Enhance the management of the APS ICT skills base

Activity Respon-sibility

Due date Benefit

5.4.1 Create a whole-of-government ICT career structure

Develop a whole-of-government strategic ICT workforce plan

APSC, PM&C, AGIMOand lead agencies

Mar 2010

Mar 2010

Better managed workforce – reduced costs and less delays for ICT projects. Improved staff retention also brings secondary benefits such as retaining corporate knowledge

5.4.2 Reduce total APS contractors and increase the number of APS ICT staff

Agencies Oct 2010

5.4.4 Examine current security vetting processes and identify best practice

SIGB and AGD (PSPC)

Sep 2009 Reduced transaction costs and facilitation of transfer of resources between agencies

5.4.5 Equip organisational leaders’ to harness the potential benefits of ICT

APSC and AGIMO

Jun 2009 Promotion of greater understanding of ICT issues at senior levels of agencies will facilitate a more strategic focus on ICT and increased alignment with business priorities

5.4.6 Establishment of a whole-of-government tele-working policy

AGIMO Sep 2009 Assists with recruitment and retention making the government an attractive employer of ICT staff

5.4.7 Sponsorship of annual ICT awards APSC and AGIMO

Sep 2009 Making government employment more attractive through encouragement to ICT practitioners


Recommendation 4 – Enhance the management of the APS ICT skills base




Recommendation 5 – Data centres

Activity Responsibility Due date Benefit

5.5.1 Develop a whole-of-government data centre strategy

AGIMO and lead agency secondees

Sep 2009 Avoidance of a significant future cost through a coordinated approach to acquisition of data centre space as agencies currently have autonomous arrangements


Recommendation 5 – Data centres




Recommendation 6 – Improve the efficiency and effectiveness of the ICT marketplace


5.6.1 Make better use of the Government’s collective buying power:

a Optimise the number of ICT panel arrangements established by agencies across government, including improving procurement arrangements for commodity products and services and volume sourcing arrangements for key items of software

Finance and agencies

Sep 2009 Reduce administrative and transaction cost

b Develop and implement e-auctions


Dec 2009 Reduced costs to agencies through harnessing government collective purchasing power

c Implement strategic management of key ICT suppliers

Finance and AGIMO

Sept 2009 Will enable a whole-of-government (single customer) perspective on key suppliers, with potential savings through coordinated approaches to suppliers, more responsive supplier performance through relationship-building and proactive consideration of developments in the vendor market

5.6.2 Work with industry to develop client and supplier codes of conduct

AGIMO and industry

Dec 09 Increased transparency and accountability in government procurement. More efficient market through entry of new vendors. Improve industry and government relationship

5.6.3 Reassess current IP policy AGD, AGIMO and lead agencies

June 09 Potential for reduced costs to agencies since vendors are able to grow revenue through leveraging IP

5.6.4 Integrate the Government’s ICT and SME policies


Sep 2009 More efficient market through facilitation of entry of SME suppliers

5.6.5 Consider the net benefit from the A$80K threshold under the Free Trade Agreement

DFAT Sep 2010 Potential for reduced transaction costs for agencies and suppliers through a decrease in the number of tender processes


Recommendation 6 – Improve the efficiency and effectiveness of the ICT marketplace




Recommendation 7 – Sustainability of ICT


5.7.1 Develop a whole-of-government ICT sustainability plan

AGIMO, DEWHA and agencies

Dec 2009 Contribute to the government’s overall agenda to manage carbon emissions, and reduced rate of growth in energy costs

b Agencies to develop an ICT energy efficiency plan

Agencies Mar 2010

c Develop Green ICT Procurement Kit

AGIMO Dec 2009

5.7.2 Green ICT quick wins AGIMO Mar 2009 Enables energy efficiency savings and builds momentum for a whole-of-government initiative







5.7.1 Develop a whole-of-government ICT sustainability plan

AGIMO, DEWHA and agencies

Dec 2009 Contribute to the government’s overall agenda to manage carbon emissions, and reduced rate of growth in energy costs

b Agencies to develop an ICT energy efficiency plan

Agencies Mar 2010

c Develop Green ICT Procurement Kit

AGIMO Dec 2009

5.7.2 Green ICT quick wins AGIMO Mar 2009 Enables energy efficiency savings and builds momentum for a whole-of-government initiative


Chapter Six: Implementation 85

Implementation activities fall into two broad categories: Those enabling activities which are one off and need to be undertaken at the beginning of or early in the implementation phase (e.g. the development of efficiency metrics), and those activities that are ongoing (e.g. the implementation and ongoing use of efficiency metrics). In most cases an ongoing activity is preceded by an enabling activity.

Chapter Six: Implementation86

Appendices ��

aPPendicesA TERMS OF REFERENCE

Review of the Australian Government’s use of Information and Communication Technology

1. ThereviewwillexamineandreportontheeffectivenessandefficiencyoftheAustralian

Government’scurrentuseofinformationandcommunicationtechnology(ICT)to

determinewhethertheGovernmentisrealisingthegreatestreturnfromitsinvestments

inICT,includingthewayinwhichICTcanbeusedtomeettheGovernment’sbroader

objectives,aswellasanarrowerfinancialreturn.Thereviewwillexaminewhetherwehave

therightinstitutionalarrangementsinplacetomaximisethereturn,andthemeansby

whichthereturnmightbeincreased.

