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Executive Summary

Introduction /Context

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).

Methodology

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.

Key Findings

After detailed analysis of the evidence, the review identified the following key findings:

  1. There is weak governance1 of pan-government issues related to ICT.
  2. 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.
  3. The business as usual (BAU) ICT funding in agencies is not subject to sufficient challenge and scrutiny.
  4. There is a disconnect between the stated importance of ICT and actions in relation to ICT skills.
  5. 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.
  6. The government ICT marketplace is neither efficient nor effective.
  7. There is a significant disconnect between the Government’s overall sustainability agenda and its ability to understand and manage energy costs and the carbon footprint of its ICT estate.

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.

Summary of key recommendations

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.

Governance

Capability

ICT spend

Skills

Data centres

Sustainable ICT

Implementation

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.

Image: Key Recommendations - Click on image to enlarge

Key Recommendations. Text description below.

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.

Text description of Key Recommendations image.

Acknowledgements

I am extremely grateful to those who have helped to make this review possible. In particular, I would like to thank:

Next section: Introduction

Footnotes:

  1. ‘Governance is defined as the system by which the current and future use of IT is directed and controlled. It involves evaluating and directing the use of IT to support the organisation and monitoring this use to achieve plans. It includes the strategy and policies for using IT within an organisation’ (Source: AS 8015-2005 Corporate Governance of ICT). The generally accepted principles of public sector governance according to the Australian National Audit Office (ANAO) include accountability, transparency, integrity, stewardship, efficiency and leadership (Source: ANAO (July 2003), ‘Better practice guide: Public sector governance and the individual officer’).
  2. In this report the term ‘whole-of-government’ is used to mean all government agencies or a significant subset of them where there is a common issue which is important but not universal to all agencies.

Contact for information on this page: ICTReview@finance.gov.au

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Last Modified: 11 February, 2009