Govt IT buyers “struggling” with pace of change


news Government departments and agencies are “struggling to keep up” with the pace of change in the technology sector, analyst firm Ovum said in a research note issued this month, with the rapidly evolving technology landscape outpacing the speed of procurement cycles.

Over the past several years, Australian Governments at both the Federal and State level have suffered from a number of issues when it comes to keeping up with the speed of technological change. The problem has been evident when it comes to the deployment of both basic IT infrastructure such as desktop, network and server infrastructure, but front of house applications capability has also suffered.

For example, it was recently revealed that the Queensland Government had not yet upgraded tens of thousands of its desktop PCs from Windows XP to Windows 7, and had put a price tag on the cost of upgrading the dated systems of more than $100 million. However, the upgrade need has come at a time when the state has kicked off a major round of cost-cutting under the new LNP administration, and the upgrade is far from assured.

In the Federal Government, analyst firm Ovum recently labelled its approach to adopting the new generation of cloud computing technologies as a “cloud-last” approach. Instances of deployments of software as a service, platform as a service, or infrastructure as a service models are quite rare in government circles in Australia, despite the fact that internationally, countries such as the UK and US have taken explicit “cloud first” approaches to the issue, and the fact that cloud computing is increasingly a popular deployment model in the private sector.

It’s a similar situation when it comes to the ability to deliver major IT projects. In November last year, for instance, Victoria’s Ombudsman handed down one of the most damning assessments of public sector IT project governance in Australia’s history, noting total cost over-runs of $1.44 billion, extensive delays and a general failure to actually deliver on stated aims in 10 major IT projects carried out by the state over the past half-decade. Similar problems have been evidence in New South Wales and Queensland, and smaller issues in Western Australia.

In a statement published earlier this month, Ovum Australia research director Kevin Noonan, who spent more than 28 years in a number of government management roles before joining the firm, wrote that it was the pace of change itself that governments were struggling with.

“Many procedures for government procurement can be traced back through earlier stages of technology development,” Noonan wrote. “Over time, procurement has delivered substantial value and, like technology, it has developed and matured. However, the technology sector is changing at an increasing pace and procurement is struggling to keep up.”

Most major government IT procurement exercises are conducted through public tendering processes, involving the publication of detailed specification documents and an extended period of deliberation and consultation with bidders. In some cases, such processes can last several years.

Noonan wrote that firstly, the changing technology landscape meant that the whole process of setting requirements for IT procurements needed a “re-think”, due to the much richer set of options on offer to technology buyers — ranging from risk-sharing approaches, outcomes-based payment approaches, commercial off the software models and also cloud computing solutions.

“Old-style business analysis began the process more or less with a blank sheet of paper. Today, the business is still important, but requirements are becoming more outcomes-focused,” he wrote. “This means suppliers can have more flexibility to come up with innovative solutions and the business needs to be less prescriptive. If, for example, a COTS or cloud-based solution could satisfy 80% of requirements, then how much expense and added risk should be devoted to satisfying the last 20%?”

Secondly, Noonan wrote that interoperability was becoming a pivotal consideration in government purchasing, and that IT buyers needed to look to the long-term — to market directions and vendor strategy, even, beyond mere technical interoperability — when picking solutions.

“Software is moving fast from traditional engineering models to something much more adaptive. Traditional software tenders ask for features and functions based on known requirements. Future systems must be more adaptive in a world of evolving requirements,” he wrote.

Lastly, traditional contracts — even panel contracts — were not necessarily the answer, Noonan said, as they tended to entrench current practices instead of looking towards the future.
“Many traditional contracts are a poor vehicle for delivering real change, and instead tend to entrench current practices: if you always do what you have always done, then you will always get what you have always got,” he wrote. “If agency-wide savings and lasting change are to be achieved, then new contractual relationships are needed.”

If I was to get to the heart of what Noonan is talking about here, it seems to be his opinion that government procurement is locked into a very traditional system where a project is proposed (usually to rectify systems which are way out of date and in urgent need of renewal), then goes through approval process, goes to tender, and gets more or less implemented, only to be drastically behind the curve by the time it’s finished. With better budgets and more flexible management, the private sector is often able to escape this problem.

The Ovum analyst appears to be arguing that procurement needs to move in directions that the software development industry has long been pushing into — agile development, where developers have been able to escape rigid software development processes and big project timelines (which are never met) and shift into a more flexible, constantly evolving cycle where change is accepted as the norm — in fact, the daily norm — and that making constant micro-adjustments to a project is the way forward.

