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Review of the austRalian
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Review of the austRalian
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Commonwealth o Australia 2008
ISBN 1921 1825 87 3 print
ISBN 1921 1829 03 online
Department o Finance and Deregulation
The Australian Government Inormation Management Ofce
This work is copyright. Apart rom any use as permitted under the Copyright Act 1968, no part may be reproduced
by any process without prior written permission rom the Commonwealth. Requests and inquiries concerning
reproduction and rights should be addressed to the
Commonwealth Copyright Administration
Attorney Generals Department
Robert Garran Ofces
National Circuit
Barton ACT 2600or posted at http://www.ag.gov.au/cca
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REVIEW OF THE AUSTRALIAN
GOVERNMENTS USE OF INFORMATION
AND COMMUNICATION TECHNOLOGY
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 Governments use of Information andCommunication 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 Governments 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 thecontext 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
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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
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Contents
GLOSSARY OF ABBREVIATIONS VIII
EXECUTIVE SUMMARY 1
Introduction/Context 1
Methodology 1
Keyndings 2
Summaryokeyrecommendations 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. Useobestpractice 23
1.8. Viewsonexistingwhole-o-governmentarrangements 27
1.9. Viewsondatacentres 29
1.10. ViewsontheICTindustry 30
1.11. ICTarrangementsinministerialoces 30
CHAPTER 2: VIEWS FROM OUTSIDE THE AUSTRALIAN GOVERNMENT 31
2.1. BetterutilisationoICTassets 31
2.2. Sharedservices 34
2.3. Standardised/coordinatedapproachtoprocurement 35
2.4. Useocommercialo-the-shelsolutions 35
2.5. Needorstandardisation 36
2.6. Whole-o-governmentgovernance 36
2.7. Highcostsotendering 37
2.8. TheAustralianGovernmentcomparedtoothergovernments 39
contents
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Contents
2.9. Skillsshortage 39
2.10. GreenICT 40
2.11. Securityclearances 412.12. Bestpractices 41
CHAPTER 3: SUMMARY OF SURVEY FINDINGS 45
3.1. Surveyapproach 45
3.2. Surveyresults 45
CHAPTER 4: KEY FINDINGS 55
4.1. Weakgovernanceopan-governmentissuesrelatedtoICT 55
4.2. AgencygovernancemechanismsareweakinrespectoocusonICTeciencyandunderstandingoorganisationalcapabilitytocommission,manageand
realisebenetsromICT-enabledprojects 57
4.3. ThebusinessasusualICTundinginagenciesisnotsubjecttosucient
challengeandscrutiny 58
4.4. DisconnectbetweenthestatedimportanceoICTandactionsinrelationto
ICTskills 58
4.5. Thereisnowhole-o-governmentstrategicplanordatacentres.Intheabsence
osuchaplan,thegovernmentwillbeorcedintoaseriesoadhocinvestments
whichwill,intotal,costsignicantlymorethanacoordinatedapproach 60
4.6. TheGovernmentICTmarketplaceisneitherecientnoreective 61
4.7. ThereisasignicantdisconnectbetweentheGovernmentsoverallsustainability
agendaanditsabilitytounderstandandmanageenergycostsandthecarbon
ootprintoitsICTestate 61
CHAPTER 5: RECOMMENDATIONS 63
5.1. Recommendation1Strengthenpan-governmentgovernance 63
5.2. Recommendation2StrengthenAgencyGovernance 66
5.3. Recommendation3TightenthemanagementoICTbusinessasusualunding 68
5.4. Recommendation4EnhancethemanagementotheAPSICTskillsbase 70
5.5. Recommendation5DataCentres 72
5.6. Recommendation6Improvetheeciencyandeectivenessothe
ICTmarketplace 73
5.7. Recommendation7SustainabilityoICT 75
CHAPTER 6: IMPLEMENTATION 77
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Contents
APPENDICES 87
A TermsoReerence 87
B Submissionquestions 89C Surveyinstrument 92
D Submissionsreceived 95
E Consultations 99
F AgencieswithICTspendover$20millionin200708 102
G AgencieswithICTspend$2millionto$20millionin200708 103
H Candidatesorwhole-ogovernmentapproaches 104
I Proposedcriteriaorwhole-o-governmentapproachesandarrangements
subjecttoopt-out 105J ProposedroleoAGIMO 106
K LinkagebetweenTermsoReerenceandRecommendations 107
L DetailsoICTReviewTeam 109
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Glossary
GLOSSARY OF ABBREVIATIONS
ABS AustralianBureauoStatistics
ACT AustralianCapitalTerritoryAGD Attorney-GeneralsDepartment
AGIMO AustralianGovernmentInormationManagementOce
AIIA AustralianInormationIndustryAssociation
ANAO AustralianNationalAuditOce
APS AustralianPublicService
APSC AustralianPublicServiceCommission
ATO AustralianTaxationOce
BAU businessasusualBPTC BusinessProcessTransormationCommittee
CEO ChieExecutiveOcer
CIO ChieInormationOcer
CIOC ChieInormationOcerCommittee
CIOF ChieInormationOcerForum
CMMI CapabilityMaturityModelIntegration
COBIT ControlObjectivesorInormationandRelatedTechnology
COTS commercialo-the-shel
Deence DepartmentoDeence
DEWHA DepartmentotheEnvironment,Water,HeritageandtheArts
EPEAT ElectronicProductEnvironmentalAssessmentTool
Finance DepartmentoFinanceandDeregulation
FMAAct FinancialManagementandAccountabilityAct1997
FMIS nancialmanagementinormationsystem
GMS grantsmanagementsystem
GOTS governmento-the-shel
GTS GovernmentTechnologySurvey
HRMIS humanresourcemanagementinormationsystem
HR humanresources
HVAC heating,ventilationandair-conditioning
ICON IntraGovernmentCommunicationsNetwork
ICT inormationandcommunicationtechnology
IP intellectualproperty
ITIL InormationTechnologyInrastructureLibrary
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Glossary x
MoG machineryogovernment
NPP newpolicyproposal
OGC OceoGovernmentCommercePM&C DepartmentothePrimeMinisterandCabinet
PMBOK ProjectManagementBodyoKnowledge
PRINCE2 ProjectsinControlledEnvironments
PSPC ProtectiveSecurityPolicyCommittee
PUE powerusageeectiveness
SCICT SecretariesCommitteeonICT
SIGB SecretariesICTGovernanceBoard
SME smallandmediumenterpriseSOA serviceorientedarchitecture
SRO SeniorResponsibleOcial
Treasury DepartmentotheTreasury
UK UnitedKingdom
US UnitedStates
XBRL ExtensibleBusinessReportingLanguage
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x
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ExecutiveSummary
EXECUTIVE SUMMARY
INTRODUCTION/CONTEXTOn11April2008,theMinisterorFinanceandDeregulation,theHon.LindsayTanner
MP,announcedmyappointmenttoleadareviewotheAustralianGovernmentsuseo
inormationandcommunicationtechnology(ICT).
METHODOLOGY
InresponsetotheTermsoReerence,Iemployedanevidence-basedapproachtothereview.
Therewasaneedtogainacomprehensiveunderstandingothestatusquoinorderto
determinethescopeor,andidentiyareaso,improvementoeciencyandeectiveness.
Therehavebeenthreemainphasestothereview:
Evidence gathering:Iinvitedsubmissionsromagencies,industryandotherkeystakeholders
ontheuseoICTwithingovernment.Intotal,112submissionswerereceived.Ialsoissueda
comprehensivesurveyto100Financial Management and Accountability Act 1997(FMAAct)
agenciesrequestingdataonICTexpenditure,withdetailedquestionsoncostsperdesktop,
websites,thetopologyandcostotelecommunicationsnetworks,useohumanresource
andnancialmanagementinormationsystems,grantmanagementsystemsandenergy
consumption.Inaddition,twosmallsurveyswereconducted.
Consultation: ThreevideoconerenceswereheldwithPortolioSecretariesintheearlystages
othereview,ollowedbyaseriesomeetingsinJulyandAugustwiththePrimeMinister,
Ministers,agencies,industryandotherstakeholders.Intotal,63meetingswereheld.In
addition,threevisitsweremade,onetotheAustralianHighCommissioninLondonand
twotodatacentresinCanberra,tounderstandinmoredetailcertainpointsraisedbysome
submissionsandmeetings.
Analysis and reporting:Theevidence,supplementedbyadditionalinputssuchastheAustralian
BureauoStatistics200203GovernmentTechnologySurvey,wasanalysedtoidentiykeyndings.Recommendationswerethendevelopedtoaddresstheidentiedndingsand,nally,
thisreportwasproducedwithintherequestedtimerame.
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ExecutiveSummary
KEY FINDINGS
Aterdetailedanalysisotheevidence,thereviewidentiedtheollowingkeyndings.
1. Thereisweakgovernance1opan-governmentissuesrelatedtoICT.
2. AgencygovernancemechanismsareweakinrespectotheirocusonICTeciencyand
anunderstandingoorganisationalcapabilitytocommission,manageandrealisebenets
romICT-enabledprojects.
3. Thebusinessasusual(BAU)ICTundinginagenciesisnotsubjecttosucientchallenge
andscrutiny.
4. ThereisadisconnectbetweenthestatedimportanceoICTandactionsinrelationtoICTskills.
5. Thereisnowhole-o-government2strategicplanordatacentres.Intheabsenceosucha
plan,theGovernmentwillbeorcedintoaseriesoadhocinvestmentswhichwill,intotal,costintheordero$1billionmorethanacoordinatedapproachovera15-yearperiod.
6. ThegovernmentICTmarketplaceisneitherecientnoreective.
7. ThereisasignicantdisconnectbetweentheGovernmentsoverallsustainabilityagendaand
itsabilitytounderstandandmanageenergycostsandthecarbonootprintoitsICTestate.
Attheheartothesendingsisaconclusionthatthecurrentmodeloveryhighlevelsoagency
autonomy,includingtheabilitytosel-approveopt-instowhole-o-governmentapproachesinthe
ICTdomain,leadstosub-optimaloutcomesinthecontextoprevailingexternaltrends,nancial
returns,andtheaimsandobjectivesothecurrentGovernment.Theimpactothisautonomy
hasbeenheightenedbyapreviouslackostrongocusonwhole-o-governmentICTissuesatbothMinisterialandtopociallevels.Thisconclusionappliesnomatterhowwell-intentioned
individualagenciesareintheirpursuitowhole-o-governmentoutcomes.
ThecurrentmodelooperationisveryclosetotreatingFMAActagenciesasthoughtheywere
independentprivatesectorentities.Theagenciesare,however,verydierentinanumbero
aspects:theyareundedbythetaxpayer,theycannotgobankrupt,theyhaveverylittleor
nothingothetime=moneydynamicotheprivatesector,andtheyhavenosimplebottomline
outcomesagainstwhichtheirsuccessorailurecanbemeasured.
AgainstthebackgroundotheGovernmentsobjectivesandthepressurestoimproveeciencyandeectivenesswhereverpossible,Iconsidersomerebalancingbetweenagencyautonomy
andcoordinationacrossgovernmentisbothdesirableandnecessaryinmeasuresrelatedto
ICT.SuchamoveisinlinewithtrendsintheUnitedKingdom(UK)andUnitedStates(US)
Governments,aswellaslargeprivatesectororganisations.
1 Governance is defned as the system by which the current and uture use o IT is directed and controlled. It involvesevaluating and directing the use o IT to support the organisation and monitoring this use to achieve plans. Itincludes the strategy and policies or using IT within an organisation (Source: AS 8015-2005 Corporate Governanceo ICT). The generally accepted principles o public sector governance according to the Australian National AuditOfce (ANAO) include accountability, transparency, integrity, stewardship, efciency and leadership (Source: ANAO(July 2003), Better practice guide: Public sector governance and the individual ofcer).
2 In this report the term whole-o-government is used to mean all government agencies or a signifcant subseto them where there is a common issue which is important but not universal to all agencies.
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ExecutiveSummary
SUMMARY OF KEY RECOMMENDATIONS
Theollowingcomprisetheprimaryrecommendationsothisreview.Thecompletelisto
mydetailedrecommendationsisoundatChapter5othisreport.AsummaryohowtherecommendationsmeettheTermsoReerencecanbeoundatAppendixK.
Governance
EstablishaMinisterialCommitteeonICTtoberesponsibleorthekeywhole-o-government
ICTpoliciesandtheoverallstrategicvisionorhowICTshouldsupporttheachievementothe
Governmentsoutcomesandwiderpolicyagenda.
CreateaSecretariesICTGovernanceBoard(SIGB)withastrongmandateromthe
Governmenttodrivetheagreedrecommendationsarisingromthereviewandocus
onaddressingthekeybusinessissuestoimprovetheeciencyandeectivenessothe
GovernmentsuseoICT.
Allowagenciestoobtainopt-outs,basedongenuinebusinessneed,romagreedwhole-o-
governmentactivities.Opt-outstobeapprovedbytheMinisterialCommittee,inormedby
theSIGB.
Capability
Improveagencycapabilitytocommission,manageandrealisethebenetsromICT-enabled
projectsthroughtheimplementationoacommonmethodologyorassessingagencycapabilitybasedonsel-assessmentandperiodicindependentaudit.EachagencyChie
ExecutivetoproposeatargetlevelocapabilitybasedontheiragencysandtheGovernments
strategicpriorities,andorthistobeindependentlyvalidated.Agenciestodevelopacapability
improvementplanwithcommitment,andagreedactions,toaddressidentiedgaps.
ICT spend
TargettomovetotalFMAActagencyICTspendromanaverage77:23%splitbetweenICT
BAUactivitiesandcreationonewcapabilityin200708toanaverage70:30%in201112.
Asinitialstepstowardsthisgoal,reducetheICTBAUbudgetsothelargest28FMAAct
agencies(Deenceexcluded)withICTspendsinexcesso$20millionperannumby15%rom
200708actuals(oralistoagenciesreertoAppendixF),withaphasedintroductionover
twoyears.
CreateICTReviewTeamstohelptheseagenciesachieveorexceedthetargetreductions
withoutimpairingservicedeliverytocitizensandbusiness.
Inaddition,IrecommendtargetingagencieswithtotalannualICTspendsbetween$2million
and$20milliontoachievea7.5%reductiononaverageotheirBAUrom200708actuals
(oralistoagenciesreertoAppendixG),withaphasedintroductionovertwoyears.
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ExecutiveSummary
The15%and7.5%reductionsintotalshouldsavetheGovernmentaround$140millioninthe
rstyearandinexcesso$400millioninthesecondandsubsequentyears.Ialsorecommend
that50%othesavingsgeneratedbytheserecommendationsbetranserredtoacentralund
orreinvestmentinprojectstoimproveeciencyandeectivenessoICTBAUactivities,such
asreplacementolegacysotwareandhardwarewithhighsupportandmaintenancecosts.
Skills
Createawhole-o-governmentAustralianPublicService(APS)ICTcareerstructure,including
traininganddevelopmentprogramsorICTproessionalsinkeyskillsareas.
Developandmaintainawhole-o-governmentstrategicICTworkorceplan.
ReducethetotalnumberoICTcontractorsinuseacrossFMAActagenciesby50%overa
2-yearperiodandincreasethenumberoAPSICTsta.ThisshouldsavetheGovernmentan
estimated$100million(acrossbothBAUandproject-relatedwork).
Data centres
Developawhole-o-governmentapproachoruturedatacentrerequirementsoverthenext
1015years.
Sustainable ICT
Developawhole-o-governmentICTsustainabilityplan(inconjunctionwiththeDepartmentotheEnvironment,Water,HeritageandtheArts)tomanagetheenergycostsandcarbon
ootprintotheGovernmentsICTactivities.
IMPLEMENTATION
Myrecommendationsentailamajorprogramoadministrativereormandculturalchange.
BasedonmyexperienceocreatingsustainablechangeintheUKpublicsectortherearetwo
criticalrequirementswhichwilldeterminethesuccessotheproposedprogram:rst,sustained
leadershipanddriveatMinisterialandtopociallevels;second,ensuringtheenablersochangeareproperlyresourcednotonlyinundingterms,butalsoskillsotherightcalibre.
TheearlydecisionsotheMinisterialCommitteeandtheSIGBwillneedtosendoutclear
signalsaboutthepaceanddirectionochangewhichisthenreinorcedthroughsubsequent
decisions.Itwillbeessentialtoensurethatagreedwhole-o-governmentICTapproachesand
arrangementsaretorpurpose.
Theollowingpagesetsoutaproposedimplementationplanorthekeyrecommendations
basedontheassumptionthattheGovernmentapprovesallmyrecommendationsin
November2008.
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ExecutiveSummary
Key recommendations
Sep-0
8
Dec-0
8
Mar-0
9
Jun-0
9
Sep-0
9
Dec-0
9
Mar-1
0
Jun-1
0
Sep-1
0
Dec-1
0
Mar-1
1
Jun-1
1
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 staffExamine 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 (for example the development of efciency metrics), and those
activities that are ongoing (for example the implementation and ongoing use of efciency metrics).
In most cases an ongoing activity is preceded by an enabling activity.
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ExecutiveSummary
ACKNOWLEDGEMENTS
Iamextremelygrateultothosewhohavehelpedtomakethisreviewpossible.Inparticular,I
wouldliketothank:
thePrimeMinisterandtheMinisterorFinanceandDeregulationortheirinputandsupport
Ministerswhogenerouslygavemetheirtimeandviewsandprovidedmewithagreater
understandingotheiraimsandobjectivesandthewiderAustraliancontext
theAustralianGovernmentInormationManagementOceortheprovisionotalented
statotheReviewSecretariat
Centrelink,theAustralianTaxationOceandtheDepartmentoEducation,Employment
andWorkplaceRelationsortheprovisionohigh-qualityagencysecondeestothereview
secretariat
theDepartmentalSecretaries,AgencyChieExecutiveOcers,theAuditor-General,the
AustralianPublicServiceCommissioner,ChieInormationOcersandChieFinancial
Ocersotheagenciesthatprovidedsubmissions,surveyresponsesandtheirtimetomeet
withme
individualsandorganisationsoutsidetheGovernmentwhocontributedsubmissionstothe
review,andwhometwithmetodiscusstheirsubmissions
thoseindividualsandorganisationsundertakingdiscretetasksinsupportothereview
theActingAustralianHighCommissionertotheUK,andAustradeinLondonortheirhelpandsupport
mywie,whoputupwithmanyveryearlymorningandlatenightphonecallsIheldwiththe
reviewteaminAustralia,andmyextendedabsenceduringAugust.
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Introduction
INTRODUCTION
Inormationandcommunicationtechnology(ICT)intheAustralianGovernment
(theGovernment)operateswithinabroadercontextandhencemusttakeintoaccountkeymacronationalandglobaltrends.Thesetrendsinclude:
growingexpectationsamongcitizensandbusinessorthequalityoservicesdelivered
bygovernments
increasingconcernsaboutclimatechange
publicsectorundingpressures
technologytrends
globalisation
ICTworkorcechallenges.
Thesetrendswillcontinuetohaveanincreasinginfuenceontheapplication,delivery,costand
demandorICTservices.Theyshouldthereorebeconsideredinordertodevelopanenduring
whole-o-governmentstrategy.
Growing expectations among citizens and business or the quality o services deliveredby governments
Citizensnowexpectgovernmentservicestobeasgoodasthoseprovidedbytheprivate
sector.AsDeloitte3commented,One-size-ts-allsolutionsrequiringcitizenstonavigatea
complexbureaucraticmazetoobtainservicessimplydonotcutitintodayson-demand
world.Restoringthecondenceocitizensintheirpublicinstitutionsmeansdemonstrating
competenceincarryingoutthediculttaskogovernanceinthe21stcenturyanddelivering
citizensbettervalueortheirhard-earnedtaxdollars.Therealityisthatcitizensview
governmentasawholetheydonotwanttorepeatthesameinormationwhenaccessing
servicesromdierentagencies.Essentially,thiscallsorimprovedcollaboration,integration
andsharingoinormationbetweengovernmentagencies,keepinginmindprivacyandsecurity
considerations.
ArelativelyrecentsurveyoAustraliansuseoandsatisactionwithe-governmentservices4
showedthattheinternethasbecomeanindispensablechannelordeliveringgovernment
servicestoAustralians;itsuseiscontinuingtogrowanditisnowthepreerredservicedelivery
channeloramajorityopeople.Thesurveyreportalsohighlightedthecontinuingchallenges
3 Deloitte Touche Tohmatsu (2007), One size fts ew: Using customer insight to transorm government,
http://www.deloitte.com/dtt/cda/doc/content/dtt_ps_onesizeftsew_040908(1).pd
4 Australian Government, Department o Finance and Deregulation (December 2007), Australians use o
and satisaction with e-government services 2007, http://www.fnance.gov.au/Publications/use-o-e-government-services-2007/docs/31576_AGIMO_Satisaction-ALL.pd
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Introduction
acingtheGovernmentindeliveringservicestotheAustralianpublic.Citizensaresayingthat
theyvalueconvenienceintheirinteractionswithagencies,althoughorsome,theadvantages
obeingabletodealdirectlywithrealpeopleace-to-aceorbytelephonearepreerable.
Citizensarealsosayingtheywante-governmentservicesandgovernmentwebsitestobeeasier
tondandtouse.
Butwhilecitizensaredemandingmorejoined-upgovernmentservices,theyalsowanttheir
inormationtoremainsecureandtheirprivacyprotectedromcybercrimeandidentityraud.
ThechallengeortheGovernmentistomaintainthisdelicatebalanceomakingtheprovision
ointegratedservicesbothsecureandconvenientsoastobuildandmaintaintrust.
Increasing concerns about climate change
Societiesandgovernmentsarebecomingincreasinglyconcernedabouttheenvironment.
Governmentsareacingpressuretodealwiththeeectsoglobalwarming,aoreseeable
declineinossiluelsandgassupplies,andsteeplyrisingenergycosts.Asaresult,thegreening
ogovernmentpoliciesistakingplacearoundtheworld.
ThecurrentGovernmentiscommittedtotakingactiontoreducetheimpactoclimate
change,byreducinggreenhousegasemissionsandbyrespondingtothepotentialimpacts
ounavoidableclimatechange.TheGovernmentisconsideringintroducingacapandtrade
emissionstradingschemeby2010,andamandatoryrenewableenergytargetby2020.5
ThesechangeswillneedtobetakenintoaccountwhenanoverarchingICTstrategyisdeveloped
ortheGovernment.InApril2007GartnerestimatedthattheglobalICTindustryaccounted
or2%oCO2emissions,onaparwiththeaviationindustry.6Gartneralsoestimatedthatlarge
organisationsspendbetween4%and10%otheirtotalICTbudgetsonenergyandthatthis
numbermayquadrupleby2012duetothetwinactorsopower-hungryhardwareandrising
energycosts.7InAustralia,theAustralianComputerSocietyundertookanemissionsauditonthe
amountocarbondioxidebeinggeneratedbyAustralianbusinessesuseoICT.Theresultsothe
auditindicatedthatICTusebyAustralianbusinessesgenerated7.94milliontonnesocarbon
dioxidein2005,equivalentto1.52%ototalnationalcarbondioxideemissions.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.pd
6 Gartner Press Release (April 26, 2007), Gartner estimates ICT industry accounts or 2 percent o 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 or
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.pd
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Introduction
Public sector unding pressures
Eectsoanageingpopulation,globalcompetitionamongvariouseconomies,andclimate
changearecreating,andwillcontinuetoplace,pressureonpublicsectorbudgetstoincreasespendinginareassuchashealth,educationandtransport.TheGovernmentmustndwayso
improvingtheeciencyandeectivenessoitsservicedelivery.Thismeansprovidingvalueor
moneybyimprovingqualityoservice(accessibilityorallandacceptablecitizenexperiences
andoutcomes),andreducingthecostsinvolvedinserviceprovision.
Technology trends
Businesses,individualsandpublicinstitutionsareadoptingawidevarietyotechnologiesand
tosuchanextentthattheyarechangingthewayeachentityunctionsandrelatestoothers.
Governmentsingeneral,althoughmoreconservativeusersosomenewertechnologies,
stillneedtobeawareobroadertechnologytrendsandthepotentialimpactotheseon
governmentpolicies,operationsandservicedelivery.
Forexample,theinternethasmovedtoWeb2.0,amoreinteractivemodelinwhichuser-
generatedcontentisrontandcentre,andhasthepotentialtochangerelationshipswith
citizens,intermediariesandexternalserviceproviders,aswellasamonggovernmentagencies.
Governmentswillneedtoexploreandshittothisnewparadigm.
Manyprivatesectororganisationshavealreadyembracedserviceorientedarchitecture(SOA),
whereICTassetsarealignedtobusinessservicesinastandard,fexibleandarchitectedashion,
andalsothebenetsthatcomewithitsuchasincreasedagility,re-useandreducedcosts.
GovernmentorganisationsareslowlymovingtowardsleveragingSOAinthedevelopmentotheir
applications,butthereispotentialorthepacetobequickenedandorurtherthinkingtodoneat
thewhole-o-governmentlevelratherthanagencyleveltomaximisethepotentialbenets.
Advancesinprocessingpower,storageandmemorytechnologieshavepavedthewayormore
sophisticateduseodataanalyticsandbusinessintelligencetechnologies.Governmentsare
alsousinggeospatialtechnologiesandresourcestooptimiseservicedeliveryandtoimprove
decisionmakinginareassuchascollectionandanalysisointelligenceinormation,protectionocriticalinrastructureandresponsetoemergencies.However,theexplosivegrowtho
data,compliancerequirementsandincreasinglycomplexbusinessenvironmentshavemade
inormationstoragemanagementmorecriticalthanever.Governmentsneedtoensurethat
theyareabletomaintaincontrolovertheirabilitytostoreandmanagethiskeybusinessasset,
havingdueregardtoprivacyconcerns.
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Introduction0
Globalisation
Countriesandsocietiesarebecomingmoreeconomicallyinterdependentacrosssocial,political
andculturalboundaries.Thereisgreaterglobalmovementogoodsandservices,labourandpeople,capitalandtechnologyamongpreviouslyindependentandsovereignentities.
ThesetrendsneedtobeconsideredromanICTperspective.Forexample,globalisationisenabling
largeemergingeconomieswithhighorincreasingeducationalstandards(suchasBrazil,Russia,
IndiaandChina)todrawactivityawayromthedevelopedeconomiesotendeliveringequivalent
servicesataractionotheprice.TheremaybewaysorICTtoharnesssomeothesetrendsto
addressotherchallengessuchastheICTskillsshortage.ThepotentialoroutsourcingICT-related
activitiestolowercostcountrieswithhighlyskilledworkorcesisalreadybeingutilisedbymany
privatesectororganisationstoimprovetheircompetitiveness.Forgovernments,morecomplex
trade-oshavetobemadewhenconsideringwhetherICT-relatedactivitiesshouldbeundertakenoshore.However,evenipoliticalconsiderationslimittheactivitiestoonshorelocations,theremay
bescopeordeployinggovernmentICTworktoreinorceregionaleconomicdevelopmentpolicies.
ICT workorce challenges
AustraliasunemploymentrateatJuly2008was4.3%,andsomepartsoAustraliaare
experiencingevenlowerrates(orexample,theAustralianCapitalTerritoryhadan
unemploymentrateo2.7%inJuly2008).9Coupledwithanageingpopulation,thisrepresents
asignicantpolicyandresourcingchallengeortheGovernmentasamanageroeconomicgrowthandasalargeuseroskilledlabour.
AccordingtoareportpreparedortheAustralianComputerSocietyandtheAustralian
InormationIndustryAssociation10,theAustralianICTindustryislookingatashortallo14,000
jobsby2010,growingto25,000withinanother10years.ThereportalsowarnedthattheICT
skillsshortagewillcontinueatcurrentorworselevelsuntilatleast2012,andarguedthat
temporarymigrantvisasareonlyashort-termsolution.ThereportsaidthatAustraliamustact
quicklytoincreaselocalgraduatenumbersbyatleast12.5%ayearandreducethelossoICT
proessionalstooverseasemployers.
SuchICTskillsshortageswillalsodrivetheneedorbettersharingoICTassetsacrossthe
wholeotheGovernment.InadditiontogrowingitsownICTproessionalsthroughtraining
anddevelopment,otheroptionsmayincludeemployingolderAustralians,attractingmore
emalestoacareerinICT,andpartneringwithacademicinstitutions.TheGovernmentwill
alsoneedtoconsiderstrategiestoensureithassucientskilledICTproessionalstomeetthe
demandsoserviceprovision.
9 http://www.abs.gov.au
10 Centre or Innovative Industry Research Inc. (August 2008), The ICT skills orecast project. First report:
Quantiying current and orecast ICT employment (Executive summary and contents),http://www.acs.org.au/attachments/ICTSkillsForecastingReportExecSummaryAug08.pd
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Introduction
The changed Australian political context
ThecurrentapproachtothegovernanceandmanagementoICTacrossFMAActagencies,
wheretheyhaveveryhighlevelsoautonomy(includingtheabilitytosel-approveopt-instowhole-o-governmentapproachesintheICTdomain),mayhavebeenanappropriatemodelin
thecontextothepreviousgovernmentsobjectivesandpolicies,andthetrendsothe1990s
andearlypartsothisdecade.However,therearenowadierentsetoexternaltrendsand
mydiscussionswiththePrimeMinisterandsomeotherMembersoCabinethaveindicatedto
methatthereisnowaverydierentpoliticalandpublicadministrationagendainwhichitis
appropriatetoconsiderwhetherthestatusquoisstilltorpurpose.
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Chapter One:ViewsromwithintheAustralianGovernment
chaPteR :
views fRom within theaustRalian goveRnmentThischaptersummarisesthekeythemesraisedinsubmissionsromAustralianGovernment
agenciesandin24bilateralmeetingswithagencies.Atotalo41Financial Management and
Accountability Act 1997(FMAAct)agencieswereinvitedtomakesubmissionstothereview.
Theywereaskedaseriesoquestionsabout:
thealignmentotheirICTstrategytotheiroverallstrategicpriorities
howtheymeasuredtheperormanceotheirICTinvestments
howtheymeasuredtheirorganisationscapabilitytocommission,manageanddeliver
ICT-enabledprograms
howtheymeasuredtheeciencyandeectivenessotheirICTspend
theirriskmanagementstrategies
detailsobestpracticesthatcouldbeshared
theirviewsonexistingwhole-o-governmentICTarrangements.
Atotalo40agencysubmissionswerereceivedandreviewed.FouragenciestheDepartment
othePrimeMinisterandCabinet(PM&C),theAustralianNationalAuditOce(ANAO),the
DepartmentoFinanceandDeregulation(Finance)andtheDepartmentotheTreasury(Treasury)
wereaskedspecicquestionsrelatedtotheirrespectiveoversight/governanceroles.Accordingly,
percentagesraisedinthischapterdonotincludeconsiderationoPM&CandtheANAO,butdo
includeFinanceandTreasury,astheyalsoprovidedresponsesontheirICToperations.AppendixD
containsaulllistotheagenciesthatmadeasubmissiontothereview.
1.1. ICT INVESTMENT DECISION MAKING
1.1.1. Prioritising investments
Thirty-veagenciesdetailedormalprocessesorprioritisingICTinvestmentatthe
organisationallevel,withonlythreeagenciesnotprovidinganydetails.Prioritiesareset
throughgovernancearrangements(35agencies),combinedinsomeinstanceswithbusiness
caseprocesses(10agencies)orbudgetmanagementprocesses(sixagencies).
Nineteenothese35agencieswereabletodetailreasonablycomprehensiveprioritisation
techniquesorextensiveassessmentcriteriatorankcompetinginvestments,withsixagencies
activelygroupinginvestmentsintoprioritygroups.However,theother16agencieswereonlyabletodetailbasicprioritisationprocessesandcriteria.
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Chapter One:ViewsromwithintheAustralianGovernment
Agenciescitedtheollowingcriteriausedwhenrankingcompetinginvestmentpriorities:
alignmentwithgovernment,strategicandbusinesspriorities(30agencies)
strategicimpact,value,benetsandsavings(26agencies)
risks(15agencies)
resourcesandcapabilitytodeliver(13agencies)
costsandavailableunding(13agencies)
alignmentwithexistingarchitecture(nineagencies)
dependenciesandprerequisites(threeagencies)
timerame(twoagencies).
1.1.2. Alignment o ICT investments with strategic priorities
Thereviewobservedthatthereareveryewrameworksinplaceatthewhole-o-government
levelorsettingprioritiesorICTinvestmentacrossportolios.Thereisnoormalprocessby
whichagenciescanobtaininormationonICTactivitiesinotheragenciesbeoreinvestingin
ICT.Itwasalsonotedthatthetechnicalcapacityothethreecentralagencies(Finance,PM&C
andTreasury)toassessandadviseonICTinvestmentproposalsisatullstretchduringthe
budgetcycle.Thisresultsineedbackonindividualproposals,ratherthantakingawhole-o-
governmentapproachtoinvestment.
Furthermore,alongstandingeaturenotedbyseveralagencyheadswasthatinvestmentin
ICTtosupportpolicydeliveryhas,insomeinstances,notbeenconsideredbeoreannouncing
policies.PolicymakersandMinistersarenotalwaysullyawarethatinadequateconsideration
odeliveryimplicationsattheoutsetcanhavesignicantadverseimplicationsonthecosto
policydelivery.Therewassomelimitedevidenceobestpractice,wherethoseresponsibleor
deliveryweredeeplyinvolvedinthepolicyormulationprocess.
Attheorganisationallevel,32agencies(82%)notedthattheyensurealignmentoICT
investmentstostrategicprioritiesthroughormalplanningprocessesandgovernancemechanisms.Agencystrategicprioritiesinclude:
enhancingthecapabilityosta(14agencies)
improvingorganisationaleectivenessandeciencytodeliverbetterservices(12agencies)
increasingcommunitycondence(10agencies)
improvingcollaborationandengagement,andstrengtheningstakeholderrelationships
(nineagencies)
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Chapter One:ViewsromwithintheAustralianGovernment
supportingeconomicdevelopment(sevenagencies)
providingsoundandtimelyadvice(veagencies)
deliveringgovernmentpolicy(ouragencies).
AgenciesreportedthatalignmentisacilitatedthroughtheinfuenceoseniorICTexecutives
inagency-widegovernancearrangements.However,inonlyaewcasesdidagenciesindicate
thattheChieInormationOcer(CIO)isamemberotheexecutiveteam.Onlytwoagencies
reportedthattheirICTgovernancestructuresareunderpinnedbyAS8015-2005Corporate
GovernanceoICT.Anadditionaltwoagencieseitherreerencedthestandardintheir
submissions,orstatedthattheyplantouseitintheuture.
1.1.3. Future importance o ICT to government business
Acrosstheboard,agenciesreportedthatICTisaundamentalbusinessenablerandanintegral
partotheiroperations.TherewasalsoaunanimousviewthatICTwillcontinuetoincrease
inimportance.Inparticular,agenciescommentedontheincreasingneedormorerobustand
agilesystemsto:
meetrisingexpectationsromcitizensandgovernment
delivermoreecientandeectiveservicesandoperations
harnessinormationandintelligence
manageincreasedcomplexityintheregulatory,businessandpolicyenvironments.
Nineteenagenciessaidthattheyexpectthedemandoronlinetransactionalinteractionsto
continuetoincrease,withthesaeguardingocitizensinormationanimportantconsideration.
Improvingthelevelocollaborationandinormationsharingbetweenagenciesandother
externalorganisations(orexample,thetradeandinvestmentcommunity,agencieswithstrong
internationallinkssuchaspolicingandpatents)isanimperative(andachallenge)or15agencies.
1.2. PROJECT DELIVERY
Thereareseveralwhole-o-governmentinitiativesthatexamineandreportonthedeliveryo
majorgovernmentinvestmentprojectsandprograms,includingICT-enabledprojects.These
aretheGatewayReviews,ANAOauditactivities,andthePM&CCabinetImplementationUnits
TracLightReports.
GatewayReviewsassistFMAActagenciestoimprovethelikelihoodosuccessuldeliveryo
projectson-time,on-budgetandwiththeintendedbenetsrealised.However,Iheardoneview
thatGatewayReviewrecommendationshave,insomecases,notbeenadopted.
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Chapter One:ViewsromwithintheAustralianGovernment
TheANAOsubmissionhighlightedthatitsauditsoICT-enabledprojectsidentiedareasor
urtherimprovingthemanagementanduseoICT.Theseincludeensuringbusinesscases
includemeasuresobothprojectsuccessandstandardisedcostingmethods.
MostagencyresponsesonhowtheymeasurewhethertheirICTinvestmentsweremeeting
theirplannedoutcomesocusedonlyonnewICT-enabledprojects,ratherthanoninvestmentin
existingbusinessasusualactivities.Responsesrevealedthatmostagencieshaveormalprocesses
inplaceornewprojects,suchasaprojectmanagementrameworksorgovernancemechanisms.
1.2.1. Use o project management rameworks
MostagenciesusesomeormoprojectmanagementmethodologytomanagetheirICT
projects.Twenty-twoagencies(59%)usethePRINCE2methodologyasthebasisotheirprojectmanagementmethodology,withaurthertwoagenciesplanningtointroduce
PRINCE2inthenearuture.Additionally,veagenciesusetheProjectManagementBodyo
Knowledge(PMBOK)tounderpintheirprojectmanagementmethodologies(ouragenciesare
usingPMBOKintandemwithPRINCE2),whileanothertwoagenciesplantoadoptPMBOK.
1.2.2. Use o governance mechanisms
FiveagenciescitedtheirinvolvementinGatewayReviewsasagovernancemechanismor
projectdelivery.Oneagencycitedtheuseoacross-agencyprojectboard,while15agencies
discussedtheiruseointernalprojectboards.Tenagenciesnotedthattheirprojectsreceived
seniormanagementendorsement.
1.2.3. Risk management
Twenty-twoagenciesindicatedthattheirriskmanagementrameworkswerecompliant,
consistentwith,orbasedonAS/NZS4360:2004RiskManagement.
Nineagenciesnotedthattheirauditcommitteeswereresponsibleoroverseeingrisk
managementwithintheagency.Fouragencieshavecentralisedoversightoriskmanagementwithintheorganisationthroughenterpriseriskregisterstomanageagency-widerisks.
Agencieshavetakendierentapproachestoembeddingriskmanagementwithintheir
operations,includingincorporatingriskmanagementwithintheirChieExecutiveInstructions,
integratingriskmanagementwithintheirbusinessplanningandprojectmanagement,
applyingprojectmanagementmethodologiessuchasPRINCE2,anddesignatinganagency
riskmanager.
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Chapter One:ViewsromwithintheAustralianGovernment
1.2.4. Benefts realisation plans
Twentyagenciesreportedsomeormoevaluationobenetsattheendotheproject
comparedtothoseidentiedintheprojectinitiationdocuments.Eightagenciesreportedthattheyarepreparingtointroduceormalbenetsrealisationevaluationprocesses,while
veagenciesnotedthattheytrackbenets,butdidnotoerevidenceoaormaldedicated
process.Twoagenciesdidnotdiscussbenetsrealisation.
1.2.5. Evidence rom recent ICT projects
Agencieswereaskedtoprovidedetailsotheir510majorICT-enabledprojectsandhowthey
measuredtheirsuccessintermsocost,time,specicationanddeliveryoanticipatedbenets.
Agenciesprovideddetailso193completedprojects.Table1.1detailsobservationsmade
regardingtheperormanceotheseprojects.
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Chapter One:ViewsromwithintheAustralianGovernment
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
24% (46) were silent on the
question
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
6% (11) were silent on the question
Thirtyfourofthe193projectsrecordedexpenditureofmorethan$5million.Table1.2detailsobservationsmaderegardingtheperformanceoftheselargerprojects.
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
50% (17) were silent on the
question
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
50% (17) were silent on the
question
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
15% (5) were silent on the question
1.3. ORGANISATIONAL CAPABILITY
Thereviewaskedagenciestoprovidedetailsohowthecapabilityotheirorganisationto
commission,manageanddeliversuccessulICT-enabledprogramsismeasured.Italsoasked
agenciestoprovideanassessmentotheircurrentcapability,andanyplanstoimproveit.
Table 1.1 Perormance o 193 completed projects
Table 1.2 Perormance o projects over $5 million
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Chapter One:ViewsromwithintheAustralianGovernment
1.3.1. Current assessment o capability
Inrespondingtothisquestion,onlythreeagenciesprovidedanassessmentotheir
organisationsoverallcapability,withtheremainingagenciesinterpretingthequestionsolelyasICTcapability,aterbeinggivenanopportunitytoreconsidertheirresponse.Sixagencies
providedahighassessmentotheirICTcapabilities,while15agenciesstatedthattheirICT
capabilitiesweremediumandeightsaidtheywerelow.Theremainingagenciesoeredno
assessmentocapability.Intheabsenceoacommoncapabilityramework,agenciesuseda
rangeopartialmeasurestomaketheseassessments.
1.3.2. Measurements o capability
SeventeenagenciesmeasuredtheircapabilitybywhetherICThadbeenabletodeliveragainst
thebusinessrequirementsinatimelymanner.Twenty-veagenciescitedtheirstrongproject
managementcapabilitiesasevidenceotheirstrongcapabilities,whilevepointedtostaand
usersatisactionsurveysasanindicatorotheircapability.
Thereissomeusebyagenciesoormalassessmentrameworkstoassesscapability.Seven
agencieshaveusedtheSotwareEngineeringInstitutesCapabilityMaturityModelIntegration
(CMMI)toassesscapabilityandaurtheragencyplanstouseCMMI,butthesehavemainly
beeninormalinternalassessments.
Atotalo11agenciesreportedusingtheITGovernanceInstitutesControlObjectivesor
InormationandRelatedTechnology(COBIT)maturitymodels,whichprovideamanagement
toolenablingbenchmarkingandtargetingomaturitylevels.
EighteenagenciesreportedusingInormationTechnologyInrastructureLibrary(ITIL),whilea
urtherouragenciesreportedthattheyareplanningtoadoptit.Onlyoneagencynotedthatit
hadundertakenanITILProcessMaturityAssessment,conductedbyanexternalprovider.
Oneagencyobservedthatthereisnoevidencethatcurrentinvestmentapprovalprocesses
includeanyrigorousandobjectivemethodologyorassessingtheorganisationalcapabilityo
anagencyseekingundingorICT-enabledprojectsduringthebudgetprocess.Equally,thereisnoassessmentothelikelihoododeliveringprojectoutcomes.
1.4. PEOPLE
TwelveagenciescommentedontheadverseimpactoICTskillsshortages,bothinsubmissions
andduringbilateralmeetings.ThereisgeneralagreementamongtheseagenciesthatICTskills
shortagesarewidespread,andthatanagencysabilitytoattractandretainhighlyskilledand
motivatedpeoplehasasignicantimpactonbotheciencyandeectiveness,althoughve
agenciesobservedthattheyarenotexperiencingcurrentpressureromshortages.
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Chapter One:ViewsromwithintheAustralianGovernment0
Thoseagenciesthatreportedanadverseimpactotheskillsshortagesdiscusseditintermso
itseectonagencycapability.SomeagenciesnotedthatbothBAUandproject-relatedactivity
wereatrisk.Oneagencyalsonotedthatitssupplierswereconstrainedintheirabilitytoservice
contracts,asaresultotheskillsshortage.Theimpactocompetitionbetweenagenciesorscarceskillsoncontractorcostswasalsocommentedupon.
Agenciesareturningtoamixosolutionstocopewithskillsshortages.Theseinclude:
Adoptionoworkorceplanning,togetherwithfexibleemploymentstrategiestodealwith
anageingICTworkorce.FouragenciesreportedimplementationoanICT-specicworkorce
plan,whiletwomorearedevelopingsuchplans.
Relianceoncontractors,withheavypremiummarketratespaidbysomeagencies.Many
agenciescommentedthattheybelievedtheirpanelarrangementswereverysuccessul.
Partneringwithprivatesectororganisationstodeliverprojects.
LocationoICTstaoutsideoCanberra.Duringagencybilateralmeetings,threeagencies
notedthattheyhadconsciouslymovedICTpositionstootherlocationsthroughoutAustralia
inresponsetotheICTskillsshortage.11Oneagencynotedthatthisapproachhad,tosome
extent,bueredthemromtherisksinherentintheskillsshortage.Thisagencynotedthat
projectworkwaseasiertodispersethanongoingproductionsupport.
Internationalrecruitment.
Educationandgraduaterecruitment,includingpartneringwithtertiaryinstitutions,running
traineeshipprograms,andsupportingapprenticeships.Twoagenciesreportedthattheyhavepartneredwithtertiaryinstitutionsinaneorttoproducegraduatesskilledintheiragencys
particularrequirements.TheDeenceMaterielOrganisationispartneringwithatertiaryinstitution
todevelopaMastersinprojectmanagementwhichisopentoallgovernmentemployees.
1.5. MANAGING ICT SPEND
AgencieswereaskedhowtheyensuredthattheirICTspend(bothoperatingandcapital)isas
ecientandeectiveaspossible,andtoprovidedetailsotheperormancemetricsusedto
measuretheeciencyandeectivenessotheirICTunction.
1.5.1. Measures o efciency
VeryewagenciessaidthattheyusedmetricstoassesstheeciencyotheirICTspend.Only
twoagenciesregularlyreportedeciencymetricsandtargetstotheirseniorexecutive.A
urthertwoagenciessaidthattheyusedeciencymetricsannually,whilesevenreportedthat
theyundertakeeciencybenchmarkingonanadhocbasisusingcontractedserviceproviders.
11 It is recognised that many more agencies have ICT capability in other locations outside o Canberra due to
their headquarters being located in non-Canberra locations, and other business reasons. However, as reportedin 3.2.3, 79% o ICT sta are located in the Australian Capital Territory (ACT).
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Chapter One:ViewsromwithintheAustralianGovernment
Fouragenciesaredevelopingeciencymeasurementmetricsorareimplementingactivity-
basedcostingtounderstandtheirICTcosts.Therewassomeevidenceomultipleinstanceso
taxpayersmoneybeingspenttoobtainbenchmarkdatainareassuchasdesktops.
1.5.2. Measures o eectiveness
Twenty-sixagenciesreportedthattheyemploymetricstomanagetheeectivenessotheirICT
operation,suchasavailability,outagereporting,numberoclientapplicationservicerequests
completed,andcustomersatisactionsurveys.Aurthertwomanagetheeectivenessotheir
ICTserviceprovidersthroughtheuseooperationalmetrics.
1.5.3. Other mechanisms to measure efciency and eectiveness
Otheremainingagencies,ninereportedusingqualitativeratherthanquantitativeeciency
andeectivenessmeasures,including:
projectmanagementrameworkssuchasPRINCE2
governancecommitteesthatmonitorICT-relatedprojectsandoperations
activebudgetmanagementcomparingactualcosttobudgets
procurementapproachessuchasmarkettestingandpanelcontracts
servicedeliveryreportingooutsourcedarrangements.
Thesemeasureswerealsousedbyagenciesthatdidreportusingquantitativemetrics.Two
agenciesdidnotreportusinganymethodstomanagetheirICTspend.
1.5.4. Future plans to increase efciency and eectiveness o ICT spend
Inadditiontothoseagenciesalreadyusingtechniquessuchastheollowing,otheragencies
reportedutureplanstoincreasetheeciencyandeectivenessoICTspendby:
increasinguseoconsolidation,virtualisationandcentralisationoinrastructure(sevenagencies)
markettestingoutsourcedarrangements,inrastructureandsystems(sixagencies)
improvingundingandgovernancesystems(veagencies)
rereshinganddeployingupdatedtechnology(veagencies)
adoptingastrongerarchitecturalapproachtoICT(ouragencies)
implementingrecognisedrameworks,suchasservicemanagementandotherITILbased
approaches(ouragencies)
drivinggreatercost-ecienciesinprocurementthroughpartneringwithotherstoobtain
volumediscounts(ouragencies)
implementingEarnedValuemanagement(twoagencies).
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Chapter One:ViewsromwithintheAustralianGovernment
1.6. PROCUREMENT AND ICT OUTSOURCING
Althoughnotexplicitlymentionedintheinvitationtoagenciestomakeasubmissiontothe
review,manyagencieshadpointsoviewonprocurementandICToutsourcingandtheirrelevancetoeectivenessandeciency.
1.6.1. $80,000 tender threshold
FiveagenciesdiscussedthedicultiesarisingromtheCommonwealthProcurement
GuidelinesrequirementoranopentenderoranyICTacquisitionestimatedtocostmorethan
$80,000.ThisissuewasalsoraisedatameetingotheChieInormationOcerForumwhichI
attended.
1.6.2. Common-use contracts and supplier panel arrangements
Nineagenciessawmeritingreateruseocommon-usecontractsandsupplierpanel
arrangementsdevelopedbyacentralbodyinareasogenericneedoruse.Therewas
recognitionthatvolumesourcingarrangementscurrentlyunderdevelopmentcouldservicethis
need.Aewagenciessupportedcommonapproachestobenchmarking.
Twoagenciesstatedthatsuchawhollycentralisedprocurementunctionislikelytoadda
signicantbureaucraticoverheadthatwouldnotbejustiedbyeciencies.Fouragencies
saidthatanymovetocentre-ledprocurementmustensurethatagenciesarenothinderedinachievingtheirspecicbusinessoutcomes.
1.6.3. ICT outsourcing
Agenciesuseamixoinsourcedandoutsourcedarrangements.Someagenciesaremoving
torenewtheiroutsourceddeliveryarrangements,whileothershaveneveroutsourcedand
alwaysretainedaninsourcedICTcapability.Otheragenciesaremovingbackromoutsourcedto
insourcedarrangements,andothershaveamixoinsourcedandoutsourcedarrangementsbut
notaspartoaclusterarrangement.Thisclusterarrangement,requiredundertheInormation
TechnologyInrastructureConsolidationandOutsourcingInitiativecommencingin1997,
attractedcriticismromthreesmalleragencies.Theyoundthattheirneedsarenotbeing
cateredorasoutsourcedprovidersdedicatemostattentiontotheneedsolargeragenciesin
thecluster.
Atmeetingswithagencyheads,Iheardthattheoutsourcinginitiativewashandledtoo
directionallybyacentralauthorityandthatthearrangementsadverselyimpactedupon
agenciesabilitytounctionecientlyandeectively.Therewasmuchcriticismotheinitiative,
withagenciescomplainingothelong-termimplications.Forexample,oneagencysaidthatit
wasnowmovingromoutsourcedtoinsourcedservices,withthemaindriverbeingreducedcosts.Anotheragencystatedthatitsexpectationsorservicedeliverywerenotmetbytheir
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Chapter One:ViewsromwithintheAustralianGovernment
outsourcedserviceprovider.Concernwasexpressedbyagencyheadsthattheclusteringo
agencieswasrandomandtherewaslittlebusinessalignmentintheclusters.
InDecember2000,areportontheReview of the Whole-of-Government InformationTechnology Outsourcing Initiative(theHumphryReport)wasconsideredbytheGovernment.
TheGovernmentagreedwiththerecommendationwhichsawutureresponsibilityor
implementingtheoutsourcinginitiativeullydevolvedtoagencyChieExecutivesorBoards.12
1.7. USE OF BEST PRACTICE
DuringthecourseothereviewIsoughttodeterminetheextenttowhichAustralian
Governmentagencieswereengagedinbetterpracticeandbestpractice.Exampleswere
soughtromagencysubmissions,bilateralconsultationsandthroughwiderinvestigations.Inmyview,thereareanumberobetterandbestpracticeexamplesacrossgovernmentwhich
couldbemorewidelyadopted.Whilethereisbroadawarenessoaewwell-knownexamples,
thesetendtobetheexception.Thereisnosystematicmeanstopromulgatebestpractice
morewidelyand,asaresult,thereisonlylimitedawarenessbyotheragenciesomostothese
initiatives.Thereisclearlypotentialtoleveragetheseexamplesbypublicisingthemmore
eectively.Anillustrativeselectionoexamplesisincludedbelow.
1.7.1. SmartForms
TheDepartmentoInnovation,Industry,ScienceandResearchhasdevelopedacentreo
excellenceinSmartForms.SmartFormsareaplatormtodeliveradvancedonlineormsand
servicesacrossgovernment.TheyenabletheGovernmenttoprovidemoreinormationand
servicesonlinetothebusinesscommunityandenablecompaniestocompletetheirregulatory
andreportingrequirementsmoreeciently.Therearecurrentlyover650liveSmartForms
availableonthesite,resultinginsharedorms,templates,inrastructureandknowledge
acrossmultiplegovernmentagencies,includingCentrelinkandFinance,andseveralstate
governments.Thiswhole-o-governmentsolutionhasbeenavailablesinceNovember2005to
governmentagenciesthatownbusiness-relatedorms.
1.7.2. Architecture-based design
Centrelinkssystemoonlineclaimsandservicesorcustomersprovidesaacilitythrough
whichcustomerscanviewandupdatearangeopersonaldataovertheinternet.Customers
canaccessinormation,correctinaccurateinormation,lodgeclaimsandmanagetheir
Centrelinkaairs.Centrelinkisemployinganewserviceorientedarchitecturetomakeunctions
anddatacontainedinitsmainrame-basedlegacyapplicationsavailabletoapplicationsusing
12 Humphry, Richard AO (December 2000), Review of the Whole-of-Government Information TechnologyOutsourcing Initiative.
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Chapter One:ViewsromwithintheAustralianGovernment
webservices.Thisallowsinormationtobecollectedromcitizenswithlittleornointervention
romCentrelinksta.Onlineservicesarenowbeingdevelopedusingindustrystandard
technology,providinganincreasingopportunitytodeliverservicesthatcrosstraditionalsystem
andagencyboundaries.Centrelinkhasoundthatre-useosystemsandunctionalityis
deliveringcost-eciencies,reducingdevelopmenttime,andprovidingstandardised,consistent
servicesanduserinteracestocustomers.Onlineservicesunderdevelopmentwillre-use
existingwebservicestoleveragepreviousinvestmentinICT.
1.7.3. Project maturity assessments
TheDeenceMaterielOrganisationhasimplementedatechniquewhichassessesthematurity
oprojectsastheyprogressromconcepttoin-service.Projectsareassessedagainstthecriteria
oschedule,cost,realisationorequirement,understandingothetechnicalsolutionandarrangementstooperateandsupportthecapability,technicaldiculty,industryperormance
issues,andoperationsandsupport.
1.7.4. Secure communications
FedLinkisawhole-o-governmentencryptionsystemthatallowsdataclassiedupto
andincludingPROTECTEDandRESTRICTEDtobetranserredsecurelyamongAustralian
Governmentagenciesacrosstheinternetoranyinsecureinrastructure.Sinceestablishmentin
2001,FedLinkhasexpandedtoprovideservicesor98AustralianGovernmentagencies(52%o
allFMAActandCommonwealth Authorities and Companies Act 1997agencies).
TheinitiativeoperatesunderaheadagreementbetweenFinanceandtheFedLinkservice
provider.Individualagencycontractsarebetweentheagencyandtheserviceprovider.FedLink
isimplementedasauser-paysundingmodelandiscost-ecientincomparisontosimilar
commercialoerings.Overthepast7yearsinoperation,FedLinkhasprovedtobearobustand
eectiveservicewithminimalimpactontheagencyorenduser.
1.7.5. Sourcing strategies
Someagenciesarespeciyingoutcomesratherthantechnicalspecicationsasthebasiso
competitivetendering.TheDepartmentoForeignAairsandTradestatesthisapproachhas
identiedthatcommercialo-the-shel(COTS)productscanmeettheneedsothebusiness
withoutbespoking.
SeveralagenciesnominatedspecicinstancesotheirICTsourcingasbestpractice.These
includedabestobreedpolicy(AustralianElectoralCommission);ahybridsourcingmodel
(DepartmentoInrastructure,Transport,RegionalDevelopmentandLocalGovernment);
multi-partyarrangements(AustralianCustomsService);andleveragingocross-portolio
arrangements(DepartmentoHumanServices).
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1.7.6. Collaboration with industry
TheAustralianTaxationOce(ATO)hasaSotwareIndustryLiaisonUnitwhichwasestablished
toassisttax-relatedsotwaredeveloperswithchangesthatcameaboutduringoneoAustraliasmajortaxreorms.TheATOhascontinuedtocollaboratecloselywithsotware
developerstoimproveandstreamlinetheirinteractionswithATOsystems.Forexample,the
unitmakesavailablealltax-relatedinormationrequiredbysotwaredeveloperstoreadily
interacetheirsystemstotheATO.
1.7.7. ICT management rameworks
Asnotedinsection1.3.2,18agenciesareusingITILandaurtherourareplanningto
implementit.Otheseagencies,eightaresucientlycondentinitsusetonominateitasa
bestpracticerameworkorpromulgationacrossgovernment.ITILpracticesarecommonly
implementedinareasoproblemmanagement,incidentmanagement,changemanagement
andcongurationmanagement.
Likewise,thereare11agenciescurrentlyusingtheITGovernanceInstitutesCOBITasa
managementtool,enablingbenchmarkingandtargetingomaturitylevels.Fouragencies
suggestedgovernment-wideuseoCOBIT.
1.7.8. Earned Value management
EarnedValueisasetobestpracticeprojectmanagementtechniquesthatintegratecost,
scheduleandtechnicalperormance.EarnedValueestablishesobjectivemeasuresotheactual
workachievedcomparedtotheplanorthatwork.Itrequiresbetterup-rontplanningand
providesanagencyanditscontractorwiththesameperormancedataagainstwhichproject
progresscanbemanagedandreviewed.
TheATOhasrealisedgreatertransparencyothestatusoitsChangeProgrambyemploying
SimpliedEarnedValuemethodologyandxedpricemilestonepaymentsoritscontractor
serviceswithAccenture.SimpliedEarnedValueprovidesapaymentmethodwherethedollar
amountclaimedbytheproviderrelatestotheamountoworkperormed.Warranty,stagegateandrisk-rewardpaymentsremainxedprice,withspecicpoint-in-timetriggersandmilestone
achievementcriteria.Invoicesarereceivedmonthlyorthepreviousmonthsworkeort.
TheDeenceMaterielOrganisationalsousesamixoEarnedValueandprojectmilestonesto
manageprojects.Itusesthetechniqueinlarger,morecomplexprojects(usuallyatleast$20
millionandwithsystemintegrationinvolved).
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1.7.9. Knowledge management
TheAustralianBureauoStatistics(ABS)KnowledgeManagementEnvironmentdelivers
ongoinginormationproductivitythroughprovisionoanenablingdesktopITenvironment,whichacilitatescollaborationandallowstheinormationproducedtobemanagedas
acorporateasset.Theplatormintegratesportal,collaboration,mail,workfow,ofine
capabilities,documentmanagementandrecordkeeping,andsupportstheorganisational
objectives.Thisincludesthecreation,production,publicationanddistributionoinormation,
includingtheautomateddeliveryopublicationsandcontenttotheABSwebsite.
1.7.10. Energy efciency in data centres
TheTreasuryreportedthatithadinvestedinanewdatacentrewithaconsciouseorttoreduce
itscarbonootprintbyre-usingthecoldairinCanberraorthecentrescoolingrequirements.
1.7.11. Search
TheAgencySearchServiceallowsagenciestoleveragethewhole-o-governmentsearchservice
providedthroughaustralia.gov.au,toprovideasearchonagencywebsites.Thirty-twoagencies
haveullyimplementedtheuseothisserviceover57websites.Agenciesusingthesearch
serviceincludetheBureauoMeteorology,MedicareAustralia,theDepartmentoHealthand
Ageing,andFinance.
