Andy Macdonald:
Well thank you very much and I would like to thank the
National Press Club for inviting me to be the lead speaker on your new IT
Forum. I think the fact that there is an IT Forum is just yet another
indication of the fact that Information Technology is really, pervading every
aspect of our life - whether it is at home or at work and I am very honoured to
be the first speaker in this new group.
What I thought I’d do today if you’ll permit me, is sort of give you a one year progress report. It has been about a year since OGIT has been created and about a year since I have been here, and so I thought I’d do a bit of a retrospective - if you will, of what has been going on and then I’ll end up with the most recent Budget and what has been going on in that and give you some additional words in that area.
I guess if I had to give you an overall summary, I think what I’d say is that we’ve made a good start on a number of key areas, that we’ve established some good links with a number of departments on many initiatives that cut across the whole of government - the enterprise white type initiatives - we haven’t got absolute agreement with everything, but by and large we have had very good support from Departments and I think the challenge for us in this next year is to deliver. To deliver the savings, to deliver the projects to the Departments that provide the information and services to Australians.
Now, when I was brought here a year ago, one of the early things I was asked to do was to create an IT strategic plan and I think many of you have heard me talk about the fact that I think that IT strategic plans do not exist in isolation from the corporate plan and the Government’s current service delivery corporate plan - if you will - is that every Department has a separate channel of distribution for all of its kinds everywhere in the country and the IT strategy supports that. But, there is another paradigm out there, and I have been doing my best to promote it, and certainly we put it into a number of the documents that we have put out - and that’s the paradigm of the focus on the client through a single window - a one-stop shop, a store-front shop - or, there are a variety of names, none of which are totally accurate. But the whole concept of providing to a particular client group a reasonable range of services appropriate to that client group, at an access point that that client group would be expected to be at, is to my mind, the service delivery strategy of the future. It provides seamless access to government services on the part of the client, for that range of services that we can cost-effectively afford to provide. Now, it is emerging in the private sector, increasingly you can get broader access to a range of services - you don’t have to go from A to B in financial institutions any more. It’s inevitable in the public sector. It’s driven by a couple of factors in my view. The first one is - it is driven by budgets, because the separate channel of distribution supported by IT is a very expensive proposition to maintain and ,increasingly not only in Australia, but world-wide, this is becoming less and less affordable and secondly, as the clients get more experience in receiving this sort of service in the private sector, they will increasingly turn to Government and say “Why can I not get the same service from you? Why do I have to know how you organise yourself internally for me to get services from you. I don’t care how you organise yourself internally. All I know is that I have a certain service need and I expect to have it met and I shouldn’t have to go from A to B to C to D in order to get a range of services that meet my needs.”
So that is the challenge for us and the challenge for technology, of course, is to support that new paradigm. And that is why I was really delighted in the Budget to see the announcement of this new DEETYA, DSS and Health and Family Services storefront shop. That is the first really large major initiative in this single window. It is focused on a number of client groups - families, the aged, students, aboriginal and Torres Straight Islanders, the unemployed, sole parents and people with disabilities. And it covers a number of functions - registration and assessment, automated job search, payments for Austudy income support processing and the like - and this is just the core and this is just the beginning. I think that we will progressively provide for more streamlined and more rationalised delivery of service with fewer forms and more rapid turnaround - faster decisions - to a broader and broader body of people who are in that particular target group. It is going to be based on the DSS existing service delivery infrastructure - it will be supported by their infrastructure - the telecentres and the DEETYA job kiosks - and they are predicting a launch date of September of ‘97. And in my view, this is an excellent start to the single window concept. It is program driven, it is client focused. Better customer service at a lower cost is indeed the whole focus of this. It is a WIN-WIN situation for both the clients and the providers of the service, and it is clearly IT enabled. And, progressively, as other Government Department’s find services - there is an expectation that they will be able to provide services through that service delivery point as well. One might even conceivably in the future, see State Governments there.
Well in terms of what that means for the Commonwealth IT community - it’s basically very good example of technology enabled business process re-engineering with a strong focus on client service and greater efficiency and service delivery. My prediction is that it will provide a real focus on information - how it is captured and managed, and in the final analysis, that’s what it is all about. It isn’t the technology per se - it is the information that is produced by the technology and what we do with it. It will demand enhanced connectivity across multiple architectures and departments and agencies that participate in that and I think that this will aid us in the progressive rationalisation of our platforms. And finally it will give us an opportunity to work on that common look and feel, so that clients, when they are interacting with the Federal Government, will deal with a common interface for an increasingly wider range of services. So it is starting to emerge. I think it is a good thing. I am delighted to see it and I hope that the clients of this group feel the same.
