NSW Govt may scrap IT shared services units


blog According to the Financial Review, the New South Wales Government has indicated it may follow in the footsteps of fellow states Queensland and Western Australia and drastically re-work its IT shared services strategy, in the wake of questionable benefits having flowed from the scheme.

It’s never been a very transparent strategy — and the previous Labor Government in NSW definitely didn’t enjoy answering questions on the matter — but for several years now the state has focused on delivering IT services to a number of agencies through several shared services divisions, including ServiceFirst, which was quietly created from the mergers of a number of agencies in 2008, BusinessLink and one or two others. However, the Financial Review revealed this morning in an extensive interview with NSW Finance Minister Greg Pearce (click here for the full article) that the IT shared services strategy may be changing dramatically — and soon. According to the AFR, Pearce said:

“What we’ve done is essentially stopped a lot of the shared services work that was going on,” he said. “We’re looking very hard at BusinessLink and ServiceFirst and whether we should be in that business at all or how to get value if we stay.”

As you may recall, on Delimiter I have argued very strongly that IT shared services models in Australian governments are fundamentally broken and need to evolve. From Victoria to Queensland and of course Western Australia, Australian states have comprehensively proven by now that the IT shared services model as it is currently understood simply does not work well in Australia. The evidence for this is contained in a series of audit reports issued by the various state auditor-generals over the past half-decade. They literally document five years of disasters in the space.

If the NSW Government walks away from the IT shared services model it will be the third Australian state government to do so in a year, following similar moves by Western Australia and Queensland. In addition, Victoria’s own model is similarly in question. I hardly need to go into the problems which have been suffered by its IT shared services agency CenITex at this point — they are already legend within Australia’s IT industry. Perhaps the only state government which has appear to be relatively successful at IT shared services is the Australian Capital Territory with its InTACT unit. But … we haven’t heard much from the ACT in this area in a while. Perhaps the house is burning down there too.

I actually don’t have a great deal of confidence that NSW’s new Coalition State Government can pull the state out of its deep hole when it comes to delivering IT projects. So far, every indication has been that the O’Farrell Government understands this area as little as the previous Labor governments. But I suppose one can hope. Hope may just be the only thing which public sector IT workers have left at this point.

Image credit: Zsuzsanna Kilian, royalty free


  1. It shared services has meant the a significant increased cost for innovation in service delivery and a blow to a struggling productivity engine.

  2. Shared Service models are too big and cumbersome. They limit departmental productivity through standardisation that further limits creativity, productivity, and operatability. Service First and Business Link, great idea on paper. Service levels have probably plummeted though, like service from any large department or company.

  3. Shared services models are great for the power brokers and empire builders in NSW Govt departments. NSW Health is a prime example of this. Millions of $$$ being poured down the gurgler with little to no benefits. Just more expensive services.

    Hey, I’m an IT contractor and I’m cleaning up on this gravy train, so I shouldn’t complain too much!

  4. That’d be fine if Finance were holding the reins, but it’s Treasury and DPC who are calling the shots. It’s all very well for a politician to act as a talking head, but the fact is that the petty bureaucrats are the ones pushing their agenda. It’s no secret that ServiceFirst and BusinessLink are utterly hopeless, but there is no agenda to set the bar high for ICT. Rather, the beancounters and spindoctors want to set it to lowest common denominator, and none of those involved have the first idea about what they’re doing.

    What’s happened is that they’ve realised that the expenditure to “fix” ServiceFirst and BusinessLink to suit their agendas is never going to fly. These are the programs that have been suspended. NSW doesn’t have any answer on how to effectively deliver ICT. There are so many issues with the governance in place that they wouldn’t have the first clue on who to ask and what direction to set. And so the task falls to the least suited people in government, who really just want their own little empires to manage.

    The only clear answer that one can derive from this is that there is no good reason to work in ICT within the NSW Government.

  5. All I have to say, the shared providers have done this to themselves. They really do not know how to provide a shared service across agencies and ensure a supportive company is in place. Undisclosed, I have witnessed certain “shared service companies” purchase and spend millions of dollars in systems that are poorly planned and designed, thus wasting money down drains due to state wide systematic errors.

    It is sad really, because the CIO of IT, the CEO of the company should be held accountable for direction and purpose, and to any of you that think outsourcing the shared service, duplicating costs to vendors is simply irresponsible and desperate.
    Everyone should take example of IBM with supporting staff, infrastructure, SLA and system design. No one ever models around successful vendors. It is sad really, because shared services can work, if properly planned.

Comments are closed.