news The South Australian State Government today revealed that it would shortly be kicking off a huge new round of IT purchasing initiatives which would affect a string of major whole of government contracts, as part of its long-running Future ICT Services Arrangements program.

One of the aims of the program, which has been playing out over the past decade, was the realisation of South Australia’s intention to exit from its massive 10-year IT outsourcing contract with Texan giant Electronic Data Systems, with the deal to be broken up into a large number of chunks and farmed out, often to other suppliers.

The completion of that contract took place in 2007, but South Australia is still gradually working through a series of contracts which are gradually coming to full term, with the initiative being steered by the state’s whole of government chief information officer Andrew Mills.

In a notice published through the state’s tendering system this week, Mills’ office noted that on 7 March it would hold an open industry briefing to provide the industry with information regarding the next round of contracts to be signed under the Future ICT Services Arrangements program.

The state’s Minister for the Public Sector, Michael O’Brien, and its ICT Board chair, Jim Hallion will speak at the briefing. “Attendees will be given high level information regarding the State’s ICT sourcing directions with a view to supporting industry engagement in the upcoming market approach -‘Tranche 3 Services Expression of Interest (EOI),” the note states.

In late January this year South Australia updated its public status document (PDF) to detail which contracts would be within scope of the Tranche 3 contracts to be discussed at the briefing.

In that list, the state noted that it had recently completed negotiating a new client computing (desktop PCs and laptops) and server equipment panel, with new contracts expected to commence from February this year. Previously the state bought the hardware through Acer, Dell and HP, in a contract initiated back in 2006 and which had been slated to end on 30 June 2011. It is not clear which suppliers now sit on the panel.

The state is also currently negotiating a printer and photocopier equipment panel, with new contracts in that area expected to begin in July this year. It is believed that Canon, Fuji-Xerox, Kyocera-Mita and Ricoh currently provide the state with its photocopier needs, with HP, Kyocera-Mita and Ricoh working in the printer area.

In the briefing next week, the state will primarily look at telecommunications contracts, including managed network services, ISP services, mobile carriage services, telecommunications services in general, “active devices” contracts (for example, routers), PABX maintenance and electronic messaging (email). However, it will also look at its Microsoft enterprise contract.

In the past, suppliers such as Dimension Data, Telstra, Internode, NEC and Cisco have been the prime beneficiaries from new telecommunications contracts in the South Australian Government. Other major contracts not yet in scope for the state include mainframe computing, storage and hosting services.

opinion/analysis
So far South Australia is the only state jurisdiction which appears to be doing a decent job of managing its whole of government technology contracts, with every other major state appearing over the past few years to have dropped the ball completely in the area. We just don’t hear about many whole of government technology contracts from states such as Queensland, NSW and Victoria any more. And I’m not surprised, with a series of audit reports over the past few years making it clear that when it comes to the governance of technology rollouts, those states have a lot of learning to do.

So what would I like to see from South Australia’s Tranche 3 of contracts? Well, of course it’s hard to say where each vendor sits relative to each other at the moment.

However, in general, I suspect Telstra still has a huge lion’s share of telecommunications contracts in South Australia. I’d like to see some of that work farmed out to Optus, which has a good and growing enterprise division, and local player Internode continue to pick up as much Internet services work as possible as well.

When it comes to PABX gear, I’d like to see some recognition of the worth of shifting to modern IP telephony platforms, with Cisco and Avaya getting gurnseys in that area, as they’re the dominant players in that still emerging field. In switching, if that is in scope, it’d be nice to see Cisco given some competition by the likes of HP ProCurve. Switches in 2012 don’t always need to cost the earth.

As for email, if that area needs work, I’m sure an integrator like Dimension Data will pick up some work there. Realistically, for an organisation like the South Australian Government, Microsoft Outlook/Exchange is basically the only option. I’m sure there are still some Lotus Notes and even GroupWise installations in Adelaide which need to be “upgraded” to Exchange.

Did I miss anything?

news Tier two banking and insurance giant Suncorp has picked Oracle’s next-generation banking platform to replace its ageing Hogan core banking system, as the momentum around core banking replacement projects accelerates in Australia.

In March 2010 Suncorp chief information officer Jeff Smith (pictured, right) acknowledged the bank was investigating the case for replacing its core, although at the time the CIO noted he believed there was still life in the legacy infrastructure. He said Hogan operated “quite well”, but the software’s owner CSC hadn’t upgraded it in a long time: “We are taking a look at that now, saying: ‘Do we want to go and do something bigger?’”

Yesterday The Age published an interview with Smith confirming Oracle had been selected and the project would go ahead. “The big priority is around simplification … this year it’s going to be simplifying our banking system,” Smith reportedly said.

Further details have also been published on the LinkedIn profile of Mark Smith, an infrastructure architect at Suncorp, who appears to be seconded from Oracle to work at the bank and assist with the project.

According to Smith’s profile, Suncorp has badged its core banking replacement project as the ‘Banking Platform Program’ (BPP). “BPP is the complete replacement of the banks core banking software with the new Flexcube product called Next Generation Platform (NGP),” Smith’s profile states. “Additional to the Flexcube product, they will be deploying the following Oracle prodicts: Golden Gate, Active Data Guard, ODI, OBIEE, WebCenter, SOA Suite, OSB, OEM, E-Business Suite, IDM Suite, BPA Suite.”

The decision represents a loss for CSC, whose Hogan software appears to be gradually losing ground in Australia to the likes of Oracle, and also SAP, who was in the running for the Suncorp deployment but lost out, despite having been used in a successful core banking deployment at the Commonwealth Bank of Australia.

Core banking platforms sit at the heart of any bank and constitute the base on which the bank’s technology platform is built – for example, modern applications such internet banking systems commonly sit on top. However, many of Australia’s banks have core banking platforms that have been in place for decades – often built on mainframe technology – and are becoming increasingly unwieldy and difficult to maintain.

