Can agency-led innovation help transcend failing
Whole of Government ICT strategies?



blog It’s been a fascinating decade or so in Australian Government in terms of centralised ICT strategy. If we were to go back a decade or so, centralised whole of government chief information officers were all the rage. New South Wales had one, Victoria had one, South Australia had one Queensland was setting up one, and while the other states and territories weren’t quite as formal, they did have centralised IT shared services divisions which fulfilled much of the same function.

Fast forward five to seven years and all of this has changed. Victoria dumped its whole of government CIO office and replaced it, years later, with a “chief technology advocate”. New South Wales dumped its independent whole of government CIO role and merged it (on paper) with the role of one of its departmental director-generals. Queensland has just asked its whole of government CIO to step down. The Federal Government has broken up its IT strategy agency AGIMO and integrated it further into the Department of Finance and Deregulation. And across the country, IT shared services initiatives are being wound back.

According to Ovum research director Steve Hodgkinson (director of the firm’s government practice in Australia and New Zealand, and a former deputy CIO of the Victorian Government), there are lessons to be learnt from this situation. Hodgkinson notes in a recent blog post (we recommend you click here for the full article):

“The decentralized organizational dynamics of most public sectors, however, have largely frustrated WoG ICT strategies; there are few successes to report amid a growing list of wasteful failures and disappointing projects. Many jurisdictions have discovered that their consolidation, rationalization, and standardization strategies have saddled agencies with outdated, inflexible, and costly ICT capabilities – the opposite of what was intended.”

The next logical step following on from the difficulties suffered by whole of government ICT strategies, according to Hodgkinson, is to pursue a “just enough” whole of government ICT strategy, focused around key areas, while enabling innovation with the new cluster of mobile, social media and cloud computing technologies which are now readily available. The analyst writes:

“This is a much easier and less risky path to take than attempting to achieve the same outcome via mandated strategies that effectively seek to create closed, under-invested, “socialist” ICT economies within a jurisdiction. Mobile apps and cloud services work because they operate in an open capitalist economy in which customers choose services that are better, faster, less expensive, and less risky to implement and operate. History has shown that capitalism, for all its faults, always triumphs over socialism, because it stimulates the energy of customer choice and the vendor accountability necessary to drive innovation.”

I wholly agree with Hodgkinson. What we’re seeing increasingly on the ground in governments right around Australia is that there are certain aspects of government ICT operations that make sense to be delivered centrally. A good example would be the creation of procurement panels for common use areas such as Microsoft licences and telecommunciations, which everyone needs, and for which there are only a limited number of suppliers. Concentrating on these areas allows governments to cut costs through centralised procurement; but these kinds of efforts do not constrain individual departments and agencies into solutions which they don’t want.

Then, in turn, what we’ve seen in a number of government arenas in Australia is that when individual departments and agencies are freed up and encouraged to pursue innovation, learnings from that innovation tend to percolate through the rest of their sister agencies. In Victoria, we’ve seen how the Department of Business and Innovation is pushing the envelope and attracting notice through its new IaaS tender, following on from a successful implementation. And in NSW, the Department of Trade and Investment is breaking new ground and setting the example with respect to its cloud-based SAP ERP project.

Hodgkinson’s right — the power resides in the agencies, so they should be encouraged to experiment, learn and share those learnings, rather than mandated them into solutions that may not fit.

Of course, much of the concept Hodgkinson is writing about here is positive, looking forward. However, personally, one of the key roles which I would also very much like to see centralised government IT strategy groups play is in becoming advocates for good project governance. Right now, project management and project governance is a key issue across Australia’s public sector, with most major ICT projects going off the rails and off budget to some extent. In some cases, such as in Queensland Health, projects have gone catastrophically off the rails.

I’d like to see whole of government CIOs act, not so much as watchdogs, but as advocates and educators in terms of good project governance — perhaps having staff seconded onto major ICT projects in individual departments, in order to both keep an eye on the situation, while also helping to establish and train project offices. This already happens to a certain extent, but I’d like to see more of a formal emphasis placed on it. That way, when innovative projects come up in government, there is more in the way of structures and frameworks to help them deliver. And having more such staff around might also help the lessons learnt to percolate between departments.


  1. I always though “WoG” was a bit of an over-reach.

    Any large organisation is going to have many varied IT usage cases, and trying to shoehorn them all into a “One size fits all” box is just going to break actual business methods of the organisation.

  2. I see a place for whole of Government strategies for how the public should interact with Government, like co-ordinating authentication across Government agencies websites, IPv6 support, the recent Federal Govt “mobile roadmap” etc. These are actual strategies which could improve Governments’ service to the public.
    The centralised shared services idea was merely a money-saving measure within the particular government, with the usual problems of one-size-fits-all solutions.
    A large uniform solution is cheaper to provide but imposes more cost on the users as they work inefficiently to work around or compensate for the poor fit between their requirements and what is provided.

    • Yes – some things make sense at a WoG level when they provide genuinely useful procurement arrangements, infrastructure solutions or building blocks which agencies value. The problem, however, is that governments comprise very diverse portfolios of agencies, so it is very challenging to meet diverse needs with a single WoG solution. In the end, beauty is in the eyes of the agency beholder [like it or not].

      Cloud services are a very interesting development in this arena because they actually do solve the same problem at massive scale. How, for example, is a company like AWS, Google or Salesforce able to provide a common standardized solution which meets the diverse needs of hundreds of thousands of different organizations? The reason is because the service offering was designed from the outset to be shared – standardized but to some degree configurable – and the customers have purchased it voluntarily on this basis.

      The cloud services model is based on the premise that services that work (cloudy is as cloudy does) are consumed voluntarily by customers that are intelligent consumers of shared services (it takes two to tango). This common sense capitalist market dynamic is very hard to create and sustain within government.

      If you wave a magic wand it would be great to deploy the same logic at WoG level. Imagine if there was a WoG government-owned and operated equivalent of Google Apps or Microsoft Office 365 running to provide the office productivity platform for an entire jurisdiction (just for example – you could use any SaaS application to illustrate this point). This would obviously be of benefit if it was possible … but the reality is that we don’t have a magic wand. Such a project would be a high cost, high risk fiasco due to the well understood governance and organizational dynamics of the public sector. The act of bringing the SaaS app inside a closed socialist ICT economy within government would destroy the open capitalist market ethos that created and sustains it.

      The better way forward is simply for agencies to get on and use digital services provided by the market because (to them) the services are better, faster, less costly and (overall) less risky.

      The challenge this raises, however, is the danger of fragmentation, duplication, chaos, silos of data etc. (like we have today). The game though is changing because cloud services are founded on web services and APIs which are increasingly enabling inter-operable ecosystems. [This is not yet perfect of course, but the direction of travel is clear]. It is no longer as necessary as it once was that agencies use common applications in order to inter-operate. [This indeed is the foundation logic of the services oriented architecture at the core of cloud/web services].

      The way to tackle these is for the WoG ICT strategy to focus on ADDING VALUE to agency-by-agency innovation by things like: setting a compelling vision; empowering agencies to act; showcasing success stories; sharing lessons learned and embeding them in pragmatic policy, and; establishing a service catalog of useful solutions that have been road-tested by agencies.

      You might also add some centrally provided WoG services for single sign-on, inter-operability and security … but only if they genuinely work and genuinely add value in the eyes of agencies.

      At the end of the day this is all about admiring the accelerating pace of innovation in digital services and working out how to also accelerate the pace of technology enabled innovation in agencies. If WoG ICT strategy can do this then good. If not it should just get the heck out of the way.

  3. I agree with Steve’s comment that “The problem, however, is that governments comprise very diverse portfolios of agencies, so it is very challenging to meet diverse needs with a single WoG solution.”

    It’s more than a challenge, it is nigh on impossible, certainly at the Federal level.

    Anyone who suggests that the business of government departments leads to the same sort of ICT solutions is sadly misinformed. Do you suppose that agencies like DFAT, ASIO, Attorney General and Defence have the same security needs as agencies like DCBDE, DEEWR, and the Department of Industry, Innovation & etc?

    Do you suppose that agencies like Centrelink and Medicare have the same transaction processing needs as PM&C, Finance and Treasury?

    Do you suppose that the Mint has the same ICT needs as any other government agency? The Mint makes coins. It is a manufacturing plant. The only other similar ICT shop is probably run by another national government.