OK. Let’s talk a little bit about the strategic technology directions of the Commonwealth in Information Technology and telecommunications. This is a bit of an update really. We are sort of in mid-stride, if you will. I would hope that later this year we would have some final proposals to Ministers on the overall concept - the overall structure and content of an IT strategic plan that would be updated with what went through in the Budget and the results of the public exposure. So let me just highlight a few of the principles that were in that blueprint document that we put out and describe the work that has gone on since. The blueprint document, as we call it, the framework and strategies for IT in the Commonwealth was put out for public consultation in January of this year just before the election call - it was kept open for comment until the end of April and, we sent it everywhere. We sent it to State Governments, we sent it to private industry, to individuals who asked for it. We distributed it widely within Canberra and elsewhere. Matter of fact, we sent out 4500 copies - which only proves that the demand for a free good is infinite. We had 3000 Internet hits on our web site and frankly, I think this is the future of cost-effective information dissemination and increasingly we are trying to put more and more of our material in a timely fashion up on our web site. When we have the results of an RFP - it’s up on the web site - it’s a really fast way of getting stuff out. We had about 80 formal responses - ranging in length from one page to 20 pages - so we have got a fair amount to chew on. Now our original plan was that we were to digest it all out and gone back to Cabinet in about the August time-frame and obviously, with the Budget and all, we have had to slip that, but I do intend to go back before the end of the year and, basically, lay out the strategy. By the way this document is evergreen. It is not cast in concrete. It will continually evolve. But what I want to do, is to be able to indicate clearly to Departments where the key priority areas are and hope that that trickles down and permeates their planning processes so in the future, we are all generally moving in the same direction.
Now, let me just talk about a few of the key principles. I am not going to re-plough all of the ground, but there are a number of key principles that are embedded in that document that may, or may not, have come out in sort of relief form - that I happen to feel are very, very important.
The first one is that there is a value-add to having a whole-of-government approach to the Commonwealth’s IT&T infrastructure - the enterprise-wide approach. In fact, that is why OGIT exists. That’s what we were brought here to do. You know, our IT issues are the same as in the private sector. The context in which we solve them is different, but we are no different and so this concept of looking across Departments and finding out those common elements - where by taking an enterprise-wide view we can provide benefits to everyone - is what really makes the initiatives that we propose and move forward, attractive to Departments.
The second principle really is bigger than IT but I’ll stick with it in IT because that is the area of my responsibility - and that is, that competition grows markets. That means that it is good for us as a demanding purchaser. I want competition in all of my major markets. I want a number of sharp-elbowed competitors in there fighting for the business of the Commonwealth. It is good for us. We get better products at a better price. It’s good for industry - prepares them better for global competition. I think competition is extremely important and it underlies many of our strategies. The many to few approach in rationalisation - not many to one - many to few. What we are doing in the purchasing of telecommunications and others and I’ll come to that later. This is a very, very key strategy in what we are pursuing.
The third one is eliminating unnecessary and costly duplication and pursuing common shared solutions will provide benefits to Departments and ultimately, to industry. This is the flip-side of competition - it says, get down from many, many, many to fewer, apply it - and we are applying it initially to administrative systems - and it certainly has the support of the taxpayers. I have had people say to me “I am not all that keen about you reducing the scope of business, but as a taxpayer, I understand why you are doing it.”
The fourth one is that innovation is key to organisational health and survival. And that applies equally to Government as it does to the private sector. And Information Technology is an enabling tool to help organisational change in, as you go through this period of dramatic technology change. I think IT has performed well in the past. It will be called upon to perform even better in the future. And those of us who work in the Information Technology within the Government and within the industry will increasingly find that we have an obligation to demonstrate to management that we are indeed providing value for the money they expend.
The fifth one says that as a major purchaser, the Government can lead the market rather than follow it and that will provide benefits to the Government and as well will benefit industry. It is not enough for us simply to look out at what is out there today and say “what is out there and what can we use”. If we have a need that isn’t there today, we feel our role is to articulate that to you and say “what we really need is this and who is out there who can help us work towards providing it” and frankly that is good for us and I think if we are right in the sorts of needs we have and we can get it provided, it provides a base for perhaps a new export opportunity.