Other banks such as the Commonwealth Bank of Australia have already instituted major programs to replace their core, but they can be pricey – CBA’s SAP- and Accenture-led overhaul has a budget of $1.1 billion. CBA chief information officer Michael Harte has hailed the new technology’s ability to provide ‘real-time banking’ – without the need to run batch processing jobs.

National Australia Bank has also put its foot in the water on its own core revamp based on Oracle, but others such as Australia and New Zealand Banking Group and Westpac appear to be holding off for now to focus on other projects.

In 2010, Smith said that Suncorp had been able to cut the cycle time down eighty percent to build a new service on its existing Hogan platform. The CIO noted opening accounts and conducting transactions between systems in the bank’s branch and automatic teller machine networks took place in real time even with Suncorp’s current platform. One of the main motivators to migrate to a new platform, he said, was the availability of talent to maintain it.

“We all have to be cognizant that the average age of Hogan developers is in the fifties now,” Smith said. “That is a bigger issue for me, because we want to keep people enthused and keep them engaged, but you are running into retirement years, and I think that is a bigger issue than the technology side. I think the big advantage of the new platforms is the ability to be able to do more with them because you have a bigger supply base of individuals and technology that you can use.”

In mid-2011, Suncorp also revealed plans to invest some $9 million in a new customer relationship management system from Oracle. The value of the new core banking platform has not yet been revealed.

opinion/analysis
I’m not surprised by the fact that Suncorp has chosen to take the plunge with a new core banking platform. Smith is a very forward-thinking CIO and has long appeared to have the complete support of Suncorp’s upper management and board when it comes to major new technology deployments. He’s one of the only CIOs in Australia’s current banking sector who enjoys that level of support — with the other one being CommBank’s Michael Harte.

Suncorp had already knocked so many systems upgrades off its ‘To Do’ list over the past half-decade. It makes complete sense for the bank to go after its core at this time.

A successful Suncorp deployment of Oracle’s platform will ratchet up the pressure on the other major banks yet to initiate a core replacement strategy — Westpac and ANZ — to get into the game. NAB is also deploying Oracle’s system, but very little is publicly known about how it’s going. From the little that the bank has said on the matter after it conducted some early test rollouts a while back, I have no doubt that it’s going slowly.

CommBank’s core deployment has given it a real advantage in the marketplace. If you sign up for accounts with the major banks (most of which I have) to test their customer-facing systems out, it quickly becomes apparent that there is just so much *more* you can do with CommBank’s systems — and so much faster.

New accounts are created virtually instantly, money is transferred around faster, and there’s a stack of little features which its online systems let you do — such as changing your PIN number online. If you haven’t played around with CommBank’s new online platforms, I recommend you do so. And that’s just the most obvious indicator of the deep underlying structural change the bank’s successful core revamp has wreaked on its systems. Now Suncorp’s going in the same direction.

Image credits: Delimiter, Suncorp

news Queensland’s Labor government has been caught on the wrong foot again with another failed IT project, with the Queensland Treasury Corporation (QTC) revealing it had spent $15 million on dumped finance platforms, recently terminating a $7.5 million contract with supplier Temenos and throwing away an equivalent amount on internal work.

Shadow Minister for Information and Communication Technology Ros Bates said in a statement that the latest gaffe proved that Labor’s IT disasters were not just confined to Queensland Health. “This latest costly IT gaffe comes on top of the recent revelation Labor has wasted $46 million on its inter-departmental e-mail system costing $23,000 per user, as well as the problem-plagued OneSchool roll-out and the long running health payroll debacle costing more than $220 million to fix,” Bates said.

Bates had previously slammed the Bligh Government’s IDES (Identity, Directory and Email Services) program as a key example of Labor’s long-term waste and mismanagement. In December, it was revealed that $46 million had been spent on the whole of government e-mail platform, despite only 2,000 people signing up to use the system. In July 2011, the Queensland Opposition had accused the incumbent Bligh Labor State Government of “hitting the panic button” in a delayed attempt to catch up on its ICT policy.

Among a series of IT disasters that have rocked the State Government, the most public has been the Queensland Health payroll debacle that had thousands of public sector health workers left without pay after the department’s upgrade to a new SAP-based payroll system was messed up.

Highlighting the “incompetence of the tired, 20 year old Labor Government”, Bates said that major IT projects have drained Queensland taxpayers hundreds of millions of dollars more than necessary. “Labor just can’t get IT basics right and Queensland taxpayers are paying the price,” said Bates.

Giving details, Bates said that the QTC’s 2008/09 Annual Report stated that the Temenos banking system had been purchased in April 2009, and had been scheduled to be implemented by July 2010. The 2009/2010 Annual Report stated that the new system was now scheduled to be launched in 2011.

“Backtrack 12 months and the QTC 2010/11 annual report makes no mention of Temenos. Not a word. It’s been dumped and along with it, roundly $15 million of taxpayers’ money,” Bates said. She mentioned that QTC allegedly plans to develop its own system—a move that is meant to be a last resort according to the Queensland government’s Chief Information Office policy platform. She accused Andrew Fraser of being Australia’s worst Treasurer, as he has tried to justify the Bligh government’s $15 million waster as an effort to “ensure a value-for-money outcome”.

Bates called on Simon Finn, the IT Minister, to own up and explain the latest IT scandal. “It’s time for change. It’s time to get Queensland back on track,” Bates said.

Image credit: Hans Gerwitz, Creative Commons

news The Federal Government’s chief auditor has warned that the Department of Defence’s ICT operation is teetering on the brink of a dangerous precipice, in a landmark report published this afternoon into its current ICT governance structures and projects.

The report, Oversight and Management of Defence’s Information and Communication Technology, offers a detailed window into one of Australia’s largest and most complex technology environments. Defence’s so-called Defence Information Environment (DIE) soaks up some $1.2 billion in annual expenditure and ranges over 500 sites in Australia and overseas, providing functions as diverse as weapons support and electronic counter-insurgency to more normal office functions such as word processing.

It is also, however, one of Australia’s most ageing technology environments. A succession of reports over the past half-decade has found that a number of Defence’s key support systems, as well as its most basic infrastructure, has become unwieldy and is holding the department back in terms of its ability to deliver on its goals and sometimes basic operational functionality.

In 2008 and 2009, for example, the department suffered a number of problems with its payroll systems which led to widespread employee complaints. At the time, a KMPG audit stated that the two key Defence payroll systems — PMKeyS and ADFPay — were facing vendor support issues as they aged. PMKeyS was first rolled out in 2002.

In another example, the department also currently operates an unwieldy structure for accessing desktop systems, which has seen many staff issued with two personal computers, for accessing information repositories with separate levels of secrecy. Defence’s IT management has been seeking to remediate both problems for a number of years, but has been hamstrung by a number of factors focused around the complexity of the department’s technology operation.

Federal Government Auditor-General Ian McPhee had both good and bad news for the department in his report published this afternoon.

The report states that Defence has commenced the “vital work” of remediating the “publicly acknowledged deficiencies” in its ICT systems, with the program of work progressing under the department’s wider Strategic Reform Program kicked off in mid-2009. At the time, the Government announced it would invest more than $940 million over four years to reform Defence’s IT environment. “Since then, Defence has made modest progress in improving the performance of its ICT systems and has started replacing obsolescent equipment,” the report states.

In addition, the 2007 appointment of Defence chief information officer Greg Farr has had an effect — with Defence seeking since that time to map and cost all of its ICT systems and investments, as well as developing a department-wide coordinated approach to ICT investment. Defence now has visibility of some 75 percent of its total ICT expenditure — a notable improvement on the situation in mid-2009, when it could only get a grasp of half.

In addition, Defence is finalising a two-pass approval project for ICT initiatives, as well as having set up a major overarching IT oversight committee and implementing the UK Government’s P3M3 management maturity ranking system. Defence has also recently signed a resources contract with five major industry partners to help meet its shortfall of some 350 ICT staff.

However, in many ways, it appeared as though the risks involved in Defence’s ICT strategy went far towards outweighing many of the department’s abilities to meet its goals.

“At the time of its March 2010 progress report to the Government, Defence considered the Strategic Reform Program to be as complex an organisational reform agenda as had ever been undertaken in either the private or public sectors in Australia,” the report states. “Delivering ICT reform in Defence is a challenge of a very high order, entailing the simultaneous remediation of existing systems, the development of ICT systems critical to the SRP reform streams, and the achievement of savings at the upper bounds of feasibility.”

“More than two years into the reform process, ICT continues to represent a material risk to the timely achievement of the SRP investment and savings targets set in support of the longer-term objectives of the [2009] white paper.”

Defence’s ICT environment, the report states, suffers from relatively immature governance processes, the lack of a department-wide view of ICT interdependencies and competing priorities, complex and “sometimes confused” accountability structures and a high level of demand on its ICT staffing resources — “currently some 350 staff short of projected requirements”.

With respect to the eight major SRP reform streams which depend for their success on associated ICT projects, “schedule slippage is already evident”, and project failure could have a domino effect on other projects. “In this challenging environment, strong leadership focus will be required to deliver the benefits envisaged for the Defence organisation from the ICT transformation program over the next ten years,” the report states.

The report makes two key recommendations for Defence’s IT management going forward, to help address the problems.

The first revolves around Defence’s CIO Group, led by Greg Farr. The report recommends that the group’s role as the coordinating capability manager for Defence ICT be clarified, and that other Defence program managers adopt a full partnership model with the CIO Group to deliver on projects.

Secondly, the report recommends Defence focus on improving the whole of department of its needs by establishing an enterprise-wide benefits realisation framework; ensuring it has appropriate financial systems to support effective planning and monitoring of ICT investments; and developing a department-wide approach to escalating and treating ICT program and project risks. Defence agreed with both recommendations.

opinion/analysis
This is hardly a surprise. Defence’s IT environment has been teetering on the brink of disaster for years … if you hang around Defence tech staff, you’ll hear horror story upon horror story of extremely outdated software and hardware systems still being used in production, constant small failures, patches and bandaids being applied everywhere to keep things basically functioning and so on. Defence CIO Greg Farr has spoken about many of these problems himself over the years, and spent quite a bit of time in his first several years in the job remediating the emergency issues so that his CIO Group could gain some credibility to get bigger projects up.

However, as everyone involved in the situation recognises, this sort of thing can’t go on forever. Eventually Defence will have to drag itself into the modern age, and that’s what the Strategic Reform Program (and especially the IT components of it) are all about. Bringing Defence up to speed in one massive decade-long project of work that when 2030 ticks around, Defence’s core technology platforms aren’t the technology equivalent of the Intel 386 PC.

Can Defence do it without too many headaches? There is plenty of evidence that it can. Farr himself has already been through one fairly similar program of work at the Australian Taxation Office, and he’s collected a bunch of capable lieutenants around him. The CIO Group will also be able to draw on the very capable resources of the senior IT executives at the ATO, Immigration and the Department of Human Services, which have all now got very substantial experience in transformation and remediation programs. In addition, there is a clear appetite for change and energy about Defence’s IT environment right now that bodes very well.

