CeBIT09: Feds ahead of schedule on Gershon goals

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CeBIT09: Feds ahead of schedule on Gershon goals

Federal agencies are by and large ahead of schedule in terms of realising the cost cuts stipulated by the Government in the wake of the Gershon report, with $109 million of savings identified thus far.

Speaking at the CeBIT conference in Sydney today, Federal Government CIO Ann Steward said the Government is working on a "very aggressive timetable" for identifying and realising cost savings.

Of the 39 enabling projects recommended as part of the Gershon recommendations, ten were scheduled to be delivered by June 2009.

Those ten are already delivered, she said. Five additional projects will be delivered ahead of schedule by the same date, and 11 more projects are "already well advanced."

Steward confirmed that phase one of the Business As Usual (BAU) component of the Gershon initiatives has concluded.

The BAU component compels Government agencies with over $20 million IT spend to reduce this spend by 15 per cent and agencies with between $2 million and $20 million IT spend to reduce this spend by 7.5 per cent.

The Government has identified over $109 million of savings initiatives from over 50 agencies during phase one of the BAU review. 

John Sheridan, division manager of business improvement at the Australian Government Information Management Office (AGIMO) said the Gershon report originally anticipated the 2008/09 fiscal year to yield $140 million from BAU savings.

"The number we have since identified is lower," he conceded. "But that reflects some issues in data quality - discrepancies between the reporting to Sir Peter [Gershon] and the more detailed reporting done to us in the last six months."

Sheridan told the CeBIT audience that AGIMO had been relatively flexible with agencies around meeting the Gershon goals so far.

He said agencies have been consulted as to "whether or not savings were practical" and that AGIMO has then advised Government as "to what practically could be achieved."

"The Government was quite clear with BAU reduction work that we would have to ensure service impairment didn't occur to citizens and business," Sheridan said. "During phase one we've been able to progress that effectively without service impairment. We know if the future that might get harder. But there are checks and balances built into BAU work for agencies to address any issues."

Sheridan said AGIMO's benchmarking work, conducted with the assistance of Boston Consulting Group, has "deliberately not been simplistic". Exceptions have been made to cater for the wildly different operating environments within agencies. 

"We haven't grouped everyone together and moved everyone along with the average," he said.

An agency that only recently outsourced services or refreshed its hardware, for example, is unlikely to as quickly see savings as those with contracts up for renewal, he said.

Even with this flexibility, Sheridan said, "we're progressing to schedule and getting the results largely that we expected."

AGIMO has already identified $139.2 million of the $298.2 million of cost savings anticipated by the Gershon Review for the 2010/11 fiscal year. The Government expects to eventually save some $400 million a year from implementing Dr Gershon's BAU recommendations.

Sheridan said the whole process has given AGIMO a good insight into where it can use whole of Government arrangements to save costs.

The Government will already save $16 million a year from the the Microsoft whole-of-Government volume sourcing agreement signed in February, he said.

"It doesn't force anyone to use Microsoft or even encourage them to move to Microsoft, it just makes sure the Government gets the best deal possible from a software vendor," he said.

Next off the rank is a telecommunications scoping study and coordinated procurement efforts around both desktop computers and printers/multi-function devices.

Phase II

AGIMO will brief agencies by May 18 on the second phase of the BAU review, after taking feedback in recent weeks over the results of phase one.

The agency will collect data from agencies on these savings between May and September 2009, presenting its findings to Government in last quarter of this year.

Both Sheridan and Steward moved to reassure the audience that half of the savings realised from the Gershon review will be reinvested back into agencies.

Sheridan said he anticipates agencies will be able to draw from the reinvestment fund, made up of half the Gershon savings, "over the coming financial year towards the second half."

In future years, he said, the reinvestment fund process will be timed to coincide with the annual Federal Budget.

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