    AGIMO undertook a study of the 50 smallest FMA agencies looking for opportunities for shared services and/or cloud solutions. Declaration: – I was involved with this study. The expectation was that they were all small policy agencies and didn’t have unique needs. The evidence proved exactly the opposite. Just because an agency is small doesn’t mean it doesn’t have different requirements.

    If agencies have the same business needs then by all means they should be encouraged to share ICT. This already happens with a number of portfolio agencies. If an agency has unique business needs then it makes a lot of sense for that agency to develop its own solutions for those needs and then use that platform for the more standard solutions such as admin and HR. Multiple ICT environments, whether with other government departments, with outsourcers or with cloud service providers comes at a co-ordination and support cost. Just because another technology solution is touted as “better” does not make it appropriate for a government department to adopt.

    Solutions should be business driven, not by vendors and consultants anxious to prove that they know more about government than the government. Government agencies will adopt new and standard solutions when those solutions deliver on their particular business needs.

    However I do not agree with Steve’s statement: “The way to tackle these is for the WoG ICT strategy to focus on ADDING VALUE”

    ICT does not add value, it costs money. Value comes from the business problem that the ICT helps solve.

    • Hi Bernard, hmmm … I suppose ‘value’ is in the eye of the beholder. The point I suppose is that a WoG ICT strategy must improve the ability of agencies to deliver their business outcomes … either by reducing their ICT costs or enabling access to ICT enablers not otherwise within reach.

      The problem with many WoG ICT strategies is that their ‘value’ is usually assessed at the ephemeral WoG level not in terms that individual agencies can see, smell, feel or eat. Remember the promised reinvestment of savings from the Gershon Review? etc. blah blah …

  4. Steve,

    re “I suppose ‘value’ is in the eye of the beholder.” I agree totally. However, the beholder, in this case, has to be the business. If there is no business value in any or all of the ICT, then why spend the money?

    and “The problem with many WoG ICT strategies is that their ‘value’ is usually assessed at the ephemeral WoG level not in terms that individual agencies can see, smell, feel or eat. Remember the promised reinvestment of savings from the Gershon Review? etc. blah blah …”

    There is a “value” to the government as a whole, if the total ICT cost reduces. And total government ICT cost is more than ephemeral.

    However, no one has WoG responsibility for either delivering government outcomes or delivering WoG ICT. The constitution gives authority and responsibility to ministers, not to governments. That shapes the behaviour of the organisation.

    IMHO, separation of powers, division of responsibility, avoidance of conflict of interest and such are all far more important democratic issues than marginally improved ICT cost effectiveness.

    • Exactly Bernard. The WoG ICT strategy game too often turns out not to be worth the candle in the face of these “important democratic issues” … and also the fact that the side effects of the WoG medicine manytimes turn out to be more vexatious than the original malady. Fortunately more modern treatments are at hand …

      • The biggest issue with WoG strategies, is they tend to be too fine grained. They try to control IT in all governmental departments down to what software they run on each and every desktop, how it should be used, why, etc, etc, etc.

        The real value of a WoG should be more in support (rather than “Overall strategic direction”) and taken from organisations like CAUDIT (Council of Australian University Directors of Information Technology). CAUDIT allows Universities access to software at a reasonable price, but leaves implementation/usage to them. This allows each Uni to be flexible and allows innovation (something lacking from a lot of Government departments).

        It’s not perfect, but it is a value add system. This is also why I think off shoring/outsourcing is detrimental to any organisation (Government, University, Private enterprise). If you farm out the corporate skills/memory/experience you just don’t get the same input that an external member of the organisation would/could have.

        Outsourcing is fine when your executive know what they are doing, but you need in experienced people “in house” to keep them aligned with the business priorities. There have been too many cases lately there the business case for the introduction of certain projects would actually have been better as “do nothing” rather than what’s been attempted to be brought in.

      • and also the fact that the side effects of the WoG medicine manytimes turn out to be more vexatious than the original malady.

        Just thought I should add I agree entirely with that. WoG is fine if they leave the “local” stuff to experienced people “on the ground”, it’s when they try and force a “one size for all” approach that things come undone.

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