Implementing the ICT Strategic Vision
A report for the Secretary of the Commonwealth Department of Finance and Deregulation on the draft ICT Strategic Vision
Dr Ian Reinecke
Strategies & Solutions Group Pty Ltd
May 2011
Contents
Terms of Reference
Executive summary
1.International alignment
1.1The Australian Vision in context
1.2The Australian Strategic Vision
1.3Key international themes
2.International models
2.1USA ICT Strategy
2.2Productivity improvement
2.3Implementation Strategy
2.4Executive direction
2.5UK ICT Strategy
2.6Review of major projects
2.7Canadian Government ICT
2.8New Zealand Government
2.9International priorities
2.10International alignment of the Vision
3.1ICT and productivity
3.2Efficiency measures
3.3Funding innovation
3.4Senior leadership
4. Other government programs
4.1National Broadband Network (NBN)
4.2E-health programs
4.3Human Services
4.4The DHS model
4.5Generalising the model
5.Cultural change
5.1Assessing change
5.2Technology and process
5.3Change ownership
5.4Executive responsibility
6.AGIMO role and mission
6.1Purpose of the Vision
6.2Information governance
6.3AGIMO and Gershon
6.4AGIMO’s current role
6.5The Implementation task
6.6Business requirements
7.0Governance Arrangements
7.1Governance model
7.2Role of Secretaries
7.3SIGB role
7.4Strategic policy
7.5Senior executive role
7.6Governance road map
8.Recommendations
Acknowledgements
Terms of Reference
A report for the Secretary of the Commonwealth Department of Finance and Deregulation on the draft ICT Strategic Vision, considering:
- The alignment of the vision with government ICT work and structures in similar jurisdictions with Australia and in relevant other countries, such as the USA, the UK, New Zealand and Canada
- The balance in the vision between improving government business outcomes, particularly public sector productivity, and managing the government’s effective and efficient use of technology as core issues for senior managers in government
- The interface between the program of activities outlined in the vision and other high level government programs, such as the NBN and e‐Health
- The degree of cultural change required across government to implement the program of work outlined in the draft vision.
- The role and mission of AGIMO in implementing the draft vision.
Executive summary
The Strategic Vision for the Australian Government’s use of ICT provides a comprehensive account of the major issues for government in seeking to improve public sector productivity through the effective management of technology. The Vision document and its accompanying implementation plan are pitched at a high level of generality however that provides insufficient guidance on how the vision is to be achieved.
The Australian strategy is captured in a more cohesive document than the policies of some of the international peer jurisdictions but lacks their specificity. There is a much stronger emphasis in international strategies on managing the costs of large ICT projects that are high risk, and on very directive governance powers and detailed cost reduction initiatives.
The potential for productivity improvement through intelligent use of ICT is recognised as a driving force by government internationally. Efficiency measures designed to assist in reducing budget deficits by cutting ICT expenditure are a feature of policies in other jurisdictions. While these measures do produce savings, productivity improvement is derived from a combination of technology and high quality management.
The Vision in its current draft version would benefit from a fuller account of the scope and influence of other major government projects, in particular that of the National Broadband Network (NBN). There also needs to be stronger recognition of the role of transformational projects involving several agencies in achieving the extent of cultural changes required for process and service redesign.
AGIMO has a strong record of achievement in implementing the recommendations of the Gershon report and should continue to be the primary consolidated source of technical advice on ICT to the Government. The broader scope of the Vision in using ICT to improve the conduct of the business of government, including providing different and better services, requires access to the full capability of expertise across government.
It is recommended that SIGB review current governance arrangements to ensure that it is able to draw on the expertise of the senior government officials responsible for policy and program delivery in its oversight of the implementation of the Vision. SIGB should in particular consider the formation of a dedicated strategic policy unit to provide it with advice. The formation of reference groups drawn from the APS 200 is recommended to assist SIGB in framing priority business issues that would benefit most from ICT investment.
1.International alignment
The alignment of the vision with government ICT work and structures in similar jurisdictions with Australia and in relevant other countries, such as the USA, the UK, New Zealand and Canada
1.1The Australian Vision in context
Detailed direct comparisons between national ICT policies and strategies are limited by the different social, commercial and government contexts in which each has been framed. A more fruitful approach is to examine where there are overlaps and omissions between the Australian Strategic Vision and the approaches of other peer jurisdictions.
One significant overall difference from our international peers is that the Australian approach seeks to present a comprehensive framework covering service delivery, open government and ICT operations in a single document. The result is a more cohesive document that seeks to link these three streams of activity into a framework that reveals their linkages. From this perspective it represents a complete, internally consistent set of objectives in achieving best practice in government ICT.
Discussions in the course of this review with Commonwealth Secretaries, agency heads and senior executives have generally confirmed their satisfaction with the Strategic Vision as a good high-level account of the issues facing government in obtaining more effective use of and value from ICT. It is however, the high-level nature of the Strategic Vision that invites concern about how it is to be translated into constructive action.