The sixth one basically says, as you try and implement change - cultural change, technological change, what have you - demand-pull is better than supply-push - and this is a change-management principle. It says, Departments do the work in IT. A number of people in the industry, they come by and see me and we have coffee together and they tell me about their products - they know I don’t buy anything and I know they know. They know that the purchasing is done out in the Departments. But I have a frame-work within which Departments are increasingly operating and Departmental ownership for any of these changing issues is crucial - because if Departments don’t agree, it probably won’t happen. They are the vehicles for change and the vehicles for implementation. This is why we have pursued a lead agency philosophy in a number of the projects that we undertook. We are not resourced to do all of these major projects You have Departmental ownership - they do the work, they are the ones that have to deliver, they know what has to be done and in fact, in so doing, we have products that are broadly acceptable across the enterprise and they are pre-sold. It is really the marketplace of ideas. If we have an idea and nobody wants to do it - then I guess it wasn’t such a great idea - and there are at least half a dozen projects that are underway in that area.
The seventh point is, that if there is somebody out there that can do a job better and cheaper than you can - and it isn’t part of your core-business - then you should give them the job. This is the core-business focus. It says outsource those things that are not part of your core-business. If there is a strong business case to do so it is clearly business case driven and it is entirely consistent with the existing policy frame-work of market testing for government activities.
And the final one is that our activities must support the Australian industry development initiatives. We are part of Government, and as we go out and procure in the IT sector, we must be mindful of the Government’s objectives, in the support of Australian industry and small and medium enterprises - and it’s really a bouncing of objectives for cost-minimisation, industry development and the desire to have an industry that will be globally competitive.
Well, all of these themes run through the blueprint. They are part of our change agenda and they crop up all over the place. I think we might even put them out in a more definitive format the next time around.
Let me just take a few minutes, if you will, and take you through a number of the projects that are underway and that have been launched since I last spoke to many of you and talked about my dreams last year. These are all whole-of-Government based. They are undertaken by the Government Innovations Services Policy Board Members, who are lead agencies in all of them. We provide a supporting technical resource, and Departments provide resources to get the job done.
The first one is the shared administrative systems. Most of you are aware that we have RFPs in the street and we have now closed them for the financial management and human resource management information systems and records management is coming along. We really got this one underway because when we first arrived there was a need. In order to do this - there had been a recommendation of clients first, that we dramatically reduce the number of admin systems and so this was something that we picked off early because there was a need. We have involved the Australian National Audit Office in this process - because we knew it would be contentious and basically, they are doing a real-time audit of our compliance of the process that we indicated to industry that we would follow. In the end they will give us an opinion as to whether or not we did what we said we were going to do. This picks up on the many to few concept - the themes that I mentioned earlier and the common-shared solutions. Its a business-case driven conversion process and the RFP that was recently completed has a preliminary short-list of 6 FMIS and 4 human resource products on the list and I am hoping, that by Christmas we can see some contracts signed and things underway. This project certainly attracted the attention of the indigenous software industry who expressed fears, frankly, of being excluded from the competitive process, but I am very pleased to note that 30% of the selected products are Australian and that’s in competition with the best in the world.
The second project is a small one - but an important one. We are a number of Departments - lead by the Australian Bureau of Statistics - that are looking at providing common facilities for firewall security. As the Internet becomes more and more pervasive in information gathering and ultimately, service delivery both for governments and for industry, a measure of security - against hackers and people who want to get in and do bad things to your system becomes more and more important - and what this study is undertaking to do, is to identify existing products that are already certified, that can be quickly brought in and we are looking at the possibility of having a shared facility whereby a number of Departments can get together and operate behind a shared firewall. We know large and many medium sized Departments have them all already - there are a number that don’t.
A third project is a really vast one - it is the Information Management Sub-Committee - lead by the National Library Eric Wainwright. Really this is what IT&T is all about - because in the final analysis - it isn’t the technology in this area - it is the information that is conveyed by the technology that is important - and they were given a modest mandate. They were told to go out and survey the entire Information Management landscape and tell us what everybody was doing in the area and to identify the really key issues, and then bring it all back and we’ll do it. Yeah. Sure. Well, we’ll try. The report is about that thick. It includes an Internet guide - which I think will be useful - I call it the Magnum Opus but we will read it. It really relates to identifying those three or four really key things that we can do early on that will allow a number of initiatives to go forward - because what I noticed in this whole domain is every time I asked a question like, “What’s going on in secure transmission of messaging?”, someone would say “Well the Defence people are out here doing this on encryption and AG’s are over here doing something on some definition of privacy and ...” and I’d say, “Well who is looking at the whole picture?” and the answer is “No-one is looking at the whole picture.” So this report will be a snapshot in time as to what is going out there. It will enable us to decide on what priorities we really must follow and when. This will be the core of a lot of valuable work for the years to come.