I have to say, I wholeheartedly agree with Noonan. It is more than apparent that for most government departments and agencies in Australia (with the exception of the really huge organisations such as the Australian Taxation Office and the Department of Human Services, which can force through change through sheer power of dollars), the model of IT procurement and implementation is fundamentally broken. I’ve reported on dozens of failed government IT projects over the past five years or so; usually in state government. And basic government IT infrastructure is notoriously out of date; usually just basic Windows XP desktops, old-style analogue telephony; server infrastructure in outdated datacentres and poorly virtualised; the list goes on.

In addition, how can these kind of traditional procurement cycles possibly deal with the fact that revolutionary new technology is being introduced at a hugely rapid rate? If you don’t think it is, consider the fact that the iPad was only introduced to the world two years ago, and the iPhone only hit Australia in 2008. Major organisations such as Telstra, Optus and Fujitsu have only built large Infrastructure as a Service hubs locally within the past three years. Unified Communications rollouts have only taken off within the past half-decade — and already some of its fundamental underpinnings have been called into question. Microsoft only launched Office 365 a year ago. How can government CIOs be expected to plan on a three to four year basis, given this dynamic?

What I would like to see more and more of in Australia’s public sector is highly tactical IT deployment. I’m talking about things here like Bring Your Own Device policies. Skunkworks projects based on cloud computing platforms to deliver small but needed improvements to legacy systems. Flexible contracts with basic technology suppliers such as Microsoft, HP, IBM, Dell and others which would allow departments to scale up and down their use of IT infrastructure as a service. A focus on nimble systems and projects which can be deployed within a six month to one year time frame, at maximum.

In my view, the more departments and agencies can avoid “big bang”-style strategic IT projects and procurements, and focus on fixing operational headaches through tactical IT deployments, the more things will get better. A good example from the private sector would be Woolworths’ recent deployment of iPads and Google Apps to store managers. I wrote this at the time:

“Firstly, this is a perfect example of what I would call a ‘tactical’ IT deployment within an organisation. Woolworths’ IT team has clearly looked at the situation with its 890 store managers located around Australia and put together a micro-project which will instantly allow them to be more effective in their jobs. Using off-the-shelf, predominantly consumer technology, Woolworths has been able to quickly develop and drop in a tactical solution to aid in better store management and customer service.”

Yes, I know not everything can be solved through Google Apps and iPads, but delivering these kind of small projects can go a long way towards delivering learnings and organisational confidence to tackle major projects. Do something small, quick and fast, and do it successfully — then repeat that model, scaling up. We don’t see enough of this kind of behaviour in the public sector, which always seems to go for large projects which inevitably run over time and over budget — if they deliver at all.


  1. All well and good, Renai, but we all know how it works. Anyone who has worked within government and also written tender response documents knows how it all works. Big vendors, politicans saying we have bought the biggest and best, global consulting houses with their rivers of gold. And addicting their clients.

    If anything the status quo gets reinforced even more post failure. We need more methodologies, more governance, more ….. the increasing dominance of Prince 2/MSP is a case in point. Further look at how the big consulting houses are recruiting exDGs to their ranks. And how these consulting houses are being employed to give the tick over these same projects by the politicans and senior government staffers.

    We all know its stuffed and doesnt deliver but where are/what are the forces for change.

    Many know its broken and many complain about the crap lack of delivery of big global consulting houses but they are still being used and still have rivers of gold to protect.

    So perhaps you can write further on the subject. Simply outsourcing isnt the answer either. Nor is killing an internal IT department and handing it all over to a cloud providers. So how about some further discussion about the forces at work and what would be needed for such changes.

  2. Struggling to keep up? From where I sit (in Qld govt) it’s more like heads in the sand. The people running IT don’t want to know about change and are perfectly happy with their decades-old development and procurement models, thankyou very much.

    Just this week the corporate IT overlords got wind of the fact that I was going to bypass them completely (due to never-ending internal delays and enormous costs) and deploy a web project in the cloud. You would scarcely believe the horror, indignation and sheer panic this has caused at all levels. It’s looking like the whole idea will have to be canned, and the end-user (ie the Queensland taxpayer) will have to wait until mid next year instead of next week to have a long-awaited solution delivered. Oh and they’ll have to pay more for the privilege. Suckers.

    Episodes like this give me little confidence in the ability of IT departments to adapt. I think increasingly we’ll see govt departments do what I tried to do and bypass in-house IT as much as possible. After all if the cloud can deliver everything you need, why would you allow a bunch of dinosaurs to stand in your way?

    • Jeremy, no offence to you. But I have been on the flipside of that situation. We had dev’s developing products with little to no interaction with IT, and then when the product was released, it not only failed, but resulted in damage to other systems. IT where then expected to come in and resolve the issue. Which we did.