2. Indeterminingthis,thereviewwillconsiderthefollowingissues:

a. howICThasbenefitedtheoperationsofgovernmentandhowthatbenefitismeasured;

b. theadequacyofcurrentcoordinationofICTbusinessplanningandinvestmentdecision-

makingprocessesandtheoptionsforandbenefitsofastrongerICTframeworkand/or

greatercoordinationifcurrentarrangementsareinadequate;

c. theexistingICTinvestmentsofagenciesandwhetherthereareopportunities

tomaximisetheuseofnewandexistingICTinvestmentsinordertomeetthe

Government’sbroaderobjectives;

d. thepossibleduplicationofICTsystems(suchasfinancialandhumanresource

management)acrossgovernmentagencies,whetheropportunityexiststoconsolidate

existingornewsystems,andwhatformanyconsolidationshouldtake;

e. theduplicationofbusinessprocessesacross,andwithinagencies,andtheeffectsthis

hasonthecoststogovernmentandthequalityofservicedelivery;

f. barriersposedbyexistinglegacyICTinvestmentsacrossagenciesandthepotentialfor

moreconsistencyinnewinvestments;

g. howagenciesmanagetheirstaffingrequirementsforICTprojects,whetherthereare

opportunitiestoimprovetheefficientuseofstaffandcontractresources,andwhether

competitivepressuresaredrivingupcosts;

h. theexistingICTgovernanceframeworkthatguidestheAustralianGovernment’suseof

ICTtodelivergovernmentoutcomes;

i. thepossibleroleoftheDepartmentofFinanceandDeregulation,orasimilarcentral

body,incontributingtomoreefficientandeffectiveuseofICTacrossgovernment;and

j. anyothermattersastheyarise,inconsultationwiththeMinisterforFinance

andDeregulation.

Appendices��

3. Tocollectrelevantinformationontheaboveissues,thereviewwillfocusontheuseofICTin

selectedAustralianGovernmentagenciesthatareamixoflargeandsmallusersofICT.

4. ThereviewwillprovideasnapshotofthecurrentstateofICTintheAustralianGovernment,

whatexistsandhowitismanagedtodeliverGovernmentobjectives.

5. ThereviewwillhaveregardtothebestpracticeapproachesofotherAustralianand

internationaljurisdictionsandtheprivatesector.

6. Thereviewwillalsohaveregardtoplannedworkonwhole-of-governmentICTprocurement.

7. ThereviewmustprepareareportfortheMinisterforFinanceandDeregulationby

September2008.ThereportshouldsetoutrecommendationstotheAustralian

GovernmenttodrivegreaterefficiencyintheuseofICTacrossgovernmentwhileenhancing

orimprovingthecapacityofICTtosupportserviceandprogramdelivery.

8. InformulatingrecommendationsthattheAustralianGovernmentshouldtakeaparticular

courseofaction,thereviewshouldassesstheresourcing,costs,benefitsandany

implementationrisksofthataction.

Appendices ��

B SUBMISSION QUESTIONS

Letter to Agencies

Independent Review of the Australian Government’s use of ICT

YouwillbeawarethatIhavebeenaskedbytheMinisterforFinanceandDeregulation,

theHon.LindsayTannerMP,toundertakeonbehalfoftheAustralianGovernmentan

IndependentReviewoftheAustralianGovernment’suseandmanagementofinformationand

communicationtechnology(ICT).

TheMinisterhasaskedmetoexamineandreportontheefficiencyandeffectivenessofthe

AustralianGovernment’scurrentuseandmanagementofICTtodeterminewhetherthe

GovernmentisrealisingthegreatestreturnfromitsinvestmentsinICT.Thisincludestheways

inwhichICTcanbeusedtomeettheGovernment’sbroaderobjectivesandthemeansbywhich

thefinancialreturntoGovernmentmightbeincreased.

Iparticularlywelcomethisopportunitytogainyourviewsontheissuesraisedbythereview’s

TermsofReference(seeAppendixAofthisdocument)andontheopportunitiestoincrease

theefficiencyandeffectivenessofthegovernment’suseofICT.Ihaveseparatelyrequestedthe

ICTReviewSecretariatthatislocatedinthedepartmentofFinanceandDeregulationtoseek

moredetaileddataonyourICTspend,bothonassetsandongoingexpendituresothatImight

constructaclearpictureofhowICTisusedcurrentlytodelivergovernmentservices.

Specifically,Iwouldbeverygratefulifyoucouldprovidemewithawrittensubmissioncovering

thefollowing:

• Whatarethestrategicprioritiesofyouragency,andhowdotheseprioritiesinformyourICT

strategyanddecisionsaboutyourICTinvestments?Whatareyourviewsonthecurrentand

futureimportanceofICTtoyouragency?HowdoyouprioritiseyourICTenabledprojects

andprogramsandresourceallocation(bothmoneyandpeople)?

• HowyoumeasurewhetheryourICTinvestmentsaremeetingtheirplannedoutcomes

andyourstrategicgoals?CanyouprovidedetailsofthemostrecentfivetotenmajorICT

enabledprojectsyouhaveundertakenandhowyoumeasuredtheirsuccessintermsofcost,

time,specificationanddeliveryofanticipatedbenefits?

• Howyoumeasureyourorganisation’scapabilitytocommission,manageanddeliver

successfulICTenabledprograms(i.e.frompolicydevelopmenttorequirementsspecification

todeliverytobenefitrealisation)?Whatisyourassessmentofyourcurrentcapability?Can

youprovidedetailsofanyplanstoimproveorincreasethatcapability?

