DTA moves to review broken government IT funding model

The Digital Transformation Agency will formally review the federal government’s outdated IT funding model in a bid to better support agile delivery approaches and common, reusable platforms.

Long-held issues with the federal budget approval process have been top of mind for the peak IT agency since a fundamental shake-up of the federal budget approval process was flagged late last year.

Government Services Minister Stuart Robert has called on the agency to explore different funding models with key departments like Finance and Defence to address decades of deep-set problems with the current paradigm.

He is keen to introduce a new investment model that would allow “agencies to try things, learn and scale up or share their learnings before significant amounts of money and reputation capital are sunk into projects that may not deliver what they set out to do”.

However, the funding model as it currently stands, is “inhibiting the take up of more agile ways of delivery”, as it has “failed to keep up with the growth of cloud and other service and subscription-based models”, he said.

This is largely because the investment model is orientated around capital and operational expenditure, which is designed for owning IT assets – especially software intangibles – rather than consuming them as services.

The DTA has now taken its exploration to the next level, appealing to the market for “whole-of-government digital and ICT policy and governance advice” to inform its thinking on a future investment strategy.

In a brief issued on the digital marketplace, the DTA called for “experienced sellers who have proven capability to support development of options and strategies for whole-of-Government ICT and digital governance and investment policy reform”.

“The project seeks to review and assess the current whole-of-Government digital and ICT investment policy landscape and governance arrangements, and to develop a roadmap of future work to address gaps and opportunities,” it said.

The DTA said the “forward work program”, which is slated to begin later this month and run for approximately six weeks, will provide it with “a roadmap for focused ongoing strategic policy and governance activity”.

“The project will identify policy opportunities to optimise funding arrangements for digital and ICT investments – to better support development and sustainment of shared capabilities, and more flexible approaches to resourcing for agile delivery,” the agency said.

“In addition, it will consider models and processes for good whole-of-government digital and ICT decision-making, to ensure robust governance of performance, risk, strategic alignment, architecture, investment planning, stakeholder engagement, etc.”

One of the policy opportunities that is likely to be highlighted through the process, is a digital investment fund or central pot of money that can be used to support technology projects with an agile delivery mindset.

The NSW government has already gone down this path by creating a digital restart fund to support and accelerate government-wide digital projects, which other states and territories are now looking at. 

Senior government technology executives have been calling for changes to the IT investment process, which favours big-bang, waterfall-based technology projects, for a number of years now to address what are considered “fundamental” problems.

The DTA itself has been lobbying Finance to better support agile delivery since at least April 2018, including through the creation of a digital-specific investment fund that looks somewhat similar to NSW’s.