Of course, it won’t be a smooth ride, and that’s what today’s report is all about. If I could sum its argument up in two words, those words would be: “Turbulence ahead”.

blog The fallout from the reshuffle at Westpac continued today, with the Financial Review breaking the news that senior IT executive Sarv Girn would quit the bank in search of a chief information officer role elsewhere. According to the AFR, the executive was disappointed he lost out on the recently vacated Westpac CIO role to internal rival Clive Whincup, but also sees Westpac as shifting out of its IT transformational phase. The newspaper quotes Girn (behind its paywall):

“… the group is moving towards more of an efficient structure, whereas I prefer to work as a transformational CIO, driving change.”

Girn may have been disappointed to lose out on the CIO role, but my own opinion is that he was never really a contender. Sure, Girn was seen by many as outgoing CIO Bob McKinnon’s second in charge, and his formal title is group general manager of enterprise technology services. However, his strength has always been his technical prowess and knowledge of IT architecture, stemming from his history as CommBank CTO and Westpac CTO and chief information security officer.

The CIO role in a major bank is a political role more than a leadership or technical role, and while Girn is clearly one of Australia’s top IT executives, I’ve never thought of him as having the ruthlessness that a top-tier bank CIO role requires. This, in my opinion, is actually a good thing. It makes him a nicer person. Girn brings a rarer set of skills to the table than an executive like Whincup possesses, and I think he’ll find his feet in a role that will be interesting to him fairly quickly.

analysis Several weeks ago the Victorian Ombudsman handed down one of the most damning assessments of public sector IT 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 government over the past half-decade.

Shortly after the report landed, Delimiter published an analysis of what the state should avoid doing next. Gershon-style reviews, super-chief information officers being flown in to take charge, focusing on shifting everything into IT shared services centres; analysts agreed that these sorts of quick fix solutions would just lead to more of the same problems that Victoria has already been experiencing.

With these obvious wrong turns out of the way, the focus today turns to some positive thinking. What are the steps which the Victorian State Government should be taking decisively forward at this point? Where can it look to for inspiration and a roadmap to better IT governance?

Accountability
When we asked three leading Australian IT governance experts what Victoria should do next, one unanimous answer came back clearly and straight away: focus on accountability.

Steve Hodgkinson, a Melbourne-based research director with analyst firm Ovum and a former whole of government deputy CIO for the Victorian Government, issued a research note in the wake of the publication of the Ombudsman’s report noting that accountability in the “devolved structure” of government rests with department and agency senior executives.

“The solution should be approached from the perspective of ensuring that departmental secretaries, deputy secretaries and agency CEOs are paying adequate attention,” Hodgkinson wrote in the paper.
When such executives were paying attention, they would more carefully consider which projects were mobilised relative to their capacity to deliver, how projects were resourced and managed and how critical decisions were made, the analyst added.

Scott Stewart, a research director with Queensland-based firm Longhaus, agreed with Hodgkinson on the issue of accountability. He highlighted a project which then-US whole of government chief information officer Vivek Kundra had instigated in the first several years of the Obama administration which created an IT dashboard through which government staff could easily gain a birds’ eye view of all major projects and IT expenditure across all departments.

Part of the project was that each project had a picture of the accountable executive attached to it — usually a departmental chief information officer.

Although Kundra is no longer with the US Government, the IT dashboard lives on. And in fact, the technology behind it lives on and is publicly available so that other jurisdictions can adopt it. There is literally nothing stopping the Victorian Government from downloading the code to do so — a living example of the fact that public sector jurisdictions usually don’t compete with each other and have nothing to lose by sharing knowledge and technology.

Steve Bittinger, a government-focused research director with Gartner, also highlighted the IT Dashboard as a useful model for Victoria to adopt.

“The previous US federal government CIO, Vivek Kundra, focused substantial attention on this issue during his tenure. Notably, he established the IT Dashboard which shows status and spending information about all major US federal government projects. This is a level of transparency that we don’t yet see in Australia,” the analyst said.

Hodgkinson acknowledged that some would criticise this kind of accountability.

“At this point, some readers will react that senior executives in departments and agencies already face impossible burdens of accountability … so it is unrealistic to expect them to do more,” he wrote in his research note. “Our view, however, is that the sums of money involved in major ICT-enabled projects and their centrality to preparing departments and agencies to face future demands means that fixing this problem is now not optional.”

Re-pitching IT projects
Another initiative undertaken by the US Government under Kundra was an initiative he dubbed “TechStat”. The TechStat toolkit was also made publicly available alongside the IT Dashboard.

As detailed in a very useful article on the subject published by InformationWeek, TechStat sessions see an agency’s CIO and CFO, central government analysts and officials from related departments brought together with staff from the central whole of government office of the CIO to rapidly examine and evaluate the status and future prospects of a major IT project.

“It actually had an immediate effect,” says Longhaus’ Stewart, noting the sessions could be simple one hour sessions, but could take weeks for the departments concerned to prepare for. And if a project wasn’t re-approved through the process, it could have dramatic and decisive consequences for those running the project.

In many cases, after reviewing a project’s current status and likely future, the government decision-makers simply cancelled the projects or rolled them into other similar iniatives in different departments. In one example, Stewart says, three separate agencies came to Kundra’s office with smartcard projects. Two of the projects ended up being cancelled and a decision was made to have one single smartcard project across government.

On the website of the US Government of the CIO, the Government credits the two methodologies — the IT Dashboard and the TechStat system with over $3 billion in cost reductions. It’s likely the decisive decision-making style the systems brought in also had a wider ‘halo’ effect on the accountability and transparency of government IT projects in general.

After all, who would want to be hauled up before Kundra and his team for an intense one-hour TechStat grilling?

Ovum’s Hodgkinson, in his note, promotes a similar system for the Victorian Government. The Ombudsman recommended that a new sub-committee of Cabinet be created to approve and review the progress of ICT-enabled projects within a state. A similar committee existed briefly in 2004/2005. Hodgkinson noted that the challenge in making this sort of system work in practice was that it was difficult to sustain the interest of Cabinet Ministers in “such low-level operational matters”.