      There is a happy medium however. Checks and standards are put in place to handle the 80% the other 20% needs to be handled by exception, which means looking outside the box, and doing so in a timely manner.

      Bottom line, get better management.

      • At Suncorp, the CIO Jeff Smith actively encourages the developers to pick their own tools and develop their own solutions — then he’ll allocate budget where appropriate. There’s a bit about it in this article:

        I agree it needs to be a balance — a combination of ‘bottom up’ and ‘top down’ approaches. There needs to be some gatekeeping — but that gatekeeping needs to not stand in the way of innovation. It’s a hard balance to get right but I think it’s certainly possible.

        Certainly, these days I would be interested to know why there would be a case where web projects would *not* be deployed in the cloud — it seems like a no brainer that it would be. But I guess State Government is a highly bureaucratic beast ;)

        • See Better Management :-)

          Seriously the biggest gripe I have had with Management in both Govt and Commercial are the attempts to use a technical solution to resolve what is essentially a management issue.

          Don’t put blocks in place because one person continues to do the wrong thing, Manage that person(out of the business if necessary). A classic is the whole removing the ability to use “reply to all” just because “some” people don’t think before they hit it.

          Sometimes managers need to, you know, Manage :-)

        • I have had the misfortune to take out a credit card with Suncorp two years ago. Once I had it there was no way to check it’s balance online or by phone. When I dealt with them I had to fax them things as they had no ability to take documents by email. You couldn’t get forms online, they had to mail them.
          It was like a bank from 20 years ago.

          • I had a homeloan with them for about 2.5 years (switched to nab 6 months ago as my wife started working there), I just used internet banking to check my balances. (had a credit card attached).

            I can’t understand why you had no access to the internet banking system?

            (they even have an optional authenticator for added security which I don’t see any provision for in westpac or nab’s internet banking login screens – the other banks I use regularly)

          • I have no idea. When I needed to make some changes that require paperwork they mailed it to me saying it wasn’t available online. When they said I needed to post it I asked about email, they couldn’t do that but I could fax it. Maybe they just hadn’t got their CC act together. A lone credit card not linked to a bank account or home loan was sort of orphaned.

      • There is a happy medium however. Checks and standards are put in place to handle the 80% the other 20% needs to be handled by exception, which means looking outside the box, and doing so in a timely manner.
        I’m more than happy to compromise, but the only response I’m getting from IT is “no, you can’t do that, we will actively prevent it from happening, discussion over”. To be clear, this is a response to the word “cloud” and has nothing to do with a specific implementation. It’s hard to find a happy medium under those circumstances.
        Bottom line, get better management.
        Easier said than done in government!

  3. Hmmm … it is indeed a perilous and frustrating swamp … and we need leaders to guide us out of it to higher ground.

    How should a leader behave in 2012?

    (1) Understand and articulate a compelling vision of the new policy or service delivery outcomes sought.

    (2) Influence upwards to secure adequate authority to pursue these outcomes.

    (3) Work out some possible sources of funding – be creative!

    (4) Frame up a high-level common-sense view of people, process and technology requirements – keep it simple.

    (4) Engage with credible industry advisers and vendors to suss out the state-of-the-art in terms of ways that ICT could be sourced and applied to deliver the outcome.

    (5) Hmmm … have a good hard think about the trade-offs between demand (outcomes sought, requirements, funding, constraints such as skills, ICT policies etc.) and supply (possible solutions, costs, timeframes etc.)

    (6) Iterate all these factors to determine a way to deliver the first iteration of a scaleable production-quality solution within 3-6 months. This will require deployment, on the supply-side, of substantially pre-existing solution elements on a proven, trustworthy, scaleable and configurable platform with minimum customisation … so some pragmatic compromises/rethinking will be required regarding demand-side expectations and requirements. Persuade folks to focus on the outcome (above all else) and to HTFU and adapt their understanding of what they desire/need to the reality of the goal of delivering the first iteration of a scaleable production-quality solution within 3-6 months … without fail.

    (7) Defend this approach against anyone that seeks to prevent achievement of the goal of delivering the first iteration of a scaleable production-quality solution within 3-6 months … unless they have a way to help do it better, faster, at lower cost or lower risk. If not, tell them to bugger off (politely of course). In particular, if “ICT Policy and Standards” get in the way then consider how they assist in the goal of delivering the first iteration of a scaleable production-quality solution within 3-6 months … if they don’t then there has obviously been some kind of clerical error and they can safely be ignored.