• HowyouensurethatICTspend(bothoperatingandcapital)isasefficientandeffective

aspossible,andcanyouprovidedetailsoftheperformancemetricsthatareused?Can

youalsoprovidedetailsoftheperformancemetricsyouusetomeasuretheefficiencyand

Appendices�0

effectivenessofyourICTfunction(includingprioryear,currentyear,andtargetmeasures)?

Canyouprovidedetailsofanyplanstoincreasetheefficiencyand/oreffectivenessofyour

ICTfunctionandspend?

• CanyouprovidedetailsoftheriskmanagementprocessyouapplyforICTenabledprojects

andprograms?

• CanyouprovidedetailsofareasofbestpracticeappliedtothemanagementofyourICT

environmentthatcouldbesharedacrossgovernment?

Iamalsointerestedinyourviewsonthecurrentwhole-of-governmentarrangementsthatare

inplacetoguidetheAustralianGovernment’suseandmanagementofICT.Myunderstanding

isthattheDepartmentofFinanceandDeregulationcooperativelydevelopsvariousframeworks,

policies,standardsandsomecentralisedICTprocurementarrangementsthatseektoencourage

greatersharingandre-useofICTassetsandachievebestvalueformoney.Couldyouplease

indicatetheusefulnessofthese,youragency’sownlevelofuse,andanyissuesthatimpedeuse.

IwouldbemostgratefulifyoucouldprovideyourwrittensubmissiontotheICTReview

SecretariatatICTReview@finance.gov.au.Ifyouareabletoprovideanyofthematerialby

theendofMay,thiswouldbemuchappreciated.Iwouldappreciatefinalsubmissionsby

Friday13June2008,coveringthequestionsIhaveraisedandanyotheroptionsyouseeto

improvetheefficiencyandeffectivenessoftheGovernment’suseofICTincludingbarriersto

theiradoption.IrealisethatthistimetablewillbetightbutIdonotbelievetheseinformation

requestsshouldbeveryonerousifsoundgovernancearrangementsarealreadyinplace.This

willnotbethefinalopportunitytoinputtothereview,butthebasicinformationprovidedin

submissionsbythisdatewillenablemetoassembleareasonablycomprehensivepictureofICT

intheAustralianGovernmentinordertoinformfurtherdiscussionsandinvestigation.Itismy

intentiontoholdbilateralmeetingswithsomeagenciesandotherstakeholdersaftertheinitial

writtensubmissionshavebeenreceivedandanalysed.

Inthemeantime,theICTReviewSecretariatcanbecontactedon0262152524foranyqueries

regardingthisletter.

Yourssincerely

SirPeterGershon

Appendices ��

Letter to Industry

Independent Review of the Australian Government’s use of ICT

YoumaybeawarethatIhavebeenaskedbytheMinisterforFinanceandDeregulation,the

Hon.LindsayTannerMP,onbehalfoftheAustralianGovernment,toundertakeanIndependent

ReviewoftheAustralianGovernment’suseandmanagementofinformationandcommunication

technology(ICT).

IhavebeenaskedtoexamineandreportontheefficiencyandeffectivenessoftheAustralian

Government’scurrentuseandmanagementofICTtodeterminewhethertheGovernmentis

realisingthegreatestreturnfromitsinvestmentsinICT.ThisincludesthewaysinwhichICTcanbe

usedtomeettheGovernment’sbroaderobjectivesandthemeansbywhichthefinancialreturnto

Governmentmightbeincreased.

Iparticularlywelcomethisopportunitytogainyourviewsontheissuesraisedbythereview’sTerms

ofReference(seeAppendixAofthisdocument).Specifically,Iwouldbeverygratefulifyoucould

providemewithawrittensubmissioncoveringthefollowing:

• Whereyouthinkthataggregationorstandardisationwoulddriveeconomiesofscalebenefitsfor

theAustralianGovernment;

• WhethertheGovernment’srequirementsinhibittheuseofCommercialOfftheShelfproducts

withoutcustomisation;

• HowyouratetheAustralianGovernmentcomparedto:

o yourothergovernmentclientselsewhereintheworld(ifrelevant)

o yourAustralianprivatesector,stateandlocalgovernmentclients;and

• Whetherthereareanykeybestpracticetechniqueswhich:

o theAustralianGovernmentalreadyhasbuthasn’tfullydeployed;

o areutilisedelsewhereinAustraliaorinternationallywhichtheAustralianGovernment

shouldadopt.

IwouldbemostgratefulifyoucouldprovideyourwrittensubmissiontotheICTReviewSecretariat

atICTReview@finance.gov.aubyFriday30May2008coveringthequestionsIhaveraisedandany

otheroptionsyouseetoimprovetheefficiencyandeffectivenessoftheGovernment’suseand

managementofICTincludingbarrierstotheiradoption.Itismyintentiontoholdbilateralmeetings

withasmanyindustrystakeholdersandrepresentativebodiesaspossibleaftertheinitialwritten

submissionshavebeenreceivedandanalysed.

PleasecontacttheICTReviewSecretariaton(02)62152524shouldyouhaveanyquestionsabout

thismatterorthereview.