An alternative, he said, would be for the sub-committee to only meet twice a year, and for it to focus on accountability — instead of quarterly reporting detail.

“The question that the sub-committee should ask of each secretary, deputy secretary and CEO in charge of a major ICT-enabled project is simply this: ‘Will the project be completed as per the business case and approved project plan, benefit realisation plan and funding budget?’”

If the answer was no, Hodgkinson said, then proposals should be discussed and the project must be revised and re-approved (Kundra-style) or possibly cancelled. “Disappointing the sub-committee should be very damaging for executive bonus proposals,” he wrote.

“If department secretaries and agency CEOs were expected to provide unequivocal assurance that projects were on track to a sub-committee of Cabinet, then they would actually need to know that the projects were, in fact, on track,” he added. “The knowledge of this accountability would flow through into the way decisions were made to propose projects for funding, to set up projects for success and to ensure that the right decisions are made during implementation. The result would be for focus and accountability to devolve downwards from the top.”

Furthermore, Hodgkinson added, if there was any significant change in the chain of command for an ICT project, then the project planning should have to be re-endorsed afterwards by that department’s secretary.

“If accountability is a firm expectation,” he wrote, “then executives will think twice before accepting responsibility for a poorly planned, badly scoped, under-funded, under-resourced project expected to be delivered in unrealistic timeframes. It will no longer be an excuse that the project is just stuck with a set of bad decisions made by people who have already left the building.”

Gartner’s Bittinger points out that the Federal Government already uses the P3M3 project maturity assessment model developed by the UK Government to assess projects and agency capabilities in Canberra. Perhaps this is the sort of framework which could tie in well with the accountability and rapid evaluation suggestions discussed by the other analysts. Hodgkinson also suggested looking at the areas of investment management frameworks, so-called ‘Gateway’ reviews and best practice guidelines, although he noted that the problem is not the availability of good ideas and tools … “it is the appetite of department and agency senior executives to put them into action.”

Master architect groups and skills
One idea which Longhaus managing director Peter Carr is particularly keen on is the establishment of a central architecture group to guide cross-government IT architecture decisions. This would not be a ‘super-CIO’ group, but rather one focused purely on architecture. Major Federal Government departments such as Defence are known to have a great deal of focus on key architecture decisions.
Carr draws an analogy between town planning and IT architecture development, noting that for every major city council, there is a central town planner.

“They are the master architect,” he says. “That role has key clout in terms of the master plan of the city and all town planners must flow through that. The central IT groups; they’ve been unable to achieve that same level of central governance and architectural standard for a master plan for any of this stuff. There’s no true master plan.”

Carr says there is no escaping the fact that there is “tremendous, tremendous complexity” inside the systems of a major government department, but that he doesn’t believe that kind of ‘town planning’ capacity even exists at the agency level — let along across government.

The result is that different agencies procure different solutions for IT projects which can actually be quite similar — such as the situation where multiple smartcard projects exist within the Queensland Government, just as they did in the US before Kundra stepped in.

Carr points out that if each of Australia’s states wanted to replace their driver’s licence systems, it would end up costing something like over a billion dollars in total. However, he said, if the project was architected centrally a solution could likely be built for several hundred million.

This lack of central IT architecture planning results in situations where eight agency CIOs are looking to buy a case management system individually, instead of one coordinating body saying we want a scalable case management solution across government. And that, Stewart says, plays into the hands of vendors, who would rather sell the same solution eight times than once.

The Humane Genome Project had been able to eventually succeed in the gigantic task of mapping the human genome, Carr said. “Most organisations can’t even map their IT systems or services. We’re fundamentally failing. The portfolio view, a central architecture group: We don’t have that in IT. We should have it.”

There’s also another area which Carr believes the Victorian Government can make substantial headway; on skills.

In Delimiter’s last article on this subject, Carr put forth his view that there simply isn’t enough skilled IT labor resources in Australia to go around; especially at the price which Governments are willing to pay for it — and even if you count the resources of IT services companies in the mix. Carr says one positive step forward Victoria could take is to stop ignoring the opportunity to leverage offshored resources to get its jobs done.

“Governments have largely ignored the whole opportunity to leverage offshoring,” said Carr. “They’re the first to complain when they get charged $4,000 a day by IBM or Accenture to have project managers sitting around a meeting table three times a week. But the fact, is, IBM and Accenture will continue to charge $4,000 a day while there’s a model for it.”

“Governments need to fundamentally change the underlying mechanism for it.”

Virtually every major Australian organisation uses offshored resources of some kind, especially when it comes to technology. Every major bank has partnerships with offshoring companies like Infosys, Tata, Wipro or even traditional IT outsources like IBM or HP, which also operate their own facilities in low-cost countries such as India or China. Some, such as ANZ Bank, even operate their own internal facilities in such countries, while offshored call centres are extremely standard practice in 2011.

Up until now, Australian governments have been very reluctant to use offshore resources, due to issues such as data sovereignty, the need to protect the privacy of citizens’ data and the political unsightliness of pushing jobs offshore. However, the financial services sector is also subject to harsh regulatory controls in such areas has been able to deal with many of the same issues by using technology like virtualised desktops which lets data and systems remain in Australia but work be conducted on them internationally.

It may be time Australian Governments started looking at similar options; the times are certainly desperate enough.

The cloud and innovation
One significant aspect of Hodgkinson’s analysis of the way forward for Victoria relates to the need to change the way government technologists think about technology in general. In his research note, the analyst noted that the past half-decade has seen the IT industry experience “revolutionary changes” driven by new technology in areas such as mobility, social networking, cloud computing and advanced analytics.