    (8) Make sure that the essential bases of compliance and risk are covered off: legals, privacy, record keeping, security etc. to avoid a being sent to jail … but be creative about how these bases can be covered while still delivering the first iteration of a scaleable production-quality solution within 3-6 months. Refuse to accept “No, because …” for an answer. Insist on “Yes, if …” and then solve for the “ifs”. Focus on the outcomes not the obstacles.

    (9) Do it. Deliver the first iteration of a scaleable production-quality solution within 3-6 months.

    (10) Celebrate success. You now have hands-on experience of agile project management and cloud services!

    (11) Start planning the delivery of the next iteration of the solution – to be delivered in under 3 months.

  4. I’d like to correct some matters of fact. Firstly, Steve acknowledged that the notion that AGIMO had a ‘cloud last’ policy was not correct. His words: ‘Hmmm … yes OK John … “cloud last” is pretty harsh … perhaps AGIMO’s stance is best described as “cloud when we, and it, are ready” … which is no bad thing.’ These were on the original post ( Not referring to them while relying on the original quote seems wrong to me.

    Second, some fact checking would be useful (as pointed out in an earlier post on this site The virtualisation ratio in large agencies in the Australian Government is 2.3:1, substantially ahead of the Gartner measure world benchmark 1.9:1 ( PDF Slide 26).

    Thirdly, given our willingness to be engaged, one could ask questions of us before publishing – of the 83 agencies which recently completed our common operating environment survey, 74% run Windows 7, 5% run Vista and 21% run XP. In August 2012, Wikipedia (yes, I know. Don’t go there.) reports that, of Windows users generally, these ratios would be 57, 11 and 32. (

    Whether one likes the Commonwealth Procurement Rules or not, they are Rules, issued under Regulation 7 of the FMA Regulations 1997 ( I recommend a quick read – less than 30 pages, well spaced. They don’t impose the limits implied above. A COTS policy is in place ( and it is mandatory. New cloud guidance has just been released ( One of our regular critics (,feds-moderate-cloud-policy-guide.aspx) couldn’t find much wrong with it.

    Our panel contracts are returning significant savings ( PDF pp. 5-6).

    Can more be done? Can we do it better? Of course. Is discussion, even open discussion like this useful? Yes. But, please, let’s start from a basis of facts. Unproven generalisations are no basis for serious considerations.

    • One really has to wonder if Ovum’s clients are getting value-for-money if a casual googling provides more insight into government IT than their paid reports ;)

      • Hi M.
        Ah-ah, so you’ve uncovered Ovum’s secret weapon! 
        Analysts tend to be recruited from around the world. Ovum has a number of its senior international analysts living here in Australia. So you’ll find a lot of local commentary and public engagement, simply because it’s a good way to stay close to what’s happening. Written reports are of course fundamental, but there is also a lot of customer briefings and bespoke analysis going on. This doesn’t necessarily make it to the public domain.
        Turning to the discussion at hand:
        My recent article, refers to the need for a change in focus in government procurement. Some governments are already taking up the challenge, particularly with some agency level contracts. Others are not.
        The article was based on a research paper that I published earlier this year. This research was sourced from detailed Federal/State interviews, plus workshops with about 200 government senior executives around Australia.
        The report found there is a sense of changing attitudes, particularly with some of the more forward-looking agency CIOs. A number had already realigned their role, from internally focused enforcers of the rules, to become more drivers of IT enabled corporate agendas.
        The rationale is simple. There is only so much you can achieve just by squeezing unit cost savings, or by delivering infrastructure improvements. During the interviews, I asked a number of open-ended questions. Some CIOs spoke up front about the technical excellence of their infrastructure, and about how much money they had saved through contract negotiations. Others began with a more corporate perspective, where they discussed their own role as part of the executive in driving corporate outcomes. These CIOs were more interested in delivering projects that worked, and in winning the big prizes through corporate-wide savings.
        Perhaps, all this could just be described as just a “leadership” vs “management” discussion, but it goes much deeper. This is particularly the case when we get down to specific actions such as procurement strategies and government/vendors relationships. In my recent article, I outlined how community expectations of government are fast changing, and that government could easily find itself left behind in the race that really matters.

    • hey John,

      thanks for your comments.

      Just one thing I would point out — while much of what you’re saying does represent an accurate summation of how the Federal Government is tackling these kinds of issues, this article is also extensively about state governments — and that is a completely different situation. Broadly, state governments right around Australia at the moment are completely failing to deliver on IT projects or keep their systems up to date. I know the situation is better in the Federal Government, but really, that’s only one aspect of Australia’s public sector.

      Kind regards,


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