[LINK] Gershon Report on Australian Government ICT

[Tom Worthington]

The Review of the Australian Government's Use of 
Information and Communication Technology by Sir 
Peter Gershon, was released by the Minister for 
Finance on 16 October 2008 
<http://www.finance.gov.au/publications/ICT-Review/>.

This provides a snapshot of the current state of 
ICT in the Australian Government. Sir Peter 
comments that agency autonomy "model of weak 
governance of ICT at a whole-of-government level" 
is sub-optimal. He argues for sustained 
leadership by top officials and Ministers and 
resources for change, and skilled staff. The 
report presents a powerful argument clearly, but 
is overly optimistic as to how quickly changes can be made.

The report recommends development of a 
whole-of-government ICT sustainability plan, in 
conjunction with the Department of the 
Environment, Water, Heritage and the Arts 
(DEWHA), to manage the energy costs and carbon 
footprint of the Government’s ICT activities. 
Ideally, a sustainability plan can be integrated 
with the reports other recommendations for a 
whole-of-government approach to data centres, 
governance, spending and skills, so that 
environmental improvements can be combined with cost savings.

Recommendations such as a 50% reduction in 
contractors in 2 years will be difficult to 
achieve. Restoring the whole-of-government ICT 
career structure, which was dismantled with 
outsourcing, will take time. A 
whole-of-government strategic ICT workforce plan 
should be made easier by recent developments in 
technology and training, with better standards 
making skills portability more feasible.

The Executive Summary and each chapter of the 
report has been provided as a separate web page, 
as well as the full text in one 3Mbyte PDF 
document. Providing the report sections as web 
pages greatly improves access and the Minister's 
staff are to be commended for this. However, 
there is one major flaw in the design of the 
department of finance web site, with web pages 
having an excessively large side menus, which 
make up 78% of some HTML files. The Finance 
Department could commence implementation of the 
Gershon reforms with an optimization of the 
design of its own web site resulting in a 50% 
reduction in web server size and bandwidth needs.

     KEY FINDINGS

     After detailed analysis of the evidence, the 
review identified the following key findings:

        1. There is weak governance1 of pan-government issues related to ICT.
        2. Agency governance mechanisms are weak 
in respect of their focus on ICT efficiency and 
an understanding of organisational capability to 
commission, manage and realise benefits from ICT-enabled projects.
        3. The business as usual (BAU) ICT 
funding in agencies is not subject to sufficient challenge and scrutiny.
        4. There is a disconnect between the 
stated importance of ICT and actions in relation to ICT skills.
        5. There is no whole-of-government2 
strategic plan for data centres. In the absence 
of such a plan, the Government will be forced 
into a series of ad hoc investments which will, 
in total, cost in the order of $1 billion more 
than a coordinated approach over a 15-year period.
        6. The government ICT marketplace is neither efficient nor effective.
        7. There is a significant disconnect 
between the Government’s overall sustainability 
agenda and its ability to understand and manage 
energy costs and the carbon footprint of its ICT estate.

     At the heart of these findings is a 
conclusion that the current model of very high 
levels of agency autonomy, including the ability 
to self-approve opt-ins to whole-of-government 
approaches in the ICT domain, leads to 
sub-optimal outcomes in the context of prevailing 
external trends, financial returns, and the aims 
and objectives of the current Government. The 
impact of this autonomy has been heightened by a 
previous lack of strong focus on 
whole-of-government ICT issues at both 
Ministerial and top official levels. This 
conclusion applies no matter how well-intentioned 
individual agencies are in their pursuit of whole-of-government outcomes.

     The current model of operation is very close 
to treating FMA Act agencies as though they were 
independent private sector entities. The agencies 
are, however, very different in a number of 
aspects: they are funded by the taxpayer, they 
cannot go bankrupt, they have very little or 
nothing of the ‘time=money’ dynamic of the 
private sector, and they have no simple bottom 
line outcomes against which their success or failure can be measured.

     Against the background of the Government’s 
objectives and the pressures to improve 
efficiency and effectiveness wherever possible, I 
consider some rebalancing between agency autonomy 
and coordination across government is both 
desirable and necessary in measures related to 
ICT. Such a move is in line with trends in the 
United Kingdom (UK) and United States (US) 
Governments, as well as large private sector organisations.
     Summary of key recommendations

     The following comprise the primary 
recommendations of this review. The complete list 
of my detailed recommendations is found at 
Chapter 5 of this report. A summary of how the 
recommendations meet the Terms of Reference can be found at Appendix K.

