[LINK] Knight of razor to slash government spending

[Richard Chirgwin]

The sort of thing that sets my antennae twitching...
>
> Sir Peter will begin consulting with major ICT suppliers and trade 
> associations as soon as possible "to try and get a better 
> understanding of what's happening at the moment, and hear people's 
> ideas about where there may be scope for improvement".
...which among other things is bound to produce plenty of presentations 
along the lines of "we have the ideal solution to break down the 
vertical silos that produce inefficiencies", in which over-simplified 
diagrams will "demonstrate" the huge number of systems that can be got 
rid of...

To pick up on this remark:

> It is quite possible that it is much more cost effective to have them 
> as individual systems. And it's a good idea to know if it is before 
> you take a hammer to them and beat them into fewer systems of dubious 
> quality.
Those with long memories may recall how the Sven worm downed BigPond's 
mail for ages. Part of the cure was to break down the formerly 
monolithic mail processing environment into a large number of individual 
systems.

In the (highly superficial and over-simplified) "critical infrastructure 
security" debate, where real "intrusion from Internet to electricity 
grid" attacks are demonstrated, the basis is always that some system or 
systems are performing too many functions, including functions that 
bridge the public and private systems.

These bridges are frequently (almost always?) created because someone 
has caught the "integrate all systems" mania. There are very good 
reasons for keeping (a) discrete systems and (b) discrete private 
networks where you need high security on the private side of the network.

Richard

>
> Talking about grants systems, I once worked on a project for one 
> department that tried to reduce the multitude of grants systems that 
> it alone has and saw the miserable failure at the requirements stage 
> followed by the project cancellation. I'd say that it is highly likely 
> that of those 164 grants systems most of them only have about 10% in 
> common. There might be a few that do very similar things, but not 
> many. Just because a system has a label "grant applications" does not 
> mean it does the same thing.
>
> </brd>
>
> Knight of razor to slash government spending
> Karen Dearne
> April 15, 2008
> The Australian IT
> http://www.australianit.news.com.au/story/0,24897,23539441-15306,00.html
>
> FINANCE Minister Lindsay Tanner's review of the federal government ICT 
> procurement is likely to result in an unprecedented shake-out of the 
> government technology spending game, with all options on the table.
>
> Last week, Mr Tanner signalled a shift to "co-ordinated purchasing" as 
> part of sweeping reform of the $16 billion federal government 
> high-technology market.
>
> British efficiency expert Peter Gershon has been hired to conduct an 
> exhaustive audit, agency by agency, and identify ways to slash costs 
> while delivering better services.
>
> "This is essentially the second stage of the razor gang," Mr Tanner 
> said. "Each project will be dealt with in its own way, but with the 
> broad objective of getting savings and better outcomes from agencies."
>
> The nation's top public servants will be forced to reveal their IT 
> secrets to Sir Peter, who was knighted for his landmark reform work on 
> behalf of the former Blair government.
>
> He was formerly chief executive of Britain's Office of Government 
> Commerce and has wide private sector experience.
>
> "There has been a proliferation of individual contract arrangements, 
> and it's really wasteful," Mr Tanner said. "We're asking why do we 
> have 800 different federal websites, and why do we need 164 different 
> systems for processing grant applications? We want to work out ways of 
> agencies sharing or connecting that will save money and deliver better 
> services."
>
> Mr Tanner said he was not seeking to "centralise" procurement, 
> "because I regard excessive centralisation as just as bad as excessive 
> decentralisation. I'm aiming to achieve the right balance, with a fair 
> degree of central co-ordination, a framework with expertise at the 
> centre, to maximise government buying power while allowing as much 
> agency autonomy and flexibility as possible," he said. "One of the 
> critical elements of Sir Peter's work is to provide advice as to the 
> best model for putting those two requirements together."
>
> The minister plans to "set things in motion" soon after the review is 
> completed in late August.
>
> Sir Peter will begin consulting with major ICT suppliers and trade 
> associations as soon as possible "to try and get a better 
> understanding of what's happening at the moment, and hear people's 
> ideas about where there may be scope for improvement".
>
> He will be sending out invitations to stakeholders seeking written 
> submissions within the next week or so. "My experience in both sectors 
> has taught me that it's not about private good, public bad," Sir Peter 
> said. "There are some very bad examples of the use of IT in the 
> private sector, and there are some astounding examples of very good 
> use of IT in the public sector. I don't rely on those simple 
> characterisations. We have to look at the interaction between 
> technology, management and organisation, and work out whether there is 
> a more optimal balance than exists today."
>
> On paper, major federal government suppliers such as EDS and CSC would 
> have the upper hand during the review, as both companies' British 
> subsidiaries experienced Sir Peter's work in Britain.
>
> Sir Peter said he could not comment on Mr Tanner's proposed 
> co-ordinated purchasing model, because "I'm not going prejudge the 
> outcome. I need to understand the current arrangements and see which 
> models work well in the local environment," he said. "I wouldn't be 
> seeking input from suppliers and trade associations if I didn't feel 
> that they would make some very valid contributions."
>
> In Britain, the "appropriate aggregation of demand" had generated 
> economies of scale that "resulted in being able to secure better 
> commercial arrangements" with some suppliers.
>
> "It's not centralised purchasing in the traditional sense, rather it's 
> what I would call more intelligent purchasing," Sir Peter said. "The 
> model in Britain is not that the centre knows best, but it is in a 
> position to see where savings are possible.
>
> "In some cases it might put deals in place that agencies can use to 
> their advantage, in others it may instead determine which is the right 
> lead agency to do those negotiations on behalf of public sector 
> organisations."
>
> Sir Peter will also consider policies and technologies that would 
> provide more agile systems. "It's clear that the more modern 
> environments and application architectures provide more flexibility, 
> and the ability to introduce changes faster and at lower cost than 
> some of the historic legacy systems," he said.
>
> Kevin Noonan, head of consulting at Canberra-based Intermedium, said 
> ICT vendors would welcome the chance to "present new ideas, rather 
> than being the recipient of requirements. Both Mr Tanner and Human 
> Services Minister Joe Ludwig have been clear about what they see as 
> project failures in Immigration, Customs and the Access Card," he 
> said. "Simply having fewer IT failures will improve efficiencies in 
> service delivery, because they are expensive in costs and lost 
> opportunities."
>
> In Britain, Sir Peter had focused on removing stovepipes, Mr Noonan said.
>
> "He's likely to look at shared services, better management of 
> information and leveraging scale in contracting. He negotiated a very 
> good deal with Microsoft for the British civil service," Mr Noonan 
> said. "I think he'll take a pragmatic view of getting the best deal, 
> which could well mean accepting a small, manageable number of 
> standards so the government has some flexibility in testing the market."
>
> The finance minister's approach indicated that "IT spin" was 
> definitely out of favour, Mr Noonan said.
>
> Frost and Sullivan senior industry analyst Simon Hayes said the 
> outcome of this government review "is pretty much already laid out", 
> as it often is.
>
> "Mr Tanner argues that the Howard government's ICT budget was 
> decentralised and haphazard, and he clearly wants a document advising 
> that federal government IT spending should be more centrally 
> co-ordinated," he said. "The irony of this approach is that Labor 
> spent years in opposition criticising the former government's $5 
> billion IT outsourcing program."
>
> Mr Hayes said there were also costs associated with centralisation, 
> such as reduced flexibility and responsiveness. Vendors would welcome 
> lower costs and less complexity in bidding for contracts, he said.
>
> "If the government reduces the number of deals but increases their 
> value, that would be a pretty competitive proposition for the large 
> vendors." Jeff Kennett, former Victorian premier and chairman of 
> contract management software vendor Open Windows, said the review was 
> "an important opportunity to have an outsider look at the present 
> arrangements".
>
> "I've always been concerned about the enormous waste of public money 
> in the administration of government," Mr Kennett said. "Too often, 
> governments enter into IT contracts with big operators, which are 
> international in flavour. Often those awarding contracts overlook 
> Australian firms, which can produce very good IT solutions at a 
> fraction of the price, and with a better backup service.
>