“The ‘art of the possible’ has significantly developed and there are now many more options for how a policy or service delivery innovation might be addressed in ways that are faster, better, less costly and less risky than the traditional major ICT-enabled project approach,” writes Hodgkinson.

“The paradox is that governments typically tend to regard new solution approaches such as cloud computing as risky because they are unfamiliar … while the reality is that the familiar solution approaches of major ICT-enabled projects too often turn out to be the biggest risk of all when they waste time and money and totally fail to meet business needs.” Hodgkinson points out that some Victorian departments already have hands-on experience with public cloud computing platforms — which have proven “highly effective” as a better alternative to more traditional ICT project approaches. However, new thinking will be required to tap into these new paradigms.

“As the proverb goes, when you have a hammer, everything looks like a nail,” concluded Hodgkinson. “The Ombudsman’s report has highlighted that the hammer of major ICT-enabled projects is failing. While the faulty hammer needs to be mended, we also need to accept that there are many alternative ways to meet business needs which don’t necessarily require the hammer at all.”

There’s no doubt Victoria’s in a difficult spot. However, there is also no doubt that a way forward exists for the state when it comes to remediating its technology governance. Some positive thinking comes from international jurisdictions such as the US and UK, where governments are grappling with extremely similar issues to Australia’s states. And some thinking comes from within Australia, where the private sector has already conquered many of the same problems which Victoria is facing. Major ICT projects are increasingly running on schedule in the banking, retail and telecommunications sectors — industries the public sector could learn from.

Things may seem dire for Victoria’s public sector technologists at this juncture. But the illness can be addressed through a combination of emergency surgery and the long and patient application of the right techniques. Stay tuned for our next report shortly profiling the key players who will be responsible for administering the medicine.

news In an announcement yesterday, HP revealed that diversified local company Elders had signed it for a seven-year infrastructure and applications services agreement. Elders is a 172-year-old company incorporating the Elders rural services businesses and the automotive and forestry operations acquired and developed by Futuris Corporation.

According to the agreement, Elders will utilise cloud technology to deploy its enterprise technology refresh program – Project Connect. HP Enterprise Cloud Services will provide Elders with secure processing capacity and real-time data access that will enable the company to respond quickly to the changing business conditions intrinsic to agribusiness. This will help Elders to drive innovation by getting new services and products faster to the market, avoiding the typical protracted capital acquisition and systems deployment processes.

Shaun Hughes, Chief Information Officer, Elders Australia stated that outsourcing to HP was an integral part of the company’s transformation program. “HP’s cloud will provide us with a robust infrastructure and service delivery model that enables us to scale up for each of our program releases, and the applications methodologies and tools HP brings to the table enable us to de-risk the legacy development components of our build,” Hughes said.

In October, HP had announced new solutions and services based on HP Converged Infrastructure that would help businesses and service providers to efficiently deliver cloud services and to minimise risk, lower costs and leverage existing investments.

As part of a phased four-year program, Elders can utilise a combination of existing technology along with automated processes and procedures for application and infrastructure management and security. HP will also offer its full range of Technology Outsourcing services to modernise and refresh the technology environment. HP Data Centre Services, according to the vendor, will help to guarantee high accessibility to IT services and uninterrupted reliable operations. HP also will deliver Network Management Services to remotely manage and monitor Elders’ 540 distributed networks across Australia.

Additionally, HP will provide a set of Security Services, offering comprehensive security oversight of the managed environment in accordance with Elders’ security standards and policies. To plan for a cloud environment, HP will use HP Storage, ESL E-series Tape Libraries and HP BladeSystem servers to refresh Elders’ hardware.

HP will synchronise Elders’ technology infrastructure with the Information Technology Infrastructure Library (ITIL) Version 3 service management framework using products from its HP Software suite.

HP will also supply Workplace Services for all of Elders’ computing devices, including printers, handheld devices and desktop and notebook PCs. All of these infrastructure and applications services will be provided from HP global delivery centres in Australia and the Philippines, minimising risk for clients like Elders while offering them greater flexibility and cost efficiency.

Image credit: Timo Balk, royalty free

news Bruce Mills’ newly formed Outsourcing Council Asia Pacific (OCAP) has severely criticised the Queensland State Government’s appointment last week of Peter Grant as the new whole-of-government Chief Information Officer.

The decision to appoint a new CIO, who would report directly to the ICT Minister, had been announced in July by Premier Anna Bligh, with the successful candidate being revealed last week as well-known public sector ICT veteran Peter Grant, who previously held the same role from 2005 through 2008.

Calling QLD ICT Minister Simon Finn a “dinosaur” out of touch with the sector, OCAP Chairman Bruce Mills also said, “What the ICT Minister Simon Finn has announced is nothing short of a failed rerun as he is utterly devoid of any plan to get the ICT industry on track in Queensland.”

The minister has come under criticism for not taking responsibility for the whole-of-government disasters he has been in charge of. “Mr Finn has also confirmed he is more interested in jobs for mates to cover up a whole-of-government mess of which he first tried to gag advisory groups for raising the concerns and then planted his head firmly in the sand hoping it would all go away,” Mills charged.

Calling for the ICT minister to step down, Mills dubbed the appointment of Peter Grant a slap in the face to the industry, because of the level of his previous underperformance in the same role. “If the best that Mr Finn can produce for the ICT sector is recycling bureaucratic positions, then frankly given his record of presiding over whole-of-government debacles he should actually resign or the Premier should sack him,” he asserted.

The IT disasters to which Mills referred include the Queensland Health payroll debacle, which left thousands of public health workers with partial or even no pay for some periods after a botched department upgrade to a new SAP-based payroll system. Additionally, several of the state’s other major IT projects have exceeded their budget and suffered delays.

Mills felt that the Queensland ICT sector merited better than this “tired rerun” as it would not achieve anything for innovation in Queensland at a time when it is urgently needed.

