Chief executive of Victoria’s Cenitex to depart

After more than seven years in the role, Cenitex chief executive Michael Vanderheide has decided to leave the Victorian government IT shared services agency.

In a message to colleagues, Vanderheide said that although the organisation’s board had sought to have him continue in the CEO role following his contact expiring at the end of the current financial year, he had decided that it was in both his interests and Cenitex’s for “someone new to take the reins”.

During his tenure, the CEO saw a significant turnaround for the state owned enterprise. He joined in 2011, at a time when the organisation’s budget was firmly in the red.

Cenitex was originally established in 2008. In 2013, Victoria’s former Coalition government contemplated transforming into a broker-style organisation, then considered completely outsourcing the infrastructure and services provided by Cenitex as part of ‘Project Atlas’.

In 2015, the newly elected state Labor government decided to retain Cenitex, following a review that concluded it should “continue to deliver the services that require specialist understanding of the Victorian Government, or are not readily available in the market, such as secure data processing and storage, data base administration and specialist information security services.”

Cenitex was also in 2012 the subject of a less-than-flattering ombudsman report that concluded there had been “serious improper conduct” by some officers. That report noted, however, that the new CEO — Vanderheide — was “taking steps to improve Cenitex”.

“He has provided my investigation with documentation regarding new policies, procedures and initiatives which I consider will go some way to addressing the issues that I have raised,” acting ombudsman John R. Taylor wrote.

“The year before I started we had a loss of $25 million. My first year we ended with a loss of $37 million, which was a low point,” Vanderheide told Computerworld in a May 2016 interview. “Last year we turned a surplus of just over $8 million and we’re on track for having a surplus again this year; we’re budgeting for a surplus next year and I see no reason why we won’t operate in surplus for the foreseeable future.”

“We’ve gone from annual losses in the tens of millions of dollars to strong and sustainable annual profits,” Vanderheide said today in his message announcing his intention to step down.

“We’ve reduced prices annually for the past 4 years while growing revenue and adding new services. We’ve brought staff attrition to an industry-beating level of 6% from an annual peak of 19%.

“We’ve transformed our technology and our services, enabling the Victorian Government to securely begin the adoption of services in the cloud. We’re leading the migration of 35,000 of our customers from Lotus Notes to Office 365, with all the opportunities for enhanced productivity and collaboration which that move entails.”

The CEO said Cenitex had recognised a need to expand beyond its technology and processes towards “truly engaging” with its customer base.

“And in an environment where there is no government mandate to use our services, we’ve grown that customer base,” the CEO wrote.

With the support of its board and in partnership with government CIOs, the organisation had become a “successful and sustainable shared service.”

Vanderheide said that Cenitex’s transformation is continuing, with ‘Project Fortify’ set to see a shift to software-defined services and a cloud-based desktop environment.

Vanderheide will continue to lead the organisation while a new CEO is sought.