Govt ICT review to focus on productivity gains

Exact picture of state IT spend uncertain

While the State Services Commission acknowledges it doesn’t have a “good assessment” of the overall government spend on IT, it has stopped short of demanding a detailed analysis from all agencies because the job would simply be too large.

“However opportunities will he identified to approach agencies and discuss particular experiences,” say the terms of reference for the recently-announced expenditure review.

The review is one of ten aimed at reducing overall government expenditure, of which ICT acquisition and operation form a significant part.

The emphasis will be on encouraging developments that will improve productivity in government agencies. Improved productivity is defined as “being able to reduce costs or obtain more cost-effective results”. This, in turn, is expected to have a material effect on the overall economy.

The terms of reference drop several hints that more cross-agency and all-of-government initiatives might be one way of reducing the ICT budget. The document points to some successes, including the Microsoft licensing agreements. The latest of these, dubbed G2006, has just been concluded.

The document also refers to past initiatives, such as shared services, considered in a “scoping study” in 2001, which were recommended against. There was also the notorious GoProcure initiative — an all-of-government centralised procurement initiative. While GoProcure itself collapsed, it directed government to the advantages of “syndicated procurement”, so is viewed as a partial success.

Current all-of-government projects, such as the Government Shared Network, and a uniform approach to online authentication, are also cited. However, the benefits of these have not been quantified, as yet says the SSC.

However, the traditional freedom of departmental chief executives to make their own decisions regarding ICT expenditure has sometimes led to undue pressure being applied to the ICT industry, says the SSC.

“Too many new large projects being implemented at once can stretch the capacity of the ICT industry and, therefore, increase costs,” it says. There may be benefits in government adopting a portfolio approach to ICT investments.

The suggested approach for the expenditure review would start by “[developing] an assessment of the broad scale and nature of current government ICT spending and projected future changes,” rather than asking each agency and simply adding up the figures. Instead, the estimate would be based on information the SSC has collected and compared with information available from other sources, such as Treasury, the MED, Statistics NZ and the ICT industry.

The report also calls for a review of “sample government ICT developments” and an assessment of their results, including “what productivity gains were achieved or not achieved and whether this is applicable to other initiatives.”

International experience with ICT investments will also be canvassed. From there, the review exercise will “develop options for central agency actions that can influence this spending.”

“These range from policy; working collaboratively; considering how government can manage a portfolio of investments in ICT, and looking at new funding options through to oversight of the direction on specific areas of ICT spending.” This could be seen as a tentative approach to centralised influence without the centralised control of the 1980s.

The review is expected to be finalised by mid-September.

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