The fourth one I’d like to talk about is the electronic commerce. We did a survey - just to find out what was out there and - I have to say it’s a little chaotic out there at the moment. There are a number of Departments involved - the DAS - who are purchasing Australia, DOPE has a policy on line, OGIT has the whole of Government, AG’s has privacy, security of intellectual property, the Treasury worries about interactions with the financial institutions, the Tax Office on tax administration, and so on. Industry has Electronic Commerce Australia, Trade Gate, Tradex, Trade Points, Trade Blazer. I think we should have Trade Star, you know, just .... Anyway, there is a lot going on. There are people who are rolling out things. The DAS has got their electronic commerce, we have got the on-line strategy out of DOCA, the EC demonstration project out of DIST. Trade Blazer is an Austrade product. And then we have got Customs, Tax, HIC who are basically doing electronic service delivery on their existing processes. There is obviously a lot going on. Industry has basically said “Listen, is this altogether, because we don’t understand it.” We need a more enterprise-wide approach to it. There is concern about what sort of message standards are we going to use. What about the Internet? How about security? And there is a whole range of issues. And I think it is quite clear to me that this area is too important not to receive attention in the year to come.
Speaking of years, the fifth one is the year 2000. That is the year that, on December 31 in the year 1999, everything stops. Well, that is what the press would have - sorry gentlemen, ladies - some members of the press find that it certainly sells newspapers and, in fact, there is a real problem. There is no doubt about it. There are solutions and we have some time if we start now and move towards it. But if we wait a long time, we won’t have time and then, bad things will happen.
We have our Survey. We have our GRSPB Sub-Committee that is looking at it. They have created a survey - out to Departments. The deadline is back and those of you in the audience who are responsible for sending it in - if you haven’t - please do. The next phase will be we do an assessment as to where we are and then to ask Departments to prepare a work plan - a costed work plan - to indicate how they are going to remedy the problem. We have now recommended and approved, through GRSPB - a date standard - it’s the ISO standard, which is also an Australian standard - for use by Departments and agencies in their internal workings if they are not using one at the moment. These things can be translated. It is not the end of the world but the date standard - it will come as no surprise to you to note that there are four digits for the year followed by two digits for the month and two digits for the day - which means that when I arrived here and everyone told me that I was writing it backwards - I was right and they were wrong.
The problem in fixing this is not so much in locating the code. My god, if I were a retired Cobol Programmer now - would I ever make money. The fixing of the code is about 10% of the problem. About 40% is trying to get all your code together - you know in source form - and I suspect that there are people out here that have object code and they don’t know where their source code is. The supplier went bankrupt three years ago - or the supplier says “Yeah, you’re 8 releases away. Let me tell you what it is going to cost you to get the current release.” Anyway, all these things are going to be out there. But half the effort is in the testing because as more and more of these things are interconnected, its not just what you have to do with your eighteen programs feeding this database that you have just converted, it’s all the other people you deal with. So in the interconnected technology age, a change like this becomes a major testing exercise. We are also asking DAS - they are in the process of updating their buyers guide at the end of this - later this year - and part of that will be to ascertain the degree of Year of 2000 compliance in the products that industry provides. We are also working with AG’s to get standard contract clauses in for our future acquisitions. And in the process of doing this, we are liaising with industry, with other governments and the like because this is a major challenge for all of us.
Well, let me go on to the Budget for a moment just in a wind up. In terms of the decisions in the Budget and the projects that were announced - I don’t think that anyone should be surprised with what we are going to do. There was lots and lots of indications that this was coming. These directions were clearly embedded in clients first, that identified opportunities for whole of government approaches to telecommunications and talked about the - actually they talked about the single window as well - but they also talked about data centre consolidation. The blueprint that we put out, clearly signalled initiatives in the telecommunications and in data centre consolidation and there was a clear expectation from the incoming Government that would be significant savings in the Information Technology area. So the overall strategy that we have posited is enