In the lead-up to the last election, Malcolm Turnbull spoke loftily about his government’s preparedness to forge ahead in this brave new world of digital transformation.
“We have established a Digital Transformation Office and made innovation in government services an important focus of our National Innovation and Science agenda. We have delivered a public data policy and released more than 8000 datasets in anonymised and machine readable form. In addition, we will use public dashboards to measure our performance, which will be benchmarked against best practice in the private sector.
“The coalition will accelerate the digitisation of government services and drive innovation in government by investing $50 million to modernise myGov and streamline myGov login process; delivering a digital transformation roadmap for government by November 2016; [and] establishing a taskforce in the Prime Minister’s Department to reform government ICT procurement policies.”
Unfortunately, as is so often the case with Turnbull, the words do not match the deeds. In fact, his Digital Transformation Office chief Paul Shetler just quit, delivering what turned out to be a prescient spray on his way out.
“When it comes to service delivery, the transaction volumes of government services are small compared to the wider world. Government might think it’s huge, but its daily transaction volume is equivalent to just a few minutes of Twitter – or even less on the NASDAQ.
And still, government spends more than $16 billion a year on IT.
Our procurement and funding processes encourage big IT programmes, with bigger contracts. They drive a culture of blame aversion which create the perverse outcomes and actually increase risk. The history of the past several years of government IT failure is testimony to that.
This is further complicated and exacerbated by the lack of technical and contract management expertise in government. Too frequently, we actually ask vendors to tell us what they think we should buy.
There’s also a fear of digital. Over the last 40 years, as we’ve outsourced technology, there’s been a progressive de-skilling of the public service. The reliance on consultants is remarkable and the amount spent on them is eye-watering. That’s just not necessary if we re-skill the public service, which was one of the Prime Minister’s goals on establishing the DTO.
Government’s biggest challenge in the digital age is to completely upskill the public service so that it is well equipped to deliver the change that’s needed.”
Mr Shetler wrote of the many public servants who were working hard to improve the services they provided but “institutional inertia” and resistance to change remained serious problems.
“All of their work is made more difficult by the astonishing complexity across government,” Mr Shetler wrote.
“I’ve sat in meetings where senior public servants search out the exceptions and the edge cases – at the expense of simplifying the common case, because they’re focused on the process rather than a better outcome.
“It’s naive to expect an organisation that is very comfortable with its way of working to decide to spontaneously transform itself.”
The ATO has spent AU$700 million on computer software and hardware since 2011/12, according to its annual report. Most of the AU$34 million in consultancies spent over the past financial year also related to IT.
But that didn’t stop their “upgraded” services from crashing for several days this week. As tax agents tore their hair out, the ATO assured us that they are “working with our partners at Hewlett Packard Enterprise to determine the underlying cause.”
In September 2014, the Canberra Times reported that the Australian Taxation Office was considering an offer from computing behemoth Accenture to move outsourced IT work to the Philippines.
Apparently, Accenture has been quietly using IT workers in India for several years to work on Australia’s National eHealth Initiative, not that they are privatising Medicare or anything.
Speaking of which, Austender shows that today is the last day for tenders to the Department of Health for “Commercial advisory and procurement support services relating to health services and aged care digital payment services.” When I went to read the full details, as you can on all the other tenders, I was denied access – it is apparently restricted information. Hmmmmm.
Getting back to the ATO – in January this year, CT reported again on Accenture offshoring government contracts.
“Earlier this financial year the ATO commenced a short-term arrangement with Accenture to use their Philippines Delivery Centre to increase our IT capability in application development for new policy implementation,” she said.
“This additional capability is being used at peak times to temporarily support the ATO’s workforce and existing onshore arrangement with Accenture. The arrangement is expected to continue to December 2016.”
Accenture and the ATO have history, with the company reaping fees of $677 million for its work on the office’s trouble-plagued “change program”, which blew out in cost from an initial “fixed price” of $230 million in 2004 to $756 million when it concluded in 2010.
As it turns out, Accenture and HPE have an “outsourcing alliance.”
Community and Public Sector Union national president Alistair Waters said “Offshoring ATO IT development appears completely at odds with what the Prime Minister has said about supporting and developing Australian innovation. If this government had not cut the jobs of around one in five tax workers, this so called ‘support’ in the form of sending tax work overseas may well not be necessary,”
The examples of IT failures in government departments and agencies are endless and paying billions to external partners like IBM and HPE does not seem to be helping. The lack of IT expertise in the public service has allowed consultants and service providers to hold us to ransom, charging huge fees, still running over budget, and no penalty when their systems crash.
The Newman government launched legal action against IBM in 2013, arguing the company had misrepresented its capability to deliver a $6 million contract for a new payroll system on time and on budget. The rollout was plagued by delays and budget blowouts. When it did go live, the system failed spectacularly, resulting in thousands of health workers being underpaid, overpaid, or not paid at all.
But IBM challenged the lawsuit and pointed to a 2010 agreement that the company said released it from the damages claim.
A trial was held in the Brisbane Supreme Court last year with Justice Glenn Martin ruling in favour of IBM. The cost to taxpayers has been estimated at $1.2 billion and the debacle has been described as possibly the worst public administration failure in Australia.
So when Scott Morrison and Christian Porter bemoan the money wasted on “welfare cheats”, understand that they oversee a department whose computing system has not been upgraded since 1983 and which takes three months and costs $20,000 just to change the header on a letter.
They also pay billions in government contracts to companies who pay little to no tax in Australia like IBM who paid $5.8 million tax on earnings of $4 billion, and HP who paid no tax, and Accenture who are domiciled in Ireland.
It seems the government is more than content to shell out a fortune to their private enterprise buddies when what they should be doing is offering cadetships to talented IT students and rebuilding the public service expertise they have so wantonly discarded.
