Enterprise IT, Featured, News - Wednesday, May 22, 2013 16:02 - 0 Comments

Victoria abandons IT shared services?
Core CenITex services to be outsourced

news Dramatic internal documents leaked from CenITex this week have revealed that the Victorian State Government plans to turn the IT shared services agency into a ‘broker’, rather than a provider of services, and that the Government is considering outsourcing massive chunks of CenITex’s work.

The troubled agency’s future has been in a cloud over the past year, with the Victorian Government putting CenITex’s formal status on ice pending a number of investigations into its future. Following a series of troubling reports into its ability to deliver IT services to client agencies in the state, and audit reports finding “nepotism and favouritism” in the company’s contractual processes. It has also gone through major redundancy rounds, sacking 200 staff in one event in May last year, for example.

Yesterday Melissa Fyfe, a journalist with the investigations unit of Melbourne newspaper The Age, published an extensive document which appeared to be a PowerPoint presentation by CenITex chief executive Michael Vanderheide to an all staff forum held by the agency on Monday this week. In the document, Vanderheide noted that CenITex was to undergo a significant shift in its mission, from being a pure provider of IT services to a number of Victorian Government agencies to becoming a broker of third-party services.

In the document, Vanderheide noted that evidence supported approaching the private sector to provide services in four key areas currently being provided by CenITex: Hosting, storage, network and desktop services. All of these areas are generally considered by the IT industry to be so-called ‘commodity’ IT services, in that they represent standardised infrastructure services that almost any medium or large organisation would purchase in a similar fashion.

For example, in the private sector, IT services companies such as Fujitsu and Unisys already supply desktop services to a number of government agencies, while firms such as Dimension Data have long been known to provide standardised services around network administration.

The document noted that CenITex had identified “significant potential savings” from shifting this kind of work to the private sector. A review of CenITex’s capability had found that lower costs on the private sector’s side were driven by factors which CenITex itself couldn’t easily replicate internally — such as the availability and uptake of new technologies such as cloud computing, access to labour, service levels and standardisation. Continue…