Among the concerns raised in interviews for this report is a perceived lack of specificity in the vision, which is cast in very general terms and, unlike the Gershon report, does not commit agencies to specific commitments. There has been similar concern expressed on the related matter of more detailed timelines that commit agencies to deadlines against which their performance can be assessed. The level of authority required to ensure that the broad objectives of the strategic vision are achieved is also seen to require sharper definition.
1.2The Australian Strategic Vision
The Draft Strategic Vision for the Australian government’s Use of ICT is built around three “Strategic Priorities” that together are directed at increasing public sector productivity.
The three Priorities are:
- Delivering Better Services
- Engaging Openly, and
- Improving Government Operations.
Two “Strategic Actions” support each of the three priorities:
- Enabling better services and building capability (Better Services)
- Creating knowledge and collaborating effectively (Engaging Openly), and
- Investing optimally and encouraging innovation (Improving Operations)
These six Strategic Actions are expanded in the document and are themselves supported by a total of 23 specific “Actions”:
Building capability
- Improving the use of existing technology capability
- Integrating technology and policy
- Improving program delivery capability
- Developing ICT workforce and skills
Enabling better services
- Delivering easy to use online services
- Greater use of personalised services
- Simplifying government websites
- Increase automation of services
Creating knowledge
- Building business intelligence
- Using location based information
- Developing analytical tools
- Releasing public sector information
Collaborating effectively
- Strengthening external networks
- Building collaboration across government
- Creating the necessary channels
Investing optimally
- Improving investment governance
- Developing a portfolio approach
- Extending coordinated procurement
- Sharing computing resources and services
Encouraging innovation
- Fostering innovation in ICT
- Delivering better ICT- enabled services
- Increasing awareness and early adoption
- Adopting new and emerging technologies
All of the Actions are supported by at least one and in a number of cases by two or more “Activities” at a more specific level, making up 32 in total.
The activities identified in the Implementation Road Map are framed at a very general level, as are performance measures, deliverables and milestones. Of a total of 32 activities:
- 13 are to be implemented from “2011 onwards”
- 13 are to be implemented by 2012 or “2012 onwards”
- 6 are to be implemented by 2013 or “2013 onwards”
1.3Key international themes
The central theme of the series of measures introduced by the US Government is that improving the efficiency of ICT would produce a consequent improvement in productivity and that achieving both paved the way for the future. That future was tightly focused on improving existing and introducing new services to the clients of government by taking advantage of emerging techniques and technologies that were attuned to changes in consumer behaviour.
The objective of deriving better value from ICT investment was prosecuted through rigorous scrutiny of major projects that were both large in scale and scope and long in delivery times. A powerful alliance of the President, through the use of mandatory executive orders, the Office of Management and Budget and the White House-appointed CIO ensured that efficiency measures were put into practice.
Poor productivity was linked to a ‘grand design’ approach to large ICT projects. The risk involved in those over-sized projects needed to be reduced by tackling them as a series of sub-projects that produced service improvements more quickly. From a technology viewpoint the simultaneous encouragement of cloud computing and a rigorous campaign to reduce the number of data centres reduced the incentive to undertake ‘grand design’ projects. The use and procurement of ICT was also simultaneously streamlined and integrated more closely into customer service planning by agencies.
The UK Government ICT strategy bears a strong resemblance to many of the initiatives implemented by the USA. Both strategies arise from a similar analysis of what is wrong with the current state of government ICT. They share a concern with the limited interoperability of systems, the low rate of reuse and adaption across agencies, poorly integrated infrastructure and too many data centres, inadequately used. They also focus on the responsibilities of the senior leadership group of the public sector to pay closer attention to how ICT is used in service delivery and in the efficient running of government.
Like the US, Britain sees the need for greater central control, is sceptical about the capacity of large ICT projects to deliver on time and budget, and sees the necessity for better procurement practice and use of open standards and open source technology. It is also concerned to ensure that there is greater Ministerial and senior Civil Service accountability for ICT.
Also like the US, the UK recognises that delivering services for less cost releases savings for investment in strategic ICT projects that are sized for fast delivery and which reduce the risks that come with complexity. Firmer central governance and leadership is needed to reform current inefficient practice, especially in applying a continuous scrutiny to ‘at risk’ projects, with the power ultimately to close down those that are under-performing.
The major preoccupation of the Canadian Government is with its ageing legacy systems which needed replacing by the most cost effective means possible. To do so, greater central governance was to be provided to agencies on ICT, including a sharper focus on the oversight of major projects. It was recognised that the replacement of older systems required the public sector to have better project management skills and to accept the necessity for independent reviews of progress.
Like other governments, Canada sees individual agency-centric approaches to ICT infrastructure and systems as a barrier to greater efficiency and is thus seeking to develop a portfolio rather than agency view of ICT investments. It has also initiated an aggressive program to reduce the number of data centres and to increase the utilisation rates of those that remain.