Grant had formerly held the CIO role between 2005 and 2008, following a long career in the technology industry, including a brief spell as CIO of Queensland Health, three years as a consultant, and stints as vice president with the analyst firm Gartner and as Director of IT at Queensland transport. He held the position of state director for Microsoft from December 2007 for a little over a year.

The new CIO will be responsible for ICT program and project management, planning, and the implementation of Queensland’s overarching ‘Towards Q2’ technology strategy. The CIO will also oversee enterprise IT architecture, coordinate with the industry, and supervise the state’s problematic shared services policy.

Mills is a well-known and controversial figure in the Queendland IT industry. He is joint chief executive of 3W IT Consulting and Contracting and has recently been fighting a series of running battles with the Bligh Labor Government over what he sees as its inaction with respect to technology policy and policy implementation.

Image credit: Darren Kidd, royalty free

news Top tier bank Westpac has appointed one of Bob McKinnon’s top lieutenants, UK import Clive Whincup (pictured below), to succeed him as chief information officer.

McKinnon, who had led the bank’s technology operations for the past several years, stepped back into an advisory role last week, with his replacement slated to report to Westpac’s new chief operating officer John Arthur, rather than directly to the bank’s chief executive Gail Kelly as McKinnon had done.

Late tonight, Westpac issued a statement noting it had appointed Whincup, formerly the bank’s group general manager of service delivery in its technology division, as McKinnon’s replacement. The executive joined Westpac in May 2009 as part of a rush of key executives appointed as McKinnon’s inner circle. At that stage his title was general manager of service delivery applications, but he was promoted in November 2010. His new position will take effect from today (1 December).

Westpac’s statement noted that before joining Westpac, Whincup had been director of service delivery, group infrastructure and IT operations for Lloyds TSB UK. Before that he was CIO for Lloyds’ UK retail bank. He has 25 years’ experience in the IT and financial services sector, including at other banks such as the Bank of Scotland and the Banca Popolare de Milano in Italy.

“I am delighted to announce the appointment to CIO of such a high calibre member of our team,” said Arthur. “Clive has more than 25 years’ experience across IT and financial services, holding a number of senior roles at several global banks. His international experience and background in transformational change and complex programs of work position him ideally for this critical leadership role, and I very much look forward to working with him.”

At Westpac, Whincup appears to have had a substantial role in remediating the bank’s infrastructure over the past several years to cut down the number of ‘severity one’ incidents; outages for which there is no quick fix and which hamstring the bank’s ability to conduct its basic daily operations.

In a joint interview with McKinnon and a number of other senior Westpac IT executives last year, the executive spoke about the “currency” of Westpac’s IT systems — currency being a measurement of how the bank had continued to upgrade and maintain its IT systems over time. Over the years, Whincup said at the time, Westpac’s ability to introduce change into its business had become weak due to a lack of currency in its systems. One of Whincup’s roles appears to have been simplifying the bank’s underlying infrastructure. “The improvement is certainly noticeable,” he said at the time. “The sentiment in the organisation has dramatically changed in terms of how our systems work generally.”

And why did Whincup join Westpac to start with? Quoting from a Delimiter feature article on Westpac in late-2010:

Whincup says he’s worked in IT in banks for more than 25 years, including in the UK and continental Europe. “I don’t get invited to many parties,” he jokes. He says one of the things he gets asked a lot — even by his kids — is why he’s in Australia, and why with Westpac.

His answer is that he’s been in the middle of banking mergers before — and that from an IT side it was usually a case of “lift and insert” the larger bank’s systems into the smaller bank — destroying much customer value along the way. Westpac’s different, he says. “My belief is, the way the Westpac story is articulated, putting the customer at the centre of everything we do drives a focus on the long-term,” Whincup says.

opinion/analysis
I liked Whincup when I had an extended lunch briefing session with him and the rest of McKinnon’s senior leadership team a year and a month ago at Westpac HQ in Sydney’s CBD. The executive was clearly someone that McKinnon relied upon and trusted, and during the lunch he interjected at points and spoke with passion about the area (service delivery) which he was responsible for.

I wouldn’t describe Bob McKinnon as cynical, but the executive has a certain weathered feel about him. He’s taken virtually everything that the IT and financial services sectors have to offer and survived with the vast majority of his honour and integrity intact. Right now, he’s the five star general of Australia’s banking IT scene.

In comparison, I would describe Clive Whincup as a colonel; not as seasoned as McKinnon, but with the same core strength about him. Younger, with more passion, more vivacity about him; and perhaps more discipline — but less of McKinnon’s wry humour. While McKinnon’s been overseeing Westpac’s overarching strategy, it’s probably been Colonel Whincup who’s been keeping the troops on the straight and narrow and making sure things increasingly run like clockwork.

For me, two questions hang over Whincup’s immediate future with the bank.

The first is his relationship with Westpac chief technology officer Sarv Girn, who many saw as McKinnon’s defacto second in charge. Girn’s not pure management material like McKinnon and Whincup; he’s a tech-head. At the briefing last year, it was Whincup who was talking about cutting down severity one incidents, but Girn who would discuss specifics of banking IT architecture, cloud computing and core banking systems migrations.

Like many geeks, Girn’s got somewhat of an intriguing, slightly reclusive personality, which set him apart somewhat from the rest of McKinnon’s team. However, McKinnon and Girn appeared to have forged a special relationship which saw them balance out each other’s strengths and weaknesses. It’ll be critical for Whincup to develop a similar rapport with Westpac’s whizkid.

Secondly, Whincup will need to focus heavily on Westpac’s rapidly developing IT strategy over the next while. McKinnon’s nailed a lot of things down at the bank over the past several years, but major questions still hang over Westpac, ranging from the future of its core banking platform to how it will evolve its Internet and mobile banking operations to re-enter the mobile payments war emerging at the moment between CommBank (Ka-ching) and ANZ (goMoney).