     Governance

         * Establish a Ministerial Committee on 
ICT to be responsible for the key 
whole-of-government ICT policies and the overall 
strategic vision for how ICT should support the 
achievement of the Government’s outcomes and wider policy agenda.
         * Create a Secretaries' ICT Governance 
Board (SIGB) with a strong mandate from the 
Government to drive the agreed recommendations 
arising from the review and focus on addressing 
the key business issues to improve the efficiency 
and effectiveness of the Government’s use of ICT.
         * Allow agencies to obtain opt-outs, 
based on genuine business need, from agreed 
whole-of-government activities. Opt-outs to be 
approved by the Ministerial Committee, informed by the SIGB.

     Capability

         * Improve agency capability to 
commission, manage and realise the benefits from 
ICT-enabled projects through the implementation 
of a common methodology for assessing agency 
capability based on self-assessment and periodic 
independent audit. Each agency Chief Executive to 
propose a target level of capability based on 
their agency’s and the Government’s strategic 
priorities, and for this to be independently 
validated. Agencies to develop a capability 
improvement plan with commitment, and agreed 
actions, to address identified gaps.

     ICT spend

         * Target to move total FMA Act agency 
ICT spend from an average 77:23% split between 
ICT BAU activities and creation of new capability 
in 2007–08 to an average 70:30% in 2011–12.
         * As initial steps towards this goal, 
reduce the ICT BAU budgets of the largest 28 FMA 
Act agencies (Defence excluded) with ICT spends 
in excess of $20 million per annum by 15% from 
2007–08 actuals (for a list of agencies refer to 
Appendix F), with a phased introduction over two years.
         * Create ICT Review Teams to help these 
agencies achieve or exceed the target reductions 
without impairing service delivery to citizens and business.
         * In addition, I recommend targeting 
agencies with total annual ICT spends between $2 
million and $20 million to achieve a 7.5% 
reduction on average of their BAU from 2007–08 
actuals (for a list of agencies refer to Appendix 
G) , with a phased introduction over two years.
         * The 15% and 7.5% reductions in total 
should save the Government around $140 million in 
the first year and in excess of $400 million in 
the second and subsequent years. I also recommend 
that 50% of the savings generated by these 
recommendations be transferred to a central fund 
for reinvestment in projects to improve 
efficiency and effectiveness of ICT BAU 
activities, such as replacement of legacy 
software and hardware with high support and maintenance costs.

     Skills

         * Create a whole-of-government 
Australian Public Service (APS) ICT career 
structure, including training and development 
programs for ICT professionals in key skills areas.
         * Develop and maintain a 
whole-of-government strategic ICT workforce plan.
         * Reduce the total number of ICT 
contractors in use across FMA Act agencies by 50% 
over a 2-year period and increase the number of 
APS ICT staff. This should save the Government an 
estimated $100 million (across both BAU and project-related work).

     Data centres

         * Develop a whole-of-government approach 
for future data centre requirements over the next 10–15 years.

     Sustainable ICT

         * Develop a whole-of-government ICT 
sustainability plan (in conjunction with the 
Department of the Environment, Water, Heritage 
and the Arts) to manage the energy costs and 
carbon footprint of the Government’s ICT activities.

     Implementation

     My recommendations entail a major program of 
administrative reform and cultural change. Based 
on my experience of creating sustainable change 
in the UK public sector there are two critical 
requirements which will determine the success of 
the proposed program: first, sustained leadership 
and drive at Ministerial and top official levels; 
second, ensuring the enablers of change are 
properly resourced not only in funding terms but 
also skills of the right calibre.

     The early decisions of the Ministerial 
Committee and the SIGB will need to send out 
clear signals about the pace and direction of 
change which is then reinforced through 
subsequent decisions. It will be essential to 
ensure that agreed whole-of-government ICT 
approaches and arrangements are ‘fit for purpose’. ...

     From: Executive Summary, Review of the 
Australian Government's Use of ICT, Sir Peter 
Gershon, 28 August 2008 (released by Minister 
Tanner 16 October 2008) 
<http://www.finance.gov.au/publications/ICT-Review/summary.html>.

ps: More in my blog at: 
<http://www.tomw.net.au/blog/2008/10/gershon-report-on-australian-government.html>.


Tom Worthington FACS HLM tom.worthington at tomw.net.au Ph: 0419 496150
Director, Tomw Communications Pty Ltd            ABN: 17 088 714 309
PO Box 13, Belconnen ACT 2617                      http://www.tomw.net.au/
Adjunct Senior Lecturer, Australian National University