1.7.12. Successul delivery o technology reresh
CentrelinksITRereshprogramhasincreasedtherangeoservicesthatCentrelinkscustomers
arenowabletoaccessonline.AccordingtoanauditbytheANAO13,itsignicantlyadvanced
onlineservicesorprivatesectororganisations,enablingthemtoveriycustomercircumstances
andtoexchangeinormation;reducedtheriskoservicecompromiseorailureduetothe
ageingoitssystems;andestablishedanEnterpriseDataWarehousethatwillprovidethe
capabilitytosubstantiallyimproveitsmanagementinormation.Overtheveyearsothe
Rereshprogram,Centrelinkcommittedtoachievingsavingsinadministeredpayments(suchasbenetandpensionpayments)o$184million,andsavingsindepartmentalexpenseso
$120.9million.Centrelinkachievedthecommittedbudgetarysavings.
1.7.13. Customer-ocused service delivery
TheATOe-taxserviceisareetaxreturnpreparationsotwarethatensuresmostreundsare
issuedin14days.e-taxhelpscitizenspreparetheirincometaxreturnandbabybonusclaim,
andthenlodgeonline.ItalsoletscitizensdownloadtheirMedicarebenettaxstatement
details.e-taxwasrstintroducedin1999orthe199899nancialyear.
13 Audit No. 17, 2007-08, Management o the IT Reresh Program.
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Chapter One:ViewsromwithintheAustralianGovernment
TheABSe-CensusacilityisatoolthatprovidesallAustralianswitharobust,secureandeasy
alternativetocompletingthepaperCensusorm,andmakesiteasierortheABStocount
peoplelivinginisolatedplaces.Importantly,itisalsoaccessibleorpeoplewithadisabilityasit
usesassistivetechnologies.
1.7.14. Green ICT
TheDepartmentoDeence(Deence)implementedaGreenICTinitiativeinJune2008.By
enorcingautomaticlog-oandthenautomaticshut-downonitsmajorPCfeet,thenumber
omachinesletpoweredonaterhoursellrom50,000to3,000.Electricitysavingsromthis
initiativeareexpectedtoexceed$5millionannually.Theequivalentcutingreenhousegas
emissionsisexpectedtoexceed30,000tonnesannuallytheequivalentotaking7,500cars
otheroadpermanently.
1.8. VIEWS ON EXISTING WHOLE-OF-GOVERNMENT ARRANGEMENTS
Agencieswereaskedortheirviewsonexistingwhole-o-governmentarrangementstoguide
theGovernmentsuseandmanagementoICT.Severalrameworks,guides,strategiesand
policiesalreadyexistwithinthewhole-o-governmentenvironment,andagencieswereasked
toindicatetheirlevelouseotheserameworks,andanyissuesthatimpededuse.
1.8.1. Current governance mechanisms
Averysmallpooloagenciescommentedonthecurrentgovernancemechanisms,mainly
agenciesthatareinvolvedintherelevantcommittees.Commentsweremadeonanindividual
agencybasis.
AgenciesreportedthattheSecretariesCommitteeonICT(SCICT)providesonlylimited
guidance.Oneagencysaidthattheorumstrugglestodelivervalueoncollaborationandis
strugglingtodetermineitslevelointeractionwithagencies.TheagencysaidthattheSCICT
hasnoauthoritytobecriticalandailedtoaectdecisionscomingoutotheBudgetprocess.
OneotheSCICTmemberssaidthattheyexpectedthattheorumwouldsharelearnings,butthisdidnothappen.Instead,theorumactedasasandtrap,slowingdowninitiativesrom
agencies.PM&CsaidthattheGovernmentneedstoreviewtheSCICTstermsoreerenceand
modusoperandi.OneagencysuggestedthattheSCICTcouldprovidevaluebyprovidingaline
osightorwhole-o-governmentprogramstopoliticians.
Agenciesreportedthatotherorums,suchastheCIOCommitteeandtheBusinessProcess
TransormationCommittee,areuseulorsharingideas,althoughoneagencycommentedthat
thesecommitteestendtoshareissuesratherthansolvethem.
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1.8.2. Views on the Australian Government Inormation Management Ofce
Commentswereoeredbyagenciesonanindividualbasis.
Oneagencynotedthat,whiletheaspirationbehindtheAustralianGovernmentInormation
ManagementOce(AGIMO)wasgood,AGIMOhasbeenaroundorsometimeandthereis
stillnoevidentreturnoninvestment.AnotheragencynotedthatAGIMOhasnoauthorityover
agenciesandthatthiswasasignicantissue.OneagencynotedthatAGIMOsrolemightbe
betterplacedinanotherpartogovernment,suchaswithinthePM&CCabinetImplementation
Unit,asitsrolewithinFinancewasproblematicbecauseFinancesroleistoreduceexpenditure.
AgencieseltthatAGIMOdoeshavearoletoplayintermsoleadingandacilitatingworkon
architecture,rameworksandstandards.Therewassupportorexistingcentralrameworks,
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-o-governmentpolicies.
Sevenagencies,indierentways,expressedaviewthatagenciesneededtoremain
autonomousduetoeithertheuniquerequirementsotheirbusiness,orbecausetheycould
driveabetterpricingdealasasingleentity.
Fouragencieshighlightedthelackocommonstandardsandacommonlanguageasinhibiting
whole-o-governmentapproaches.
AnotherouragenciesobservedthatitisdiculttodeployAGIMOrameworksandguidanceas
theGovernmentdoesnotprovideanyextraundingtoenableagenciestoadoptthesepolicies.
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Chapter One:ViewsromwithintheAustralianGovernment
1.8.4. Future coordination
Nineagenciesstatedthattheysawvalueinsomeormostrongcentralleadershipand
authoritytocoordinatewhole-o-governmentarrangementsincertainareas,orexample,architectureandbusinessprocessdesign.Fiveagenciesnotedthatanyrameworksand
guidanceintroducedundersucharrangementswouldneedtobebackedbyastrongbusiness
case,oropt-inprovisions.
SevenagenciesexpressedconcernoveranytrendtocentraliseICTdecisionmakingthat
couldnotaccommodateuniquerequirementsoin-houseandcollaborativeapplications
development,duetothehighlyspecialisednatureoagencypurchases.Theseagencieseltthat
thepossibleimpositionoawhole-o-governmentinitiativecouldaectanagencysabilityto
operateecientlyandeectively.
1.9. VIEWS ON DATA CENTRES
Duringanumberoagencybilateralmeetings,theissueoinadequatecurrentdatacentre
arrangementsarose.Keypointsraisedincluded:
Age.WithewexceptionsCanberrasexistingdatacentreacilitiesareageingandexperience
dicultymeetingtherequirementsocurrenttechnologyand/oravailabilitydemands.There
areexamplesodatacentreswithintheACTthatarehostedbyprivateorganisationsthat
havehadlittleinvestmenttoaccommodatechangingtechnologydemands.
Power.AgenciesraisedconcernsoverCanberrasrelianceonasinglepowergrid.14
Asubsequentsurveywasundertakenwiththe16largestagencies(excludingDeence)tohelp
inormandquantiythemagnitudeothedatacentreissue.Table1.3containsahighlevel
summaryondings.Inaddition,12otheagenciesidentiedhavingmorethanoneotheir
datacentresintheACT.
14 There are two eeds rom New South Wales to the single ACT electricity grid. One eed provides 85% o
electricity to the ACT and the other 15%. The smaller 15% eed is only to the immediate Fyshwick area and is
insufcient to support agency needs. Agencies with data centres in Canberra are thereore susceptible to thesingle ACT power eed.
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Chapter One:ViewsromwithintheAustralianGovernment0
Table 1.3 Summary of data centre locations of the 16 largest agencies(excluding Defence)
Agencyself
managed
facility
within
ACT
14SharedfacilitywithinACT 17
TotaldatacentreslocatedinACT 31AgencyselfmanagedfacilityoutsideoftheACT 8(7ofthesebelongtotheABS)
SharedfacilityoutsideofACT 6
TotaldatacentresoutsideofACT 14Totaldatacentres 45
Thissurveyalsoidentiedtheollowing:
Capacity.Excludingremotesites,thetotalidentiedcapacityoragencydatacentresis
10,484m.Thetotalidentiedunusedcapacityis1,815m.WithintheACTthetotalidentied
capacityis8,316mwithanunusedcapacityo1,463m(17.6%).However,18datacentreswithin
theACThaveidentiedashaving10morlessavailablecapacity.Wheretheagencyisnotinan
existingsharedacilityanyunusedcapacityisnottranserabletoanotheragencyoruse.
Availability.UsingtheTierClassicationSystemotheUptimeInstitute15ordatacentre
availability,16otheidentieddatacentresarebelowthetierlevelidentiedbyagenciesthat
meetstheircurrentminimumavailabilityrequirements.
1.10. VIEWS ON THE ICT INDUSTRY
Duringthebilateralmeetings,anumberoagenciesexpressedconcernsabouttheICTindustry
basedontheirexperiences.Theseincluded:
thatindustryrepeatedlyover-promisesintendersandunder-deliversinpractice
industrydoesnotpracticewhatitsuggeststhatagenciesshoulddo
thatthequalityoresourcesinimplementationdoesnotmatchthequalitypromisedduring
tenderingandcontractnegotiations.
1.11. ICT ARRANGEMENTS IN MINISTERIAL OFFICES
Duringthecourseothereview,Iwasmadeawareoanissueaectinginteroperabilityo
ICTsystemswithinministerialocesatParliamentHouse,Canberra.Thisissueservesas
areminderotheimportanceointeroperability,commonsystems,andtheproblemsthat
canresultromanautonomousapproachtoICTsystems.TheissueisoutsidetheTerms
oReerenceormyreview,buttheconcernswerepassedontoFinance,whichhassome
responsibilityorprovidingservicestoMinisters.
15 See http://uptimeinstitute.org/wp_pd/(TUI3026E)TierClassifcationsDefneSiteInrastructure.pd
Table 1.3 Summary o data centre locations o the 16 largest agencies(excluding Deence)
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Chapter Two:ViewsromoutsidetheAustralianGovernment
chaPteR :
views fRom outside theaustRalian goveRnmentThischaptersummarisesthekeythemesraisedbythoseoutsidetheAustralianGovernment
(theGovernment)andrepresentstheviewso:
ICTcompanies
ICTindustryassociations(includingtheAustralianInormationIndustryAssociation(AIIA),
AustralianIndustryGroup,andOpenSourceIndustryAustralia)
consultingrmsworkingintheICTindustry
individualsworkingintheICTindustry
ICTrecruitmentrms
oneproessionalbody
onetradeunion
oneacademicinstitution
onestategovernment.
Atotalo72submissionswereanalysed,with51othesehavingbeendirectlyinvitedto
provideasubmissiontothereview(seeAppendixD).Thischapteralsotakesintoaccountviews
raisedduringbilateralmeetingsandroundtablediscussionswithvariousexternalstakeholders
andstategovernmentCIOs(seeAppendixE).
2.1. BETTER UTILISATION OF ICT ASSETS
TherewasageneralviewacrossindustrythatthereisagreatdealoduplicationoICTsystems,
applicationsandinrastructurewithintheGovernment,stemmingromthedecentralised
andindependentwayagencieshaveinvestedinICT.Manysubmissions(29)commentedonsignicantopportunitiesortheGovernmenttorealiseecienciesbyrationalising,
standardising,consolidatingandsharingorre-usingcurrentassets.Inparticular,theollowing
areaswerehighlighted.
2.1.1. Bandwidth and network inrastructure
Fourteensubmissionsindicatedthataggregatingandsharingnetworkconnectionsand
gatewayscouldachievesignicantsavings.OnecompanypointedoutthattheGovernment
otenhas2030datanetworkconnectionsperregionalcityortownacrossAustralia,witheachagencyimplementingadedicatedconnectionto/romCanberra.
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Chapter Two:ViewsromoutsidetheAustralianGovernment
Aew(4)alsoeltthatthephysicalbrethatmakesuptheIntraGovernmentCommunications
Network(ICON)issignicantlyunder-used.Itcouldprovideaoundationorestablishinga
sharednetworkedserviceinrastructureorarangeosharedservices,aswellasdeliveringan
evenbroaderrangeotelecommunicationsservicesmorecost-eectively.
2.1.2. Data centres
Industrybelievedthatgrowthintechnologydemandischallengingthephysicalconstraints
ondatacentresglobally,andtheGovernmentisnoexception.Industrybodiespointedtothe
ollowingactorsashavinganimpactonthecurrentdatacentreacilitiesoagencies:
Servergrowth.Gartner16estimatesthatthecurrentglobalcompoundannualgrowthrate
oserversis12%,butoneindustrybodyhasidentiedittobeashighas18%orsome
governmentdatacentres.Thiscontributessignicantlytodemandondatacentrefoorspace.
Datacentrefoorspace.Despitemajoradvancesinconsolidationandservervirtualisation
technology,Gartner17estimatesthatthedemandordatacentrefoorspaceisorecastto
bearound510%ayear.Withmanydatacentreseitheratornearcapacity,thisposesa
signicantissueormanyagencies.
Heating,ventilationandair-conditioning(HVAC).Datacentresrequirestablethermal
conditions.Thecurrentgrowthinpowerdensityduetochangingservertechnologyis
projectedbyGartner18tobe3.5KW/m2overthenext5years.MostgovernmentHVAC
systemsprovidepressurisedairviaaalsefoortothebaseoaserverrack,andthepractical
limitationosuchasystemis1KW/m2.Thisdiscrepancywillseeanincreaseinthermal
hotspots,andaconsequentneedtoimproveHVACdesignandimplementation.
Growthindemandorpower.Asampleodatacentrepowerdemandoroneagencyshows
thatdemandorpowerinitsdatacentrehasgrownby30%compoundannualgrowthrate
overthepast5years(rom230KiloVolt-Ampsto850KiloVolt-Amps).
Eciency.UsingtheUptimeInstitutesdatacentrecostmodellingtool,datacentreeconomy
improvessignicantlybetween500m2and1,000m2.(Note:Othe45datacentresreerred
toinsection1.9,onlyourexceed500m2).
Weightandfoorloading.Currently,typicalgovernmentdatacentrefoorloadingcapability
isabout450kilogramsperrack.Theweightonewservertechnologypopulatingtheseracks
hasincreasedrom380kilogramsperracktoover1,000kilogramsperrackoverthepast
5years.Asaresult,racksarenotbeingullyutilisedandthereisarequirementorimproved
designandimplementationinordertoimprovefoorspaceutilisation,providedHVAC
limitationscanalsobeovercome.
16 Gartner (August 2006), A message rom 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 beore the storm.
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Chapter Two:ViewsromoutsidetheAustralianGovernment
Oneindustrybodyidentiedthatdatastoragedemandisgrowingbyasmuchas60%per
annum.ThisgrowthimpactsonHVAC,foorspace,powerdemandandICTstanumbers.
GreenICT.DatacentresarecontributingsignicantlytotheGovernmentscarbonootprint.AccordingtotheUptimeInstitute,datacentresaccountor0.5%ototalworldwideenergy
consumption,andenergyconsumptionodatacentreshasdoubledbetween2000and2008.
Intheabsenceoanoverarchingwhole-o-governmentviewondatacentres,agenciestendto
provideorsourcetheiracilitiesautonomously.Thisleadstounnecessaryduplicationacross
governmentonotonlydatacentreacilities,butduplicationindatacentreoperations,orexample,
specialisedsupportstaandprocesses.Fourteensubmissionsindicatedthatconsolidatingagency
datacentreacilitieshasthepotentialtorealisesignicantsavingsortheGovernment.
2.1.2.1. Capacity management
Thereviewsattentionwasdrawntoanalystsreportsquotingaveragecapacityutilisationo
serversacrosstheindustryasbeingbetween15%and20%duringworkinghours.19Someelt
thatbettercapacitymanagementwouldprovideaccesstocurrentuntappedorunder-utilised
resources.Inaddition,atechniqueknownasservervirtualisationcouldmakebetteruseo
existingprocessingcapacitywithinandacrossagencies.
2.1.2.2. Storage
Industrycommentedthatwithdataandinormationcontinuingtoexpandexponentiallyduetotheincreasingprevalenceodigitalcontentandthepervasivenessolegislativecompliance
requirementspertainingtodata,eachagencyacesincreasingstoragerequirements.
Consolidatingstorageintolargerepositorieswoulddrivecheaperpermegabytestoragecosts.20
Inaddition,consolidationwouldenablethedeliveryodierentiatedhigh,mediumandlow
availabilitystorageservicesbasedonneed.
2.1.3. Consolidation/integration o service delivery channels
TwelvesubmissionscommentedontheopportunityortheGovernmenttoenhanceservice
deliverythroughintegrationandcollaborationacrossagencies,particularlythroughsingleentry
pointsorgovernmentinormationandservices.Reducingthenumberocustomer-acing
governmentportalswouldprovidegovernmentcustomers,citizensandbusinesseswitha
singledoortoaccessthemajorityogovernmentservicesandreducethecostomaintaining
multipleentrypoints.Aewsubmissionsalsomentionedthebettersharingootherservice
deliverychannels,suchasace-to-aceandtelephone.
19 Adrian Johnson (June 2007), Capacity utilisation - Asking the questions, MeasureIT Issue 5.06,
http://www.cmg.org/measureit/issues/mit42/m_42_5.html20 Technically, it is possible to consolidate storage without actually consolidating data.
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Chapter Two:ViewsromoutsidetheAustralianGovernment
2.1.4. Business systems and applications
Somesubmissions(10)eltthatopportunitiescouldbegainedromstandardisingand
rationalisingthemyriadobusinesssystemsandapplicationsagenciescurrentlyuse,particularlywithaviewtobettersharingandre-useamongagencies.Relatedtothis,our
submissionscommentedonopportunitiesromrationalisingsotwarelicences.
Thestategovernmentssubmissionidentiedthatithasalreadyseentheeectso
rationalisationinitsdevelopmentenvironments.Inits200506baseline,50%oitsagencies
requiredatleastourdierentapplicationdevelopmentskillsets,whichraisestrainingcosts
andskillsmanagementoverheads,aswellasknowledgemanagementrisk.Thisgurewas
reducedto29%in200607,accordingtoitsbaselinereporting.
2.1.5. Inrastructure
Somesubmissions(8)alsoeltthatthereareopportunitiestorationalise,consolidateandshare
ICTinrastructure(suchascallcentres),particularlyorsmalleragencies,notingthatsome
poolingandconsolidationorequirementswouldberequired.
OnecompanysurmisedthattheGovernmentcouldsaveupto$100millionbyoptimisingits
inrastructurealone.
2.2. SHARED SERVICES
Manysubmissions(29)consideredthatrationalising,standardisingandaggregatingbusiness
systemsandapplicationsalsoenablesamovetosharedservicesacrossagencies.Bywayo
comparison,11submissionsindicatedthatothergovernments(bothstateandinternational)
haveprogressedurtherinthisarea.TheymentionedtheactivitiesotheVictorianand
QueenslandGovernments,andtheUSandUKGovernments,andsuggestedthatthe
Governmentexploreandlearnromtheirexperiences.
Thetopcandidatessuggestedbyindustryorsharedservicesincluded:
nancialandhumanresourcesmanagementandpayroll(20mentions)
procurement,purchasingandcontracting(10mentions)
document/recordsmanagement(eightmentions)
paymentprocessing(sixmentions)
securityandauthentication(vementions)
identityandaccessmanagement(vementions)
grantsmanagement(vementions).
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Whileindustrywasgenerallyoptimisticaboutthepotentialosharedservices,theyalso
notedthatsharedservicesandsystemsinevitablyinvolveadegreeocompromisethatcan
exposethedierentbusinessexpectationsocustomers.Thissentimentwasechoedinthe
meetingsIheldwithstategovernmentCIOs.Whiletheyacknowledgedthepotentialbenets
osharedservices,theycommentedonthesignicantchallengesandrisksassociatedwith