On the lighter side
Those recommendations won’t weight too heavily for the agency. After all, Sheridan is quick to point to the success shared services — or ‘co-ordinated procurement’ — has already brought to the Federal Government in its eternal effort to cut costs.
Perhaps most obvious is AusTender, the Web-based procurement portal that serves as a frontend for publishing, communicating and subsequently awarding nearly all tenders at the federal level for services and equipment. According to the Department of Finance and Deregulation — AGIMO’s supervisory department and AusTender manager — the shared service provides a single help desk facility for the 109 agencies which currently use the portal. Some 84 of those use the portal to communicate with 86,000 registered suppliers and, across the 2009/2010 financial year, all agencies involved reported 80,969 contracts at a total value of $42.7 billion.
Some of the biggest departments continue to hedge their bets; the Department of Health and Ageing, for instance, continues to use its own procurement portal for contracting project-specific services including those used in the $467 million personally controlled e-health record. Government business enterprises, such as the National Broadband Network wholesaler and the government’s e-health lead agency, also tender for equipment and services by their own means. Despite a central help desk, contact details for each tender ultimately go directly back to a specified department lead.
Yet, apart from a few hiccups across several years of operation, AusTender has largely operated without a hitch and provides interesting insight into the complex world of government procurement. According to Sheridan, its success lies in its simplicity.
“It’s the same process across all agencies,” he says. “Same business process, common set of rules, single system, not customised.”
Lack of customisation is yet another semantic area Sheridan is careful to tread around. While individual departments can configure their software, customisation is discouraged. It’s a point well established in government policy too: While customisation of software is allowed to some degree, it is a fallback more than anything else and only approved by the agency executive after attempts to reengineer business processes. In all other areas, configuration is the limit of control by individual departments.
As a means of further standardising arrangements, AGIMO applied the same philosophy to a volume sourcing arrangement with Microsoft and reseller Data#3, which Sheridan says has helped the Federal Government move from 42 contracts governing 41 agencies to a single contract governing 80 agencies.
The new agreement has saved $51 million to date, and is now expected to save up to $80 million over four years. “That means that all those agencies — and remember there are over 50 FMA [Financial Management and Accountability Act] agencies that spend less than $2 million a year on ICT — those agencies are able to buy Microsoft software, their core desktop licences are provided centrally; essentially they just tell us the numbers they want and they’re able to get them.
“They’re able to buy software under contract arrangements at a guaranteed price and they can put their efforts into the things that make their agencies different, their competitive advantage, rather than into the things that are done commonly.”
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In any ICT project, shared or otherwise, failures are sometimes inevitable. It’s a fact of life that IT managers must ultimately become aware of in order to deal with them when they land. Though Western Australia and Queensland perhaps serve as examples of how shared services perhaps shouldn’t be done, the concept is far from dead. In fact, when implemented correctly, such arrangements have their merits, both in cutting costs and removing duplication.
However, keeping an eye on the potential pitfalls are vital to mitigating against failure. “There are always lessons to learn from things that haven’t gone to plan,” Mayo advises. “Part of the challenge here is to listen to those lessons but also implement them... At the end of the day it’s about how you take that information and change it.”