Yourssincerely

SirPeterGershon

Appendices��

C SURVEY INSTRUMENT

Survey approach

Thereviewsurveywasissuedtoall100CommonwealthGovernmentAgenciesthatwere

regulatedbytheFinancial Management and Accountability Act 1997(FMAAct).Ofthe

identifiedagencies,fourwereexemptfromprovidingareturnasagreedwiththeSecretariat

(includingtwonationalsecurityagencies),fivesmallagenciesdidnotprovidearesponse

(theseagencieswereinsignificantinsizeanddidnotdetractfromthecomprehensivenature

ofthedatacapturedfromagenciesthatresponded),andafurthereightagencies’returnswere

incorporatedwithinanother(lead)agencyreturn.

Intotal,86returnswerereceivedcovering91agenciesandenteredintothesurveydatabase.

Threeofthe86returnswerefromagencieswhichareincorporatedwithinotherFMAAct

agencies.Oneoftheseoperatesrelativelyautonomouslyandhasbeentreatedasaseparate

agencyforthepurposesofthesurveyanalysis.Theothertwohaverecentlybeenincorporated

intoanotheragencyandthetreatmentoftheseagenciesvariesdependingonthenatureofthe

analysis.Forexample,theyhavebeentreatedasonelargeagencyforthepurposesofanalysing

totalICTspend,buttreatedasthreeagencieswhenlookingatthelevelofcustomisationof

financialandhumanresourceinformationmanagementsystems.

Thecompletedresponsesweregroupedviathesizeoftheagencyandprovidedthefollowing

sizeprofile:

• Large:agencies(includingDefence)withover$20millionofICTspendin2007–08

(29intotal)

• Medium:agencieswithbetween$2millionand$20millionofICTspendin2007–08

(26intotal)

• Small:agencieswithlessthan$2millionofICTspendin2007–08(29intotal).

TheABS2002–03GovernmentTechnologySurveystructurewasusedasabaseforthesurveyand

expandedtocapturedetailedinformationonspecificareasofinterestforthereview.Theadditional

areasincludedinthesurveywerewebsites,desktops,telecommunications,financialmanagement

informationsystems,humanresourcemanagementinformationsystemsandgrantsmanagement

systems.OtherspecificsurveyareasincludedICTenergyandICTstaffingresources,wherethe

surveycapturedinformationoneachagency’sprofileandemploymentmetrics.

Asmallagencysurveywasprovidedtoalimitednumberofagenciesthathad50orlessstaffin

ordertominimisetheimpactofthesurveyontheseagencies.

Appendices ��

Survey sections

Thesurveyinstrumentwasstructuredineightsectionsrepresentedbyseparateworksheets,

withinthesurveyworkbook,describedinmoredetailbelow:

Introduction(includinggeneraldefinitions)

Part1 AgencyICTprofile

Part2 Employmentmetrics

Part3 Expenseitems(focusingprimarilyonsalariesandwagesandcontractorcosts)

Part4 Otheroperatingexpenses

Part5 Capitalexpenditure

Part5a Capitalexpenditureonsoftwaresystems

Part5b Capitalexpenditure–majorICTinvestments

Part6 Generalquestions(capitalexpendituredetails,financialmanagementinformation

systems,humanresourcemanagementinformationsystems,grantsmanagement

systems,websitesandtelecommunications

Part6a(i)Communications–contractdetails

Part6a(ii) Communications–connectiondetails

Part6a(iii) Communications–pricingdetails

Part6b Grantmanagementsystemdetails

Part6c Websitedetails

Part6d MajorITcontracts

Part7 ICTstaffingprofile

Part7a Resourcepayprofile

Survey return completion and sign-off

Eachsectionconcludedwithafree-formcommentaryboxwhichprovidedagencieswithan

opportunitytoprovideexplanationsand,specifically,todetailadditionalinformationrelating

tounusualcircumstancesthatmeantanswerstoquestionsneededtobeinterpretedinthe

correctcontext;andmajorone-offvariationstoactivitylevelsorcosts.

Appendices��

Survey addendum

Duringthesurveycompletionperiod,additionalinformationrequirementswereidentifiedthat

wereconsideredimportanttotheanalysisofthesurveydata.Asaresult,asurveyaddendum

wasdistributedtoallrespondents.Theaddendumrequiredseparateanddiscretedatatobe

reportedinadditiontotheoriginalsurveyinstrument.Thesurveyinstrumentaddendumwas

structuredinfivesectionsreflectingextensionsandadditionstotheoriginalsurveyinstrument:

Part8 Staffexpense,operatingexpenseandcapitalexpenditure–Businessasusual

andproject

Part9 Depreciation

Part10 Networkgatewaydetails

Part11 Resourceprofile

Part12 Resourcepayprofile

Completion and treatment

Thesurveywasreleasedon19May2008andwastobecompletedandsubmittedtotheReview

Secretariatby18July2008.Ahelpdeskwasprovidedtoassistallagencieswithanyissues

associatedwiththesurveyresponse.

Thesmallagencysurveywasdistributedtoselectedsmallagencieson27May2008,withthe

samecompletiondateof18July2008.

Thesurveyaddendumwasdistributedon13June2008andwastobecompletedand

submittedby18July2008.

Noextensionstothecompletiontimewereprovided.

Additional data collection

Inadditiontothedatasurvey,alimitedsurveyofdatacentreswasundertakenwith16ofthe

largestFMAActagencies,andtheAIIAkindlyundertook,atthereview’srequest,alimited

surveyofitsSMEmembers.