The New Zealand Government has implemented both new directions and adopted new priorities for ICT and located them within a governance framework designed to embed accountability at the highest levels of Ministerial and public service authority. While many of the initiatives outlined in the NZ Government policy are familiar in an international context, its strong approach to governance at the most senior level reflects most closely the approach taken in the UK and the USA.
The NZ policy recognises that a more ‘directive’ approach is necessary to achieve the ambitious change program to reform government ICT. To that end, chief executives are assigned specific accountability for implementing government ICT policy within their agencies, a role reinforced by an obligation on Ministers to ensure that this occurs. The resulting three-tier governance structure is tasked with ensuring that implementation occurs.
2.International models
The two most influential models in government ICT strategy and policy are the United States and the United Kingdom, which are both undertaking major reform programs built around imperatives for greater efficiency and productivity. To a lesser extent the US and UK initiatives are mirrored in the Canadian Government and to a similar extent by the Government of New Zealand.
A major reason impelling both the USA and the UK to undertake radical reform in government ICT is a desire for greater efficiency and better value for money from their ICT investments, in an environment of very severe fiscal pressure necessitated by the global financial crisis. They warrant more detailed examination as points of reference Australia.
2.1USA ICT Strategy
The direction of government ICT in the USA is led by the White House-appointed Chief Information Officer Vivek Kundra, who has focused closely on extracting greater efficiency from the massive public sector investment in ICT (of which 30 per cent is spent on data centre infrastructure).
By establishing a transparent approach to public spending on technology through the publicly available online Federal IT Dashboard, the US has cast a spotlight on the continuing performance of major projects. That scrutiny of delivery achievements measured against projected timelines has revealed that one-third of current projects ‘needed attention’ and that there were ‘significant’ concerns about five per cent of them.
Agencies are required to seek savings by examining how a better return on ICT investments can be achieved. In the case of the Department of Veterans’ Administration (DVA), cited as an example of good agency practice, this scrutiny has resulted in 45 projects being halted and of them 12 terminated entirely. The savings generated by DVA as a result of this process is put at $54M. The US Government as a whole has reviewed 50 high priority ICT projects and in half those cut the target delivery times, in the process saving $3B.
2.2Productivity improvement
The work of the US Government CIO is complemented by the US Chief Performance Officer, Jeffrey Zients, who is also the Office of Management and Budget (OMB) Deputy Director for Management. At a White House forum in April this year Zients contrasted the annual US private sector productivity improvement of 1.5 per cent year on year with that of the public sector, which was considerably less than half that rate.
As the US Government ceased collecting statistics on public sector productivity in 1995 there was no reliable current data but there was also little expectation that the differential between private and public sector had narrowed. The relationship between improved productivity and the level of ICT investment has been identified as a cornerstone of US Government ICT policy. The US has linked the overall cost-saving strategy to improving its use of technology as the key to increasing productivity.
2.3Implementation Strategy
The US Government CIO released in December 2010 a 25-point Implementation Strategy aimed at reforming federal information technology management.
The $600B that had been spent over the last 10 years by Government on ICT showed meagre productivity improvement compared to the private sector. In general, Federal Government ICT was perceived as being over budget, behind schedule and failing to deliver. A significant cause of these failures was attributed to what was described as a ‘grand design’ approach that delivers functionality every few years instead of every few months.
Some of the projects reviewed took as long as six years to deliver functionality, compared to the 18-24 months regarded as best practice for ICT projects. To remedy this situation, agencies were required by the plan to have release cycles of no more than 12 months for the delivery of new functions. In addition, there must be a demonstrable benefit to users within an 18-month period. The solution was nominated as breaking projects into manageable chunks and timing the delivery of new functionality every few quarters rather than years.
The objective of the 25-point Implementation Plan was to seek to remove the obstacles that held back agencies from leveraging their ICT investments to create more efficient and effective government. The plan made recommendations for ICT reform directed at both operational efficiency and large-scale ICT program management.
Its three central priorities were:
- Data centre rationalisation;
- Delivery of services using cloud technology; and
- Streamlining government.
Explosive growth had occurred in US Government data centres, rising from 432 in 1998 to almost 2,100 in 2010. A review of public sector data centres showed that the average utilisation rate across more than 2,000 locations was running at 40 per cent of capacity. As a result 137 government data centres, categorised as under-utlised, were closed. The Government announced that a further 98 public sector data centres would be shut during the course of 2011 and that the target reduction figure for federal data centres is 800 by 2015.
2.4Executive direction
A US Presidential executive order issued in April 2011 laid out the rationale for focusing on greater efficiency in the acquisition and use of critical infrastructure such as data centres. It argued that:
- Advances in technology and in the delivery of services in other sectors of the economy meant that community expectations about government services continued to rise
- It is imperative that the Government learn what is working well from the private sector and apply best practice to deliver public services better and faster
- In particular, the public sector needed to incorporate the use of increasingly prevalent, low-cost, self-service options accessed via the Internet or mobile phone; there also needed to be improved processes that reduce the need for customer inquiries and complaints.
The executive order laid out a series of concrete action required to improve the use of ICT in Government: