Reforming government IT on the cheap

It must be an uncomfortable time for Australia’s government CIOs, with staff and citizens demanding new digital services while federal, state and territory finance departments tighten the purse strings.

Shaving IT operations – which account for between five and ten percent of public sector expenditure – seems to be a favourite budget savings measure through the all-too-familiar “efficiency dividend”.

Last month, the Federal Government reported having identified more than $2 billion in ICT savings to be banked between 2008-09 and 2015-16. Of those savings, 90 percent was to be achieved from “business as usual” cost cuts, as a result of the 2008 Gershon review.

Treasury boffins seem to have little interest in the implications of those cuts. But for many agency CIOs, a focus on keeping the lights on for a lower price has turned them into little more than managers of IT services, leaving their former broader strategic responsibilities in the dust.

Simply maintaining business-as-usual could be a danger in itself; take, for example, Queensland’s IT audit that since May, has identified 50 vulnerable IT systems that could cost the state up to $5 billion in the next three to five years to fix.

As a result of the audit, Queensland Government CIO Peter Grant is clear that a wholesale governmental restructure – not just IT priorities and ways it does business – is on the cards. Indeed, the government’s decision to scrap a six-year-old Exchange 2007 roll-out to seek a cloud-based email system is but one indication of how things could change.

So how will the ratchet of these pressures and perpetual cost-cutting measures lead to innovation? To survive, CIOs and governments may need to rethink their approach to whole-of-government IT infrastructure and services.

Instead of aligning IT with technologically backward government programs, CIOs could advise their employers on how to use information, deliver services, and improve government functions – perhaps even taking the reins to restructure and modernise the public sector.

Incremental efficiencies

It's clear that mandatory, whole-of-government procurement panels – expected to contribute $200 million of the Federal Government's $2 billion savings target – aren't necessarily an easy route to efficiency savings.

Take, for example, how AGIMO froze a mandatory mobile handset and accessories panel last month after determining that it “did not offer satisfactory value for money” for agencies, or the managed print services and telecommunications panels that are evoking little interest from agencies.

In a 12-page report last month, Federal Finance Minister Penny Wong flagged new opportunities to extract greater efficiency through cloud computing, the standardisation of core IT systems, and “greater re-use of existing capability, rather than continually ‘re-inventing the wheel’”.

The US Government's "Cloud First Policy", introduced in February last year, highlighted benefits like scalability, lower cost, and the ability for agencies to experiment with technology without necessarily reducing their services.

But the Australian Government appears to have approached cloud computing in a tentative, piecemeal way, introducing separate initiatives for public, private and low-value cloud services.

Draft strategy documents indicate that the government will devolve the introduction of public and private cloud computing to each agency rather than considering whole-of-government scenarios embraced by its counterparts in the US and Britain.

One can imagine scenarios where many back-office functions such as finance, HR, email and storage could be hosted centrally, on a private, or "community cloud", as AGIMO calls it. But the "community” cloud roll-out is a matter left to agencies, albeit with considerable oversight, security and governance guidelines.

The revolutionary CIO

Australian governments to date have relied on "reforms" to address inefficiencies and any other issues in an incremental, non-disruptive manner.

Most governments use technology to reinforce legacy organisational structures. More disruptive IT opportunities – such as telecommuting, consolidating layers of middle-management, and adopting whole-of-government approaches beyond back-office functions – may still seem too distant or threatening.

But as consultancy Deloitte has noted, technology like the cloud, "social computing" and mobility have now introduced “fundamentally disruptive capabilities”, shaking up business models and transforming how business is done.

So perhaps it's time for what Deloitte has described as "revolutionary" CIOs, who are "more than business stewards and potentially more than strategists as well".

Instead of pushing incremental changes, a revolutionary CIO could move the vanguard of reform by challenging old rules, breaking up established institutions and overthrowing business as usual.

Disruptive new technologies could also be a means of attracting a new wave of qualified IT workers, which Deloitte expects to be equipped with “radically different” abilities and expectations.

“[Workers in the new generation] demand and deserve the tools to work effectively, usually in collaboration and not normally at a desk or in an office," Deloitte noted.

"These factors have broad implications for what an organization sells, how it engages with stakeholders, how it allows them to interact with each other and how work is performed.”

This article will appear in iTnews' conference guide for the CIO Strategy Summit this month. The conference takes place on the Gold Coast from August 28 - 30.