Appendices ��

D SUBMISSIONS RECEIVED

Within Australian Government

Attorney-General’sDepartment(AGD)

AustralianAgencyforInternationalDevelopment(AusAID)

AustralianBureauofStatistics(ABS)

AustralianCommunicationsandMediaAuthority(ACMA)

AustralianCompetitionandConsumerCommission(ACCC)

AustralianCrimeCommission(ACC)

AustralianCustomsService(ACS)

AustralianElectoralCommission(AEC)

AustralianFederalPolice(AFP)

AustralianNationalAuditOffice(ANAO)

AustralianPublicServiceCommission(APSC)

AustralianSecuritiesandInvestmentsCommission(ASIC)

AustralianSportsCommission(ASC)

AustralianTaxationOffice(ATO)

AustralianTradeCommission(Austrade)

BureauofMeteorology(BOM)

ComSuper

DepartmentofAgriculture,FisheriesandForestry(DAFF)

DepartmentofBroadband,CommunicationsandtheDigitalEconomy(DBCDE)

DepartmentofDefence(DoD)

DepartmentofEducation,EmploymentandWorkplaceRelations(DEEWR)

DepartmentoftheEnvironment,Water,HeritageandtheArts(DEWHA)

DepartmentofFamilies,Housing,CommunityServicesandIndigenousAffairs(FaHCSIA)

DepartmentofFinanceandDeregulation(DoFD)

DepartmentofForeignAffairsandTrade(DFAT)

DepartmentofHealthandAgeing(DoHA)

DepartmentofHumanServices(DHS)–includesCentrelinkandMedicareAustralia

Appendices��

DepartmentofImmigrationandCitizenship(DIAC)

DepartmentofInfrastructure,Transport,RegionalDevelopmentandLocalGovernment(DITRDLG)

DepartmentofInnovation,Industry,ScienceandResearch(DIISR)

DepartmentofParliamentaryServices(DPS)

DepartmentofthePrimeMinisterandCabinet(PM&C)

DepartmentofResources,EnergyandTourism(RET)

DepartmentofVeterans’Affairs(DVA)

FamilyCourtofAustralia(FCA)

GeoscienceAustralia(GA)

IPAustralia(IPA)

NationalArchivesofAustralia(NAA)

OfficeoftheDirectorofPublicProsecutions(DPP)

DepartmentoftheTreasury

Invited industry submissions

AccentureAustraliaHoldingsPtyLtd

ACERComputerAustraliaPtyLtd

ApplePtyLtd

APPSGlobalPtyLtd

AvayaAustraliaPtyLtd

BoozandCompanyInc

BostonConsultingGroupPtyLtd

CA(Pacific)PtyLtd

CiscoSystemsAustraliaPtyLtd

CitrixSystemsAsiaPacificPtyLtd

ClicksITRecruitment

CommanderCommunicationsLimited

ComputerSciencesCorporation(CSC)AustraliaPtyLtd

CPTGlobalLimited

DELLAustraliaPtyLtd

DimensionDataAustraliaPtyLtd

Appendices ��

DistillerySoftwarePtyLtd

EDS(Australia)PtyLtd

Ernst&Young

FujiXeroxAustraliaPtyLtd

Fujitsu(Aust)PtyLtd

FunnelbackPtyLtd

GoogleAustraliaPtyLtd

HewlettPackardAustraliaPtyLtd

HitachiDataSystemsAustraliaPtyLtd

IBMAustraliaLimited

INTELAustraliaPtyLtd

KPMG

MacquarieTelecom

ManpowerServices(Australia)PtyLtd

MicrosoftCorporation

Oakton–AcumenAlliance

SingTelOPTUSPtyLtd

PeopleBankAustraliaLimited

PricewaterhouseCoopers(PWC)

RedHatAsiaPacific

SAPAustraliaPtyLtd

SHARPCorporationofAustraliaPtyLtd

SMSManagement&TechnologyLimited

SunMicrosystemsAustraliaPtyLtd

Talent2PtyLtd

TechnologyOneLimited

TelstraCorporationLimited

UNISYSAustraliaPtyLtd

UXCLimited

VerizonBusiness

Appendices��

Invited representative bodies’ submissions

AustralianComputerSociety(ACS)Inc

AustralianIndustryGroup(AiGroup)

AustralianInformationIndustryAssociation(AIIA)

Community&PublicSectorUnion(CPSU)

OpenSourceIndustryAustraliaLimited

Other submissions

DrRAndrews

APMGroup

AustralianGovernmentLibrariesInformationNetwork(AGLIN)

AustralianSchoolofBusiness–TheUniversityofNewSouthWales

MrKBeck

MsJBoston

MrLBunting

MrSCoates

CuramSoftware

MrAGreig

GrenfellConsultancyServicesPtyLtd

MrMHart

IndigoInformationSystem

InsiteInteractive

KyoceraMitaAustraliaPtyLtd

QueenslandGovernment

SolvedatMcConchiePtyLtd

TannerJamesManagementConsultants

TeradataAustraliaPtyLtd

TheHelmsmanInstitute

TheProjectGroup

Appendices ��

E CONSULTATIONS

Ministers

TheHon.KevinRudd,MP,PrimeMinister

TheHon.LindsayTanner,MP,MinisterforFinanceandDeregulation

SenatortheHon.KimCarr,MinisterforInnovation,Industry,ScienceandResearch

TheHon.JennyMacklin,MP,MinisterforFamilies,Housing,CommunityServicesand

IndigenousAffairs

SenatortheHon.JoeLudwig,MinisterforHumanServices

SenatortheHon.JohnFaulkner,SpecialMinisterofState

SenatortheHon.StephenConroy,MinisterforBroadband,Communicationsandthe

DigitalEconomy

Departments and agencies

MeetingswereheldwithteamsledbytherespectiveSecretaries/CEOsortheirnomineeswith

thefollowingagencies.

Attorney-General’sDepartment

DepartmentofBroadband,CommunicationsandtheDigitalEconomy

DepartmentofDefence

DepartmentofEducation,EmploymentandWorkplaceRelations

DepartmentofFinanceandDeregulation

DepartmentofForeignAffairsandTrade

DepartmentofHealthandAgeing

DepartmentofHumanServices

DepartmentofImmigrationandCitizenship

DepartmentofInnovation,Industry,ScienceandResearch

DepartmentofthePrimeMinisterandCabinet

DepartmentoftheTreasury

AustralianCustomsService

AustralianNationalAuditOffice

AustralianTaxationOffice

Appendices�00

AustralianBureauofStatistics

BureauofMeteorology

Centrelink

DefenceMaterielOrganisation

MedicareAustralia

TheAustralianGovernmentInformationManagementOffice(AGIMO),DepartmentofFinance

andDeregulation

Inaddition:

FourPortfolioSecretariesmeetings

Secretaries’CommitteeonICT(SCICT)

BusinessProcessTransformationCommittee(BPTC)–ChiefInformationOfficerCommittee

(CIOC)meeting

CrossJurisdictionChiefInformationOfficerCommittee(CJCIOC)–meeting

Roundtablemeetingwithnon-PortfolioSecretariesfromacross-sectionofagencies

ChiefInformationOfficerForum(CIOF)–meeting

Other

SenatorKateLundy,SenatorfortheAustralianCapitalTerritory

MeetingswereheldwithteamsledbytherespectiveSeniorExecutivesortheirnomineeswith

thefollowingrepresentativeandindustrybodies.

AustralianComputerSociety(ACS)Inc

AustralianIndustryGroup(AiGroup)

AustralianInformationIndustryAssociation(AIIA)industry–roundtablemeeting

Community&PublicSectorUnion(CPSU)

Industry

Booz&CompanyInc

BostonConsultingGroupPtyLtd

CiscoSystemsAustraliaPtyLtd

CPTGlobalLimited

CSCAustraliaPtyLtd

Appendices �0�

DELLAustraliaPtyLtd

EDS(Australia)PtyLtd

Ernst&Young

FujiXeroxAustraliaPtyLtd

HewlettPackardAustraliaPtyLtd

HitachiDataSystemsAustraliaPtyLtd

IBMAustraliaLimited

KPMG

MicrosoftCorporation

SingTelOPTUSPtyLtd

PriceWaterhouseCoopers(PWC)

SAPAustraliaPtyLtd

Cross-sectionofsmallandmediumenterprises(SMEs)–roundtablemeeting

TelstraCorporationLimited

TERRiA

UnisysAustraliaPtyLtd

Appendices�0�

F AGENCIES WITH ICT SPEND OVER $20 MILLION IN 2007–08

Basedontheirinputtothesurvey,theagencies(excludingDefence)withICTspendinexcessof

$20millionin2007–08are:

1. Attorney-Generals’Department

2. AUSTRAC

3. AusTrade

4. AustralianBureauofStatistics

5. AustralianCrimeCommission

6. AustralianCustomsService

7. AustralianFederalPolice

8. AustralianSecuritiesandInvestmentsCommission

9. AustralianTaxationOffice

10. BureauofMeteorology

11. Centrelink

12. ComSuper

13. Crimtrac

14. DepartmentofAgriculture,FisheriesandForestry

15. DepartmentofEducation,EmploymentandWorkplaceRelations

16. DepartmentoftheEnvironment,Water,HeritageandtheArts

17. DepartmentofFamilies,Housing,CommunityServicesandIndigenousAffairs

18. DepartmentofFinanceandDeregulation

19. DepartmentofForeignAffairsandTrade

20. DepartmentofHealthandAgeing

21. DepartmentofHumanServices–ChildSupportAgency

22. DepartmentofImmigrationandCitizenship

23. DepartmentofInfrastructure,Transport,RegionalDevelopmentandLocalGovernment

24. DepartmentofInnovation,Industry,ScienceandResearch

25. DepartmentofParliamentaryServices

26. DepartmentofVeterans’Affairs

27. IPAustralia

28. MedicareAustralia

Appendices �0�

G AGENCIES WITH ICT SPEND $2 MILLION TO $20 MILLION IN 2007–08

Basedontheirreturnstothesurvey,agencieswithICTspendsbetween$2millionand$20million

toachievea7.5%reductionbasedon2007–08ICTspendoverthenext2Budgetyearsare:

1. AdministrativeAppealsTribunal

2. AusAID

3. AustralianNationalAuditOffice

4. AustralianCommunicationsandMediaAuthority

5. AustralianCompetitionandConsumerCommission

6. AustralianElectoralCommission

7. AustralianIndustrialRegistry

8. AustralianPrudentialRegulationAuthority

9. AustralianPublicServiceCommission

10. DepartmentofBroadband,CommunicationsandtheDigitalEconomy

11. DepartmentofthePrimeMinisterandCabinet

12. DepartmentoftheSenate

13. FamilyCourtofAustralia

14. FederalCourtofAustralia

15. GeoscienceAustralia

16. GreatBarrierReefMarineParkAuthority

17. Insolvency&TrusteeServiceAustralia

18. MigrationReviewTribunalandRefugeeReviewTribunal

19. NationalArchivesofAustralia

20. NationalHealthandMedicalResearchCouncil

21. NationalNativeTitleTribunal

22. OfficeofNationalAssessments

23. OfficeoftheCommonwealthDirectorofPublicProsecutions

24. TherapeuticGoodsAdministration

25. DepartmentoftheTreasury

26. WorkplaceAuthority

Appendices�0�

H CANDIDATES FOR WHOLE-OF GOVERNMENT APPROACHES

Somecandidatesforconsiderationforwhole-of-governmentapproaches,subjecttoopt-out,

overthefirst2yearsoftheSecretaries’ICTGovernanceBoard(SIGB)’sexistenceinclude

(inalphabeticalorder):

• AustralianGovernmentArchitecture

• AustralianGovernmentInteroperabilityFramework

• BusinessPortal

• CareerstructureforICTstaff

• CitizenPortal

• Clientcodeofconduct

• Commonbusinessprocesses

• CommonEmailSystem

• CommonHighSecurityNetwork

• CommonLowSecurityNetwork

• Commonmethodologyforassessingorganisationalcapability

• Commonprojectmanagementtoolsfordifferentsizesofprojects

• Criteriaforassessingrequestedopt-outs

• Criteriafortheidentification,operationandsustainingofCentresofExcellencewithin

theGovernment

• Datacentrestrategy

• ICTsustainabilityplan

• ICTsystemstoimprovethemanagementoftheGovernment’spresenceoutsideAustraliain

linewiththePrimeMinister’sDirective.

• ICTworkforceplanningtool

• Keysupplierstobesubjecttostrategicmanagement

• PlanstosupporttheGovernment’sSMEagenda,throughICTprocurement

• Rationalisationofthenumberofphysicaltelecommunicationlinks,bothwithinAustralia

andinternationally

• Systemsandapplicationswhereacquisitionsorupgradesarecustomisedorbespoke

solutionswillrequireapprovalbytheMinisterialCommittee.

• Volumearrangementsforcommodityhardwareproductsandtelecomservices

• Volumesourcingagreementsforcommonlyusedsoftware.

TheabovelistincludessomeexistingAGIMOoutputswhichwillneedtobeformallyconfirmed

aswhole-of-governmentarrangementssubjecttoopt-out.

Appendices �0�

I PROPOSED CRITERIA FOR WHOLE-OF-GOVERNMENT APPROACHES AND ARRANGEMENTS SUBJECT TO OPT-OUT

Asaguidingprinciple,whole-of-governmentapproachesandarrangementssubjecttoopt-out

shouldbeconsiderediftheyprovideclearsuperioroutcomesfortheGovernmentand/orthe

taxpayer,overautonomousapproachesbyagencies.

Oneormoreofthefollowingcriteriashouldapply:

• Economyofscaleofbenefitswhichdonothaveasignificantadverseimpactonwider

Governmentpolicies

• Theabilitytomovetowardsmorejoined-upservicesforcitizensandbusinessisenhanced

• ThemanagementanddevelopmentofscarceICTskillswithintheAPSisstrengthened

• TheoperationoftheGovernmentICTmarketplaceisimproved

• OtherkeyprioritiesoftheGovernment(forexample,SMEs,sustainability)arereinforced

• Duplicationofcostsareavoided

• Futureflexibilityformachineryofgovernmentchangesisenhanced

• TheabilitytorespondtoexternalICTrelatedissuesandtrendsisimproved

• TheabilitytomanageandleveragetheGovernment’sinformationassets,havingdueregard

toprivacyconcernswhereappropriate,isenhanced.

Appendices�0�

J PROPOSED ROLE OF AGIMO

Basedonmyrecommendations,theroleofAGIMOwouldinclude:

• Identifyingtheneedforcommonapproaches(inareassuchasstandards,platforms,

applications,infrastructure,businessprocessandaggregatedICTprocurement)and

preparingtheassociatedbusinesscasesfortheSIGB

• WhereagreedbytheSIGB,appropriateinvolvementinthedevelopmentandimplementation

ofcommonapproaches(thisincludesaspectrumrangingfromaleadershiprolethrough

provisionofsomeresources,toparticipationinthegovernancearrangements)

• StrategicmanagementofkeyICTsuppliers

• FunctionalleadershipoftheAPSICTprofessionalcommunity

• Undertakinganannualbenchmarkingexerciseofagenciesagainstthecommonefficiency

andeffectivenessmetricsandthenprovidingagencieswithdetailedfeedbackandtheSIGB

withasummaryreportidentifyingkeytrends

• LeadingtheCIOC,BPTCandCIOFinidentifyingemergingissuesandtrends,anddelivering

potentialresponsesforconsiderationbytheSIGB

• Annuallyconstructingthewhole-of-governmentICTworkforceplanandidentifyinganykey

issuestogetherwithadviceforaddressingthemtotheSIGB

• ScrutinyofNPPsagainstareasagreedforopt-outbytheSIGB

• Scrutinisingopt-outrequestsagainstagreedcriteriaandprovidingadvicetotheSIGBand

theMinisterialCommittee

• Facilitatingthespreadofgoodpractice

• Maintainasingleauthoritative‘sourceoftruth’forICTpolicies.