All this will be going on in the context of the storm that will be continually breaking across his desk over the next several years as Westpac ramps up its IT outsourcing and offshoring initiatives. Those plans have already caused a bit of a ruckus within the bank, from what we’ve heard, and it will take all of Whincup’s skills and experience to keep things on an even keel.

I think the executive is more than capable of handling this side of things, and I have no doubt he can continue to take costs out of Westpac’s IT operation while maintaining a solid level of service delivery. But what worries me more is his ability to create and get buy-in for more visionary endeavours. I’m sure McKinnon’s continuing role at the bank will see him help out in this area, but it’s certainly the area Whincup’s skills will need to develop in.

Got some thoughts about Westpac? Drop us a line through our anonymous tips line. Even we won’t know who you are.

Image credit: Winam, Creative Commons, Clive Whincup (LinkedIn)

news The Queensland State Government has appointed a new whole of government chief information officer, with industry insiders naming former state CIO Peter Grant as the most likely candidate to have returned to the role.

The state has been looking for a new whole of government chief information officer since at least late July, when Premier Anna Bligh publicly flagged plans to hire a new executive for what is slated to be a drastically expanded role with powers to resolve the state government’s legion of technology headaches.

The State’s ICT Minister Simon Finn and Natalie MacDonald, the director-general of its Department of Public Works, were scheduled to meet with all staff in the state’s office of the Queensland Government CIO this afternoon to inform them of the appointment and confirm that the office would shift from the Public Works portfolio to sit within the Department of Premier and Cabinet.

The meeting was confirmed by multiple sources, but the identity of the new whole of government CIO is not as concrete, with one source noting they believed Grant had been appointed to the role. The State has not yet commented publicly on the appointment.

If Grant does take the role back, his appointment will come as somewhat of a surprise to the technology industry in the state. Grant previously held the role from 2005 through 2008, after a lengthy career in the technology industry that had included a short stint as the CIO of Queensland Health, three years as a consultant and other periods as a vice president with analyst firm Gartner and time as the Director of IT at Queensland Transport.

However, he exited the role unexpectedly in December 2007, accepting a role as the state director for software giant Microsoft. That role lasted little over a year; following that Grant has worked as a consultant for analyst firm Intelligent Business Research Services, as well as holding posts as a professor of Information Systems at the University of Queensland and the Queensland University of Technology. Grant’s list of projects worked on at IBRS is extensive and comprehensively detailed on his lengthy LinkedIn profile.

Queensland has had a succession of IT disasters over the past few years that have rocked the State Government. The most public of these has been the Queensland Health payroll debacle, which resulted in thousands of public sector health workers going without pay after the department’s upgrade to a new SAP-based payroll system was botched, but many of the state’s other major IT projects have also overrun their budget and been delayed.

The problems culminated in a landmark announcement by Premier Anna Bligh in July that the state would appoint a new CIO role to report directly to Minister Finn. The new role will also be the first CIO role in Australia to sit at a CEO level in the government hierarchy, effectively making them the equal of the heads of major government departments.

This “autonomy”, with the office of the CIO being an independent body, would leave to a heightened ability to drive outcomes, according to Bligh. And the new CIO would also provide regular advice to Cabinet — effectively, the highest level within the Queensland Government.

The new CIO would be responsible for a number of areas of government activity, Bligh said, ranging from ICT program and project management, planning, and the implementation of the state’s overarching ‘Towards Q2′ technology strategy. Also under the CIO’s remit would be enterprise IT architecture, liaising with the industry and even keeping an eye on the state’s troubled shared services policy.

opinion/analysis
If Grant is appointed to be Queensland’s new whole of government CIO, I personally feel very strongly that he will be the wrong choice for the job.

On paper, Grant will be perfect for the role. There probably is nobody with as much experience in Queensland Government IT as the executive, and he also has national experience, academic experience, vendor experience … the list rolls on. He’s a class act and one of Australia’s top CIOs by any measure.

However, it bears a great deal of consideration that many of the IT disasters which have occurred within the Queensland State Government had their seeds sewn under Grant’s previous watch the last time he was State Government CIO. New powers or no, I feel strongly that Grant will not have the energy, grit and ‘push’ to shove through the sorts of reforms which Queensland so strongly needs right now. He will bring too much baggage from the past; and I also feel his Gartner and academic experience will perhaps not serve him well in what will necessarily be an intensely hands-on, departmental in-fighting warrior kind of role.

For this kind of job you need a demon vigilante who never rests. A consultancy style will not serve anyone in this job; you will need to knock heads together, break down doors and broadly take no prisoners of any kind.

Beyond this issue, of course, there is the fact that it is unlikely that anybody could be truly successful in this role.

As we’ve seen in Queensland, Victoria and NSW over the past half-decade, it has been conclusively shown that whole of government “super-CIOs” do not have the ability to enact the levels of change that they have been appointed to enact in Australian governments, as they are constantly mired by the lack of authority to gainsay departmental heads and strangled by systemic cultures of poor governance and a lack of accountability.

Even if Queensland’s new CIO does have equal status with the heads of the departments of education, transport, health and whatever else, that does not mean that they will be able to gainsay those executives; and still less will they be able to control what happens in the multiple layers of bureaucracy under them.

I’m sorry to be cynical, but I’ve been following Queensland’s rolling series of IT disasters for half a decade now. I personally (with fellow Fairfax Business Media writer Agnes King) broke the news that Grant was quitting to join Microsoft, four years ago. Not much has changed in the Queensland State Government in the meantime when it comes to technology … apart from the fact that, thanks to a damning series of audit reports, we now know just how bad things are. They’re probably as bad as they are in Victoria.

Image credit: Jamie Woods, royalty free