NSW formalises ‘cloud-first’ with new policy



news The New South Wales State Government has formalised its already extremely proactive and positive approach towards the adoption of the new class of cloud computing services within its operations, issuing a new cloud computing policy this week which forces departments and agencies to consider the cloud when undertaking ICT procurements.

In a statement, new NSW Minister for Finance and Services Andrew Constance said cloud services facilitated “simple, convenient and on demand access” to a shared pool of computing services and the deployment of such technology was a key goal of the NSW Government’s 2012 ICT Strategy.

“Cloud is the future of ICT service delivery and this policy puts NSW at the forefront of the digital economy, giving public sector agencies the tools and information they need to adopt cloud-based solutions,” Constance said. “The policy will be used by decision makers to drive innovation, efficiencies and deliver better outcomes when entering into arrangements with suppliers of ICT services. It will improve service delivery by allowing more agile, flexible and reliable technology and it will deliver cost savings by helping us get better value for money for these services.”

The policy (available online in PDF format) states in its opening pages: “To progress the transition to a service orientation, NSW Government agencies will now be required to evaluate cloud‐based services when undertaking ICT procurements to determine the ICT delivery model that provides the best value sustainable investment, taking account of the full range of cost‐benefit considerations.”

Constance said the policy was complemented by a new as-a-service module of the ProcureIT contracting framework used by the state. This will make procuring cloud-based services easier by cutting red tape for both business and government, according to the Minister’s statement.

“We are not only making it easier to adopt cloud-based solutions. We are creating standard terms and conditions so that the procurement process is straight forward and provides certainty for buyers and sellers,” Constance said.

In the Minister’s statement, Australian Information Industry Association (AIIA) chief executive Suzanne Campbell welcomed the release of the NSW Government’s ‘as a Service’ Module to support procurement of cloud services. “Cloud based services offer the opportunity for increased operational efficiency and service agility, both of which are critical as business transforms to a digital operating environment,” Campbell said. “AIIA is pleased to have worked with the NSW Government on this latest procurement development.”

The news comes as the NSW State Government has recently claimed initial success in its high-profile deployment of a cloud-based ERP consolidation project at the NSW agency of Trade and Investment, claiming that so far the project has been delivered “on time and on budget”, but with a large chunk of the work still to go.

The deployment, announced in July 2012, involves the transition and consolidation of NSW Trade & Investment’s legacy ERP system including 16 agencies – totalling over 8,500 employees – onto a single, consolidated SAP cloud platform. “As part of the three-year, $14.5 million agreement SAP will deliver a range of cloud solutions that includes SAP Business ByDesign, SAP Payroll, and cloud consulting services,” said SAP when the deal was announced. The agency, according to SAP, expects to deliver savings of more than $12.5 million annually by enabling greater efficiencies across the entire organisation. At the time, SAP said the deal represented its largest Business ByDesign win globally, and the first cloud platform win in the Australian public sector. It is being deployed by Consulting Networks, part of the CN Group of companies.

Speaking in a NSW Parliament budget estimates session recently, the department’s director-general Mark Paterson said the project had already been “very successful”.

“We started the task with six different finance systems, six different payroll systems and six different human resources and document record management systems that did not talk to each other and had no common accounts,” the public servant said. “From start to finish, from going to the marketplace and contract selection to go-live, was done in under 12 months. Phase one of the implementation, which is the main department, went live with the finance component in December of last year and we went live with the payroll component in March of this year. It will provide a pay-back inside 12-months from the investment that was made in undertaking this activity.”

Paterson favourably compared the rollout to the disastrous botched payroll systems upgrade which took place at Queensland Health. The project, which was recently the subject of a formal commission of inquiry, spun out of control and failed to pay many Queensland Health medical workers on time or at all upon implementation. It is currently estimated that the total cost of the project will run to $1.2 billion. The failure by IBM to deliver the project as specified has resulted in the company being banned from further contracts in the Queensland State Government until it can demonstrate it has rectified its processes.

The New South Wales State Government today kicked off two trials of virtual desktop and cloud email services, in a move which could eventually signal a mass migration of some 30,000 government users into the cloud.

The State Governments of Queensland and Victoria have also indicated recently that they believe cloud computing will represent a large part of the future of enterprise IT deployments, and are also shifting their procurement frameworks along cloud lines.

Extended opinion/analysis to follow.


  1. As a member of the NSW Government’s ICT Advisory Panel I suppose my comments are biased, but NSW is to be admired for the way it is approaching the implementation of its ICT strategy this time around. The approach is well considered and pragmatic … trying to find services that already work and then trying to apply them in the context of a NSW agency and then leverage and share them more widely.

    There will be problems and gremlins (of course), but the approach of seeking as much as possible to leverage externally provided services with minimal customization is the only sustainable way forward really for agency ICT given the budget realities. The big change in thinking with the cloud first approach is that it leaves agency executives in the driving seat while still creating the potential for adoption of large scale shared services and platforms that deliver economy of scale benefits. Agencies will choose a particular cloud service because it is better, faster, less costly and (overall) less risky – not because they are commanded to do so by a central agency.

    The art of this, therefore, is all about ensuring that there is transparency of experiences and learning across agencies and that ‘sticking points’ in procurement process, contracts, regulatory compliance etc. are resolved once then communicated widely to avoid each agency having to grapple with the issues from first principles.

    The ultimate benefit sought by cloud first is that agencies will gain access to infrastructure and applications that ‘just works’ … “cloudy is as cloudy does” … so that they can focus on managing INFORMATION professionally and on driving ICT-enabled policy and service delivery innovation.

    The ‘just works’ part is the challenge for the ICT industry. Cloud first is premised on the availability of relevant, reliable, robust and secure cloud services … so there is a ‘chicken vs. egg’ dilemma. The crucial first step however is for governments to show leadership and put their demand on the table to stimulate the development of services tuned for the Australian market.

  2. Looks like there is chaos in cloud land at the moment and judging by the rate of tax payers money spending on consultants to force this cloud as a succes, the real reason is cost saving from recurrent and cost wasting from capital

Comments are closed.