Below is a vodcast by Senator Kate Lundy outlining the status of the ICT Reform Program, a set of projects and initiatives resulting from the Gershon Review which was presented to the government in late 2008.
Transcript
The government was pretty quick to accept all of the recommendations of the Gershon Review and have since then implemented a 3 year, ICT Reform Program.
I’ve been watching pretty closely, and I think it’s really important to share some of the primary focal points of that program.
One of the most interesting is the review of “business as usual” expenditure. Now these are the big contracts that have been in place for a long time across agencies. Originally they may have started out in clusters of agencies but since then have evolved into something else. The good thing about the Gershon Review and the recommendations is they instructed a review of that business as usual expenditure. So all of the inefficiences that have crept into those big contracts – that weren’t bringing anything new to the way governments manage their ICT – were really challenged.
And I was really pleased to see that over the next 3 or 4 year period some $570 million worth of savings was identified.
As a result a $55m – what I call an innovation dividend but I know the government calls it the reinvestment fund – has been created out of those savings. Thats a really good result, because that money, as Gershon recommended can now be reinvested in innovative solutions.
That’s one of the clever things about the way Gershon has recommended change in Federal Government ICT management.
Another part of the ICT Reform Program was the 39 recommendations in the original review. Out of that 39, 16 continue to be worked on, but 10 have already been delivered. So it’s really, again, good to see AGIMO, the Australian Government Information Management Office whose the lead agency in implementation moving ahead quickly with a whole series of those recommendations.
There is an ICT sustainability plan, and AGIMO is looking at how that can be rolled out across all agencies and departments and they’re working closely with the Department of Environment, Water, Heritage and the Arts to implement an ICT Green Procurement Kit.
Another initiative that I think is critically important is optimisation of the ICT procurement panels. We need to be more efficient in how we procure our ICT. It’s the biggest ICT market in Australia if you like, the Commonwealth spends the most money of any organisation on ICT, so how we procure our hardware, our software, our services, has a direct impact on the health and growth of Australian ICT companies.
Another important area is skills. I was really pleased to see the focus the Gershon Review put on workforce issues. It’s really easy to overlook them, but critically important if we are going to have the right people with the right skills in the Public Sector doing the work.
Now we know that under the Howard Government the number of contractors really blew out. What Gershon has recommended and the Government accepted is to refocus a proper skillset and career paths for IT professionals in the government sector, in the Public Service.
So all in all, the ICT Reform Program I think has been a very useful and practical approach to whole of Government ICT. I think it gets the measure right between what needs to be done by agencies and departments themselves, and what can be a useful addition and support from a public policy perspective across the whole of government.
I commend the work of AGIMO to date, I think they’re doing an extremely good job, but I also like to see agencies and departments responding through the CIO’s committee, the new CEO’s committee of agencies and departments, and indeed the political leadership coming through the various Ministers in progressing this whole reform agenda.
So I’m quite optimistic about the future. I will as always be watching it closely, and I’m really pleased to see that we aren’t repeating the mistakes of the past.
So I’d just like to close this particular vodcast off by saying a couple of things. First of all, I’m really keen to hear your views about procurement policy, how you think it’s tracking, and what the impact is particularly on our local ICT businesses and market.
I’m also really keen to try and identify where innovation is occurring. This is something that’s very important to the Government, because with that reinvestment fund, good ideas in one agency or department really need to be shared, I think talked about and promoted. And possibly find a good fit in another agency or department. So how we share information when good things are happening in the Public Sector I think will help lift not only ICT services and industry across the board, but as I said before, really improve the quality of service we as a government can provide to the citizens of this country.
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Like Kate, I believe the Gershon Report came up with some worthwhile and theoretically sound arguments and recommendations. That was I suspect, expected. However, if you ask the plethora of ICT firms servicing the Canberra public sector market over the past 12 months how they have fared, they will all tell you a similar story: Federal Government agencies stopped purchasing ICT whilst the Gershon recommendations were being implemented. Agency CIOs and ICT heads froze their budgets for fear of being caught overspending. This has hurt the local industry – especially local SMEs – severely. This, on top of the abrupt cessation of the Commercial Ready program….
The Innovation Dividend, as you call it, is the best thing to come out of the Review process. It should spur some interesting developments in the local (innovative) ICT industry. Lets just hope it gets spent on Canberra SMEs.
