Gershon review the right medicine for public sector ICT

Plans announced last week by the federal government to review its annual $6 billion spend on ICT marks a significant turning point for Australia's public sector, according to Steve Hodgkinson, public sector research director for analyst firm, Ovum.

The former deputy CIO for the Victorian government described the whole-of-government review as highly symbolic, adding that Canberra's ICT vendors and CIOs will now be under no illusions that this government means business when it comes to managing ICT.

Hodgkinson was responding to an announcement last week by Finance Minister Lindsay Tanner of an ICT review aimed at identifying ways to maximise the benefits of technology to drive greater efficiencies and better services.

The review will also examine the way in which agencies manage ICT investments, including maintenance, intra-agency links, development and staffing.

Tanner said the Australian Government has approximately $10 billion in ICT assets and spends around $6 billion per annum on ICT encompassing procurement, maintenance, development and staff costs.

"Under the Howard Government this spending was completely uncoordinated leading to serious inefficiencies and cost blowouts," he said.

"There are clear opportunities for efficiency gains in information and communication technology. But we also want to use this review to ensure Australians can access convenient and high quality government services."

Tanner has appointed Sir Peter Gershon, the architect of a major spending review undertaken by the UK government in 2004.

Gershon's review identified cash and funding redeployment savings of 21.5 billion pounds and triggered a major rethink of ICT management and procurement in the UK.

"Strewth!! What a difference a change of government makes ... hold on to your hat," Hodgkinson said in the wake of Tanner's announcement.

"Tanner has been on the front-foot about the evils of Howard's decentralized approach to ICT since he came to office, and Gershon has just the right kind of medicine he requires."

Hodgkinson said federal government CIO, Ann Steward, and her team at the Australian Government Information Management Office (AGIMO), have been "clapping with one hand' to try and push an agenda that received only scant support from the Howard Government."

"How times have changed. Steward now has the wind in her sails and a government that understands the opportunity of better coordinated ICT as an enabler of both citizen-centric reform and higher productivity," he said.

Gershon's review is due in September and a new round of program funding allocations will be announced in the forthcoming May budget.

Hodgkinson said Gershon has a tough task ahead of him as data on ICT spending within agencies is "poor because the management system has not required secretaries and CIOs to rigorously monitor and report input costs like ICT".

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To avoid game playing and internal wars, Hodgkinson said the number one goal should be to look to the future rather than try and retrofit the past.

"Close the stable door and calm the horses - rather than run around chasing the ones that have already bolted," he said.

"The focus should be on making better ICT investment decisions from an enterprise perspective by putting in place practical, light touch, investment management processes within each agency and at Cabinet level, to drive decision making towards more coherent and shared infrastructure outcomes with one funding decision at a time," he said adding that these decisions should support both Connected Government and productivity goals.

"It is much easier, and quite frankly more fun, to have constructive win-win discussions at budget time around how to deploy discretionary funds for the best whole-of-government effect than it is to engage in win-lose arm wrestling with agencies about reengineering sunk investments and deciding who will steal who's data centre or who's application 'wins' to become the common platform.

"Its is about creating incentives for agencies to benefit from phased transition to better ways of operating, rather than marshalling the unwilling into a forced march."

Hodgkinson said the challenge for Gershon and Steward will be to weigh up the very real dangers of whole-of-government projects in the federal government - which by their size, complexity and convoluted governance are high risk - with the potential benefits of consolidation and rationalization of ICT infrastructure, common applications and vendor relationships.

He said there is a big difference between good numbers in the cell of a spreadsheet and the ability to actually bring these numbers to life.

"It is all to easy to let the consultants get carried away with their spreadsheets," Hodgkinson warned.

Gershon was awarded the Commander of the Order of the British Empire (CBE) in 2000 for services to industry and knighted in 2004 for his work on public procurement.

He has asked that the Australian Government make a donation to a charity in lieu of any remuneration.