Review of the Australian Governments Use of Information and Communication Technology

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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

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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 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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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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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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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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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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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


estimated time and actual time to

delivery


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


estimated cost and actual cost


question

12% (4) were delivered over time

No projects were delivered under

time


estimated time and actual time to

delivery


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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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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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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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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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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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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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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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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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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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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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

Review of the Australian Governments Use of Information and Communication Technology

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