Govt CIOs criticise "broken" IT funding models

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Govt CIOs criticise "broken" IT funding models

Budget process unsuitable for cloud projects.

Senior technology leaders from the federal and ACT governments have criticised outdated and "fundamentally broken" funding models at the heart of government technology projects.

Newly appointed Department of Education and Training chief information officer Mark Sawade lamented that federal budget approval processes aren't designed with cloud in mind.

“Our whole federal government frameworks for how we ask for money are completely based around a split of capital and operating [expenditure], and it’s fundamentally broken,” he told the GovInnovate conference in Canberra.

“The processes that we’ve come up with over the past 15, 20, 25 years to ask for money don’t fit the cloud paradigm at all, in so many different ways.”

Problems with budgeting processes stem from long-standing issues with the CapEx and OpEx investment model, which was designed for owning ICT assets rather than consuming them as services.

It is an issue that is seen as one of the major barriers to the uptake of cloud by government IT shops.

Limited reform to budget processes has seen governments increasingly unprepared for the shift to cloud and as-a-service. That, CIOs say, is stonewalling transformation efforts.

It's a view shared by the former Environment department CIO Al Blake, who recently took up the role of the ACT government’s chief technology officer after a stint in-between in the private sector.

Blake is responsible for one of Australia's most ambitious cloud projects - shifting the entire ACT government to the cloud, which he hopes will make the territory ‘tin free’ in five years and give directorates the ability to quickly ramp services up and down.

“We’re all used to going off massive capital budgets – that’s what we’ve done for decades – and our entire governance process is based around getting all the specifications, hundreds of pages and going out for [tens of millions of] dollars to build something,” he said.

“But when we’re not going to build something anymore, and we're going to get something on a month-by-month basis and pay according to the amount we consume... that doesn’t just affect IT, it massively affects budgeting and finance [for the project].

"We’re all collectively trying to work through [that] at the moment."

The Digital Transformation Agency will no doubt examine budget process as a barrier to cloud adoption.

DTA has been developing the government’s new secure cloud strategy since April. It is almost complete.

The strategy aims to encourage the adoption of cloud by “building confidence in compliance and streamlining assurance processes, creating shared capabilities, guiding agencies to transition to the cloud, and working with industry to make cloud offerings more comparable and easier to adopt”, according to a recent submission to the inquiry into the government's digital transformation efforts. 

Sawade said he hoped changes to the investment process would focus the conversation on the business outcome of adopting cloud from the start, rather than on "how do I get the money".

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