Appendices �0�

K LINKAGE BETWEEN TERMS OF REFERENCE AND RECOMMENDATIONS

Thisappendixsetsoutthelinkagebetweenthereviewsrecommendationsandthereview’s

TermsofReference.

1. ThereviewwillexamineandreportontheeffectivenessandefficiencyoftheAustralian

Government’scurrentuseofinformationandcommunicationtechnology(ICT)to

determinewhethertheGovernmentisrealisingthegreatestreturnfromitsinvestments

inICT,includingthewayinwhichICTcanbeusedtomeettheGovernment’sbroader

objectives,aswellasanarrowerfinancialreturn.Thereviewwillexaminewhetherwehave

therightinstitutionalarrangementsinplacetomaximisethereturn,andthemeansby

whichthereturnmightbeincreased.

[Achieved–setoutinChapter4KeyFindings,Chapter5Recommendationsand

Chapter6Implementation]

2a. howICThasbenefitedtheoperationsofgovernmentandhowthatbenefitismeasured;

[Recommendations5.2.2,5.2.3,5.3.2]

2b. theadequacyofcurrentcoordinationofICTbusinessplanningandinvestment

decision-makingprocessesandtheoptionsforandbenefitsofastrongerICTframework

and/orgreatercoordinationifcurrentarrangementsareinadequate;

[Recommendations5.1.1,5.1.2,5.1.3,5.2.1,5.2.2,5.6.1]

2c. theexistingICTinvestmentsofagenciesandwhetherthereareopportunities

tomaximisetheuseofnewandexistingICTinvestmentsinordertomeetthe

Government’sbroaderobjectives;

[Recommendations5.3.1,5.5.1,5.7.1,5.7.2]

2d.thepossibleduplicationofICTsystems(suchasfinancialandhumanresource

management)acrossgovernmentagencies,whetheropportunityexiststoconsolidate

existingornewsystems,andwhatformanyconsolidationshouldtake;

[Recommendations5.2.2,5.3.3]

2e. theduplicationofbusinessprocessesacross,andwithinagencies,andtheeffectsthis

hasonthecoststogovernmentandthequalityofservicedelivery;


2f. barriersposedbyexistinglegacyICTinvestmentsacrossagenciesandthepotentialfor

moreconsistencyinnewinvestments;

[Recommendations5.3.1,5.2.2,5.3.1]

2g.howagenciesmanagetheirstaffingrequirementsforICTprojects,whetherthereare

opportunitiestoimprovetheefficientuseofstaffandcontractresources,andwhether

competitivepressuresaredrivingupcosts;

[Recommendations5.4.1,5.4.2,5.4.3,5.4.4,5.4.5,5.4.6,5.4.7]

Appendices�0�

2h.theexistingICTgovernanceframeworkthatguidestheAustralianGovernment’suseof

ICTtodelivergovernmentoutcomes;

[Recommendations5.1.1,5.1.2,5.1.3,5.2.1]

2i. thepossibleroleoftheDepartmentofFinanceandDeregulation,orasimilarcentral

body,incontributingtomoreefficientandeffectiveuseofICTacrossgovernment;and


2j. anyothermattersastheyarise,inconsultationwiththeMinisterforFinance

andDeregulation.

[Recommendation5.2.4]

3. Tocollectrelevantinformationontheaboveissues,thereviewwillfocusontheuseofICTin

selectedAustralianGovernmentagenciesthatareamixoflargeandsmallusersofICT.

[Achievedviasubmissions,meetingsandsurvey]

4. ThereviewwillprovideasnapshotofthecurrentstateofICTintheAustralianGovernment,

whatexistsandhowitismanagedtodeliverGovernmentobjectives.

[Achievedviasubmissions,meetings,surveyandChapter4KeyFindings]

5. ThereviewwillhaveregardtothebestpracticeapproachesofotherAustralianand

internationaljurisdictionsandtheprivatesector.

[Achievedviasubmissionsandmeetings]

6. Thereviewwillalsohaveregardtoplannedworkonwhole-of-governmentICTprocurement.

[Recommendations5.6.1,5.6.2,5.6.3,5.6.4,5.6.5]

7. ThereviewmustprepareareportfortheMinisterforFinanceandDeregulationby

September2008.ThereportshouldsetoutrecommendationstotheAustralian

GovernmenttodrivegreaterefficiencyintheuseofICTacrossgovernmentwhileenhancing

orimprovingthecapacityofICTtosupportserviceandprogramdelivery.

[Achieved]

8. InformulatingrecommendationsthattheAustralianGovernmentshouldtakeaparticular

courseofaction,thereviewshouldassesstheresourcing,costs,benefitsandany

implementationrisksofthataction.

[Achieved–setoutinChapter6Implementation]

Appendices �0�

L DETAILS OF ICT REVIEW TEAM

Mr Wayne Cooper

AustralianGovernmentInformationManagementOffice


Ms Kristy Dam

AustralianTaxationOffice

Mr Gary Davis

DepartmentofEmployment,EducationandWorkplaceRelations

Ms Robyn McLeod



Mr Anthony O’Connor

Centrelink

Ms Fabiola Peresan



Mr Saul Schneider



Mr Brian Stewart



Mr Scott Wallace



review of the australian government's use of information ... · efficiency and effectiveness...

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