As an APS ICT employee I have seen firsthand the good that Gershon has done to attitudes within agencies, and there is now a better appreciation of the wider ICT environment across all of the commonwealth government. The surveying of agencies was tough and thorough, and it really made us think hard about ourselves and why/how we did what we did. Top marks for this.
I have a few reservations though – we still need to see tangible benefits from both the ICT Staffing review, and the ‘green ICT’ concept.
It would also be good if there were new services that could emerge from data centre upgrades/consolidation – shouldn’t this then be able to deliver a Federal ICT ‘cloud’ within which we can distribute communications/storage solutions to achieve efficiencies (as we might see with MS Mesh/Twitter/Gmail etc type services), but without the legal/privacy/security concerns in off-shoring our data?
We have also seen that while we have saved money through centralised Microsoft licensing, we have lost out on associated training vouchers that we previously had access to with our old, individual agency contract. I think the government needs to look carefully into situations where agencies are saving dollars, but at the expense of investment/services they really need. This also applies to the reinvestment fund, round 1 of which has seen agencies denied access to reinvestment dollars as there was an oversubscription in applications. This shows that the need is still there, but the dollars may yet be lacking, and if this is the case then fair enough – but the decision making needs to be more obvious and transparent so that agencies that are seeing reduced funding can at least appreciate where and why that funding has gone.
Great blog & great website! However, I have a bone to pick on govt procurement. Current policies do not support the growth of the local industry.
Peter Gershohn said that SME procurement policies should be reviewed & the Department said a response would be made by September 2009. (recommendation 5.6.4 – Integrate the Government’s ICT and SME policies – by Sep 2009 – More efficient market through facilitation of entry of SME suppliers).
The lack of progress on procurement-related “local industry” policies has been very disappointing.
Risk averse buyers prefer to procure from larger overseas companies. As the mantra used to go “you don’t get sacked for buying IBM” – & yes, this was coined by IBM. Whilst the vendor name may now be Oracle, Microsoft or Cisco, a risk averse culture still pervades the government buying community.
And where there is local industry procurement, it is generally for services & not for IP-intensive product.
Local industry often provides a more targetted solution, a higher level of innovation, and lower costs. It deserves/needs support through government procurement policies.
The Australian government track record in buying from local firms is woeful.
See the 2005 ACS Procurement Reform report which came out of an industry/DCITA working group that the dept largely ignored:
http://bluetongue1.files.wordpress.com/2008/07/2005-selling-to-australian-government-ict-smeworking-party-report-acs-feb-2005.pdf
The problematic that i can see with the implementation of the gershon recommendations was the re-creation of the panel contracts. Tenders were released to allow all businesses internationally to participate in these panels, and the impact has been immediate. The focus one for me was the AFP – there are over 178 panelists, all over the world, and there is no innovation in their responses to the requests, it is purely price motivated. No SME stands a fighting chance of winning the deals, as the enterprise companies drop price, often outrageously low, and win the deals.
Big business isn’t winning. No-one is. The panels have stifled innovation and diversity, two key components that the Australian ICT industry needs to allow us to grow.
A better way to handle the contract process would have been to cut the amount of paperwork needed to submit a response. the framework is now quite old, whittling it back to allow faster decisions and energise the ICT industry would have seen better, creative and above all, innovative responses and solutions. Price should never be the decision basis. Bring back the Value for Money proposition, as price is but one of the components that allows solutions to be weighted.
Panels are good for reminders of our history – they did not work then, they have no place in the ICT industry of the future. what the ICT industry needs is a clear direction regarding spend. APP documents need to be kept up to date, and the departments need to allow multiple respondents to their RFP, RFI, RFT & RFQ requests. there are SMEs who can meet their needs, with innovation, but they are being effectively ignored due to their lack of clout in the pricing wars that we can see right now.
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
The above recommendation ignores free market forces and IT skills shortages, especially in specific areas.
Logically, application refresh and efficiency initiatives driven by up-to-date digital object management(even using COTS/GOTS platforms) puts demand on similar skillsets required to implement these projects.
Government departments not only compete with each other for these resources, but with the private sector, especially in Melbourne and Sydney. There is little incentive for contractors with these in-demand skillsets to convert to APS and it just threaten the delivery of the ICT projects necessary to fulfill other departmental inititives.
Treating contractors like DEEWR did this week does nothing but threaten ICT project delivery and make the job harder for incumbent ICT professionals.