Looming election revives debate on federal IT outsourcing
A change of government at federal level might not necessarily mean more IT outsourcing by government agencies, according to the country’s top chief information officer.
Glenn Archer, CIO of the Australian Government Information Management Office (AGIMO) said while recent reports had suggested a Coalition government told the industry it might outsource more of the government’s $6 billion a year IT needs, he is ‘‘entirely ignorant of any such pact’’. The Coalition has made no policy announcements on the topic to date.
Already between 19 and 22per cent of federal IT spending goes to three outsourcers in Australia. Unless the government of the day made specific changes that forced agencies to outsource more, it would depend on individual agency needs and CIO decisions, he said.
Yet, there is a precedent of forced outsourcing in a tumultuous IT era that began in 1997 and that many Canberra technology leaders still resent. Then, the Howard government announced a Whole-of-Government Information Technology Infrastructure Consolidation and Outsourcing Initiative headed by a new agency, the Office of Asset Sales and Information Technology Outsourcing (OASITO).
The original outsourcing plan was to be completed by 1999, but only four of the 11 major planned tenders were completed by that date. A scathing report by the Auditor-General in 2000 was quickly followed by the Humphry review and a Senate inquiry, all similarly critical.
Former ASX head Richard Humphry said at the time that while the initiative had established IT outsourcing in Australia, its continuation should be re-examined as it was not proving effective.
The approach was eventually dropped and OASITO closed.
‘‘I would look at the Humphry report and ask what has changed since 2000,’’ Archer told IT Pro.
“In my view, the only thing substantial is the appearance of cloud as a way of technically outsourcing your IT needs in a way that can quite radically speed up establishing a service or achieve a lower cost.”
Government agencies outsource across all types of IT functions and technologies and companies like IBM, HP, CSC, Unisys, Telstra, Datacom, UXC, Accenture, Lockheed Martin and many others have benefited.
IT offshoring, however, is far less prevalent among federal government agencies due to procurement rules and guidelines by Defence Signal Directorate information security manual – not necessarily because agency CIOs don’t see the value.
Yet, the government has recently updated its cloud approach in line with its enthusiasm for the service delivery model.
Mr Archer said larger departments were also providing more outsourcing services to smaller ones and that outsourcing didn’t suit every agency.
“In many ways the nature of the policies that have developed in the last 50 years in the social welfare arena have been often carefully crafted around the needs of particular groups of citizens or communities,” he said. “So you do find application development is highly customised around that particular area. So trying to leverage the business process expertise or applications expertise of a commercial provider, often just doesn’t make sense. There isn’t a kind of a ‘one size fits all’ solution here.