The Federal Government’s spending on information technology _ now at $2 billion a year _ needs major changes to improve efficiency and to help Australian industry and exports, according to a report published yesterday.
The report of the Information Technology Review Group found there was no overall summary of IT used by the Government _ so it prepared one. The Government is the largest IT buyer in Australia and 65 per cent of the processing power is in Canberra. The Government owns about 100,000 PCs _ about two for every three public servants. The report found inconsistencies between departments; a lack of business sense and flexibility in purchasing; and a failure to take advantage of economies of scale. It recommended a whole-of-government approach headed by a Chief Information Officer in the Department of Finance advised by a high-level consultative body. It had 32 recommendations, most dealing with co-ordination and developing common approaches by agencies. The recommendations included: Widespread use of single points of access (electronic shops) by clients to various agency services, with appropriate privacy protection. Use of compatible systems on the desktop. It noted, for example, there were 26 e-mail systems in the government. A whole-of-government plan to make best use of new technologies and to make use of pooled demand for databases (with privacy protections). A whole-of-government agreement with unions to cover transfer of staff to the private sector where there are out-sourcing agreements. A review of contract staff _ restricting them to meet specific skill shortages. More cross-agency activity. Shorter processes for tendering by the private-sector for government IT purchases.
More innovation and less specification of requirements based on existing practices. Thorough business analysis before all major purchases. Out-sourcing driven by business requirements and to take into account government industry-development guidelines that promote Australian industry. The Minister for Finance, Kim Beazley, said he would be taking a submission to Cabinet based upon the report. He said the report’s approach could improve opportunities for the IT industry in Australia and help public-sector managers do their job. The Minister for Industry, Senator Peter Cook, said the recommendations would especially help small to medium sized enterprises which were often the most innovative companies able to adapt quickly to technological change. The Australian Information Industry Association welcomed the report saying its recommendations on out-sourcing would save taxpayers money and help Australian industry. Comment:
The review had to reconcile some basic conflicts in government IT purchasing and use: Getting advantages of economies of scale by cross-agency purchases without stifling the efficiencies that come from small-scale autonomous action by small units. Promoting Australian industry (often small scale) while seeking the advantages of compatibility that come with uniformity _ which at the desktop can mean everyone having the same software, usually imported from the US. Promoting a business ethic while being concerned with the public-sector’s accountability, legislative and service requirements.
Some of those conflicts can be resolved with the recommendations about more inter-agency co-operation; better risk-sharing rules with the private sector and more flexible contracting. Others will be solved technologically with more open systems that are compatible even if coming from different suppliers. Other inefficiencies, waste and failure to innovate have much more to do with the quality of management and staff than any structure. Greater out-sourcing and a whole-of-government approach (which is the thrust of this report) will not of themselves solve that, and it is likely that the next IT review (in say four or five years) will call for greater in-service development and more flexible agency autonomy. These things go in cycles.
The two critical things to address are risk sharing and cost of tendering. The Government will not get the advantages of private-sector efficiencies or seeding of small Australian companies while it requires that potentially financially open-ended risks be wholly borne by suppliers and while it draws up its contract requirements in such huge detail _ once again, a question of changing risk-averse public-sector management ethos. Those two issues are being worked on and the report rightly recommended that their resolution be speeded up.