- Introduction /Context
- Key Findings
- Summary of key recommendations
On 11 April 2008, the Minister for Finance and Deregulation, the Hon. Lindsay Tanner MP, announced my appointment to lead a review of the Australian Government’s use of information and communication technology (ICT).
In response to the Terms of Reference, I employed an evidence-based approach to the review. There was a need to gain a comprehensive understanding of the status quo in order to determine the scope for, and identify areas of, improvement of efficiency and effectiveness.
There have been three main phases to the review:
Evidence gathering: I invited submissions from agencies, industry and other key stakeholders on the use of ICT within government. In total, 112 submissions were received. I also issued a comprehensive survey to 100 Financial Management and Accountability Act 1997 (FMA Act) agencies requesting data on ICT expenditure, with detailed questions on costs per desktop, websites, the topology and cost of telecommunications networks, use of human resource and financial management information systems, grant management systems and energy consumption. In addition, two small surveys were conducted.
Consultation: Three video conferences were held with Portfolio Secretaries in the early stages of the review, followed by a series of meetings in July and August with the Prime Minister, Ministers, agencies, industry and other stakeholders. In total, 63 meetings were held. In addition, three visits were made, one to the Australian High Commission in London and two to data centres in Canberra, to understand in more detail certain points raised by some submissions and meetings.
Analysis and reporting: The evidence, supplemented by additional inputs such as the Australian Bureau of Statistics 2002–03 Government Technology Survey, was analysed to identify key findings. Recommendations were then developed to address the identified findings and, finally, this report was produced within the requested time frame.
After detailed analysis of the evidence, the review identified the following key findings:
- There is weak governance1 of pan-government issues related to ICT.
- Agency governance mechanisms are weak in respect of their focus on ICT efficiency and an understanding of organisational capability to commission, manage and realise benefits from ICT-enabled projects.
- The business as usual (BAU) ICT funding in agencies is not subject to sufficient challenge and scrutiny.
- There is a disconnect between the stated importance of ICT and actions in relation to ICT skills.
- There is no whole-of-government2 strategic plan for data centres. In the absence of such a plan, the Government will be forced into a series of ad hoc investments which will, in total, cost in the order of $1 billion more than a coordinated approach over a 15-year period.
- The government ICT marketplace is neither efficient nor effective.
- There is a significant disconnect between the Government’s overall sustainability agenda and its ability to understand and manage energy costs and the carbon footprint of its ICT estate.
At the heart of these findings is a conclusion that the current model of very high levels of agency autonomy, including the ability to self-approve opt-ins to whole-of-government approaches in the ICT domain, leads to sub-optimal outcomes in the context of prevailing external trends, financial returns, and the aims and objectives of the current Government. The impact of this autonomy has been heightened by a previous lack of strong focus on whole-of-government ICT issues at both Ministerial and top official levels. This conclusion applies no matter how well-intentioned individual agencies are in their pursuit of whole-of-government outcomes.
The current model of operation is very close to treating FMA Act agencies as though they were independent private sector entities. The agencies are, however, very different in a number of aspects: they are funded by the taxpayer, they cannot go bankrupt, they have very little or nothing of the ‘time=money’ dynamic of the private sector, and they have no simple bottom line outcomes against which their success or failure can be measured.
Against the background of the Government’s objectives and the pressures to improve efficiency and effectiveness wherever possible, I consider some rebalancing between agency autonomy and coordination across government is both desirable and necessary in measures related to ICT. Such a move is in line with trends in the United Kingdom (UK) and United States (US) Governments, as well as large private sector organisations.
The following comprise the primary recommendations of this review. The complete list of my detailed recommendations is found at Chapter 5 of this report. A summary of how the recommendations meet the Terms of Reference can be found at Appendix K.
- Establish a Ministerial Committee on ICT to be responsible for the key whole-of-government ICT policies and the overall strategic vision for how ICT should support the achievement of the Government’s outcomes and wider policy agenda.
- Create a Secretaries' ICT Governance Board (SIGB) with a strong mandate from the Government to drive the agreed recommendations arising from the review and focus on addressing the key business issues to improve the efficiency and effectiveness of the Government’s use of ICT.
- Allow agencies to obtain opt-outs, based on genuine business need, from agreed whole-of-government activities. Opt-outs to be approved by the Ministerial Committee, informed by the SIGB.
- Improve agency capability to commission, manage and realise the benefits from ICT-enabled projects through the implementation of a common methodology for assessing agency capability based on self-assessment and periodic independent audit. Each agency Chief Executive to propose a target level of capability based on their agency’s and the Government’s strategic priorities, and for this to be independently validated. Agencies to develop a capability improvement plan with commitment, and agreed actions, to address identified gaps.
- Target to move total FMA Act agency ICT spend from an average 77:23% split between ICT BAU activities and creation of new capability in 2007–08 to an average 70:30% in 2011–12.
- As initial steps towards this goal, reduce the ICT BAU budgets of the largest 28 FMA Act agencies (Defence excluded) with ICT spends in excess of $20 million per annum by 15% from 2007–08 actuals (for a list of agencies refer to Appendix F), with a phased introduction over two years.
- Create ICT Review Teams to help these agencies achieve or exceed the target reductions without impairing service delivery to citizens and business.
- In addition, I recommend targeting agencies with total annual ICT spends between $2 million and $20 million to achieve a 7.5% reduction on average of their BAU from 2007–08 actuals (for a list of agencies refer to Appendix G) , with a phased introduction over two years.
- The 15% and 7.5% reductions in total should save the Government around $140 million in the first year and in excess of $400 million in the second and subsequent years. I also recommend that 50% of the savings generated by these recommendations be transferred to a central fund for reinvestment in projects to improve efficiency and effectiveness of ICT BAU activities, such as replacement of legacy software and hardware with high support and maintenance costs.
- Create a whole-of-government Australian Public Service (APS) ICT career structure, including training and development programs for ICT professionals in key skills areas.
- Develop and maintain a whole-of-government strategic ICT workforce plan.
- Reduce the total number of ICT contractors in use across FMA Act agencies by 50% over a 2-year period and increase the number of APS ICT staff. This should save the Government an estimated $100 million (across both BAU and project-related work).
- Develop a whole-of-government approach for future data centre requirements over the next 10–15 years.
- Develop a whole-of-government ICT sustainability plan (in conjunction with the Department of the Environment, Water, Heritage and the Arts) to manage the energy costs and carbon footprint of the Government’s ICT activities.
My recommendations entail a major program of administrative reform and cultural change. Based on my experience of creating sustainable change in the UK public sector there are two critical requirements which will determine the success of the proposed program: first, sustained leadership and drive at Ministerial and top official levels; second, ensuring the enablers of change are properly resourced not only in funding terms but also skills of the right calibre.
The early decisions of the Ministerial Committee and the SIGB will need to send out clear signals about the pace and direction of change which is then reinforced through subsequent decisions. It will be essential to ensure that agreed whole-of-government ICT approaches and arrangements are ‘fit for purpose’.
The following page sets out a proposed implementation plan for the key recommendations based on the assumption that the Government approves all my recommendations in November 2008.
Implementation activities fall into two broad categories: those enabling activities which are one off and need to be undertaken at the beginning of or early in the implementation phase (e.g. the development of efficiency metrics), and those activities that are ongoing (e.g. the implementation and ongoing use of efficiency metrics). In most cases an ongoing activity is preceded by an enabling activity.
I am extremely grateful to those who have helped to make this review possible. In particular, I would like to thank:
- the Prime Minister and the Minister for Finance and Deregulation for their input and support
- Ministers who generously gave me their time and views and provided me with a greater understanding of their aims and objectives and the wider Australian context
- the Australian Government Information Management Office for the provision of talented staff to the review secretariat
- Centrelink, the Australian Taxation Office and the Department of Education, Employment and Workplace Relations for the provision of high-quality agency secondees to the review secretariat
- the Departmental Secretaries, Agency Chief Executive Officers, the Auditor-General, the Australian Public Service Commissioner, Chief Information Officers and Chief Financial Officers of the agencies that provided submissions, survey responses and their time to meet with me
- individuals and organisations outside the Government who contributed submissions to the review, and who met with me to discuss their submissions
- those individuals and organisations undertaking discrete tasks in support of the review
- the Acting Australian High Commissioner to the UK, and Austrade in London for their help and support
- my wife, who put up with many very early morning and late night phone calls I held with the review team in Australia, and my extended absence during August.
- ‘Governance is defined as the system by which the current and future use of IT is directed and controlled. It involves evaluating and directing the use of IT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using IT within an organisation’ (Source: AS 8015-2005 Corporate Governance of ICT). The generally accepted principles of public sector governance according to the Australian National Audit Office (ANAO) include accountability, transparency, integrity, stewardship, efficiency and leadership (Source: ANAO (July 2003), ‘Better practice guide: Public sector governance and the individual officer’).
- In this report the term ‘whole-of-government’ is used to mean all government agencies or a significant subset of them where there is a common issue which is important but not universal to all agencies.
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