news The Queensland State Government has revealed plans to engage in a comprehensive IT outsourcing exercise involving its statewide health department, in the newest plank in its strategy to overhaul Queensland Health’s extremely troubled IT support systems and processes.
Queensland Health is one of Australia’s largest organisations, with some 80,000 staff and operations right across the state, including 182 public hospitals and a wide range of other facilities. Its IT needs are currently largely met by Queensland’s Health Services Information Agency (HSIA) — a specialised department dedicated to keeping Queensland Health’s IT operations running.
And those IT operations are substantial. According to documentation issued by Queensland Health this morning, HSIA currently managed over 81,000 email accounts, 1,100 BlackBerry and other smartphone devices, over 59,000 computing devices such as PCs and laptops, over 1,500 networked servers, over 369 telephone systems including over 90,000 handsets, about 12,000 mobile handsets and 5,860 short range pagers. It also maintains 100 enterprise applications and about 900 local applications.
However, the department has recently been rocked by a series of problems with respect to its technology operations. Although vendors such as IBM and other divisions within the Queensland Government shared some of the blame, audit reports have made clear that Queensland Health did not apply sufficient project governance to its botched payroll systems upgrade, which is slated to cost the State Government some $1.2 billion. In addition, a number of other systems within Queensland Health are out of date and need replacing, a phenomenon which the state government is seeing across its operations.
For example, the State Government’s first comprehensive ICT Audit of its operations, published in June, found at the time that ninety percent of the Queensland Government’s ICT systems are outdated and will require replacement within five years at a total cost of $7.4 billion. Because of these issues, the state has moved towards comprehensive IT outsourcing programs and adoption of cloud computing technologies across government, in an effort to modernise its systems and improve basic IT service delivery.
Queensland Health this morning issued two early market engagement briefing documents outlining a wide range of IT services which it would shortly seek to outsource to external providers. It notes HSIA is to become more of a broker of services to Queensland Health, rather than retaining its role as an independent service provider: “The HSIA ICT Reform Program was established to implement the government’s program of transitioning HSIA from an ICT service provider to a managing agent providing a range of ICT from internal and external providers.”
The first tranche of services the department is seeking to outsource relates to telecommunications services, with Queensland Health seeking to contract the provision and support of telephony, paging and messaging systems out to the private sector, and to purchase these capabilities “as a service”.
In this contract, the department is seeking to consolidate various providers into “one strategic supplier of voice, paging and messaging solution[s]”, as well as transitioning its current environment to a Unified Communications platform. In scope for the contract are virtually all telecommunications systems, ranging from normal PBX telephone systems, IP telephony systems, smartphones, other mobile services and paging and messaging services.
The second contract, dubbed the ‘Health Workspace Project’, is largely focused on end user computing devices, such as PCs and laptops, although a range of other services and devices are also in scope; ranging from printer support, mobile device management, virtual desktop infrastructure, email (Microsoft Exchange), collaboration tools (SharePoint), document and records management (HP TRIM), cloud file storage and Microsoft Office support.
In this area, Queensland Health want to improve the satisfaction of its staff in using their workplace tools, while also increasing its mobile capability, provide a modern integrated office suite and electronic record and document management platform, drive efficiency in how it supports its end user platforms, and reduce the time it takes to offer new and existing desktop and collaborative tools and services; reducing “technology obsolescence” and simplifying technology refreshes.
The two early engagement briefings are just the first in a wide tranche of IT services Queensland Health plans to outsource, according to the department’s tender documents.
However, at least one major vendor will be prohibited from competing for the new IT outsourcing contracts. In early August, the Queensland Government explicitly banned its departments and agencies from entering into any new contracts with diversified IT products and services company IBM until the company demonstrated that it had improved its governance and contracting practices, in an extraordinary move taking place in the wake of the Queensland Health payroll disaster which IBM held a key role in.
I have to say, the tender documents which Queensland Health published this week are highly unusual, in my experience.
Firstly, despite the fact that HSIA is a very sophisticated organisation, supporting many, many large IT systems and basic IT and telecommunications infrastructure, the documents it issued to the market this week lack virtually any detail and are very brief. They are literally designed to get the right vendors into the room for early briefings so that early discussions can be held before more formal tender processes. This doesn’t usually happen quite like this: Normally large departments such as Queensland Health start from a more sophisticated basis.
What this indicates is that Queensland’s political masters have thrust this IT outsourcing issue on HSIA and Queensland Health quite quickly. It’s a similar case with the NSW Government’s cloud computing trials — the politicians obviously want to get this ball moving fast.
Perhaps because of this, the way the contracts have been set up doesn’t necessarily make much sense. In each case, it seems unlikely that these IT outsourcing needs would be best served by a singular supplier. In the telecommunications case, it would really only be Telstra or Optus that would be able to meet all of the department’s telecommunications needs. In the ‘Health Workspace’ area, again it seems unlikely that the contract would be best served by a single supplier. If I was running the contract, I would be much more likely to hive bits such as the email support off to separate suppliers, and probably the same for things such as printer support.
When you have really good project governance, as with large Federal Government departments such as Tax or Defence, it is sometimes easier to sign larger contracts with vendors to do more.
However, when it comes to Queensland Health, whose project governance skills are demonstrably terrible, if it was me organising these contracts, I would try and parcel them off in small, discrete bits to individual vendors. That way, if one vendor screws up mobile device management, for example, the rest of the services being provided aren’t also going to get screwed up. Firewalling off discrete parcels of services this way, in my opinion, would be the best way Queensland Health could try to avoid project governance issues in its IT outsourcing.
There are parallels here from the Federal Government’s own IT outsourcing initiatives. In many cases, back a decade ago, many departments signed huge, centralised IT outsourcing initiatives because they were ‘first-generation’ outsourcers. Now, those deals tend to be broken up into packets — such as end user computing, telecommunications, centralised datacentre processing, corporate apps and so on — as the IT outsourcing market has matured. Queensland Health is obviously doing this too, but given its ongoing problems, I would probably recommend breaking up things a little further as well.
For example, you could get Telstra to set up Queensland Health’s unified telecommunications environment as well as providing carriage services. But a dedicated integrator like Dimension Data is probably going to do a better job of that specific task. You could get the same company to do MDM, desktop and printer support, for example, but given the scale of Queensland Health, would you really want to? Probably not.
In any case, it will be interesting to see how Queensland Health’s IT outsourcing effort progresses. These will be some of the largest and most complex IT outsourcing deals signed in Australia over the next several years. Let’s hope HSIA and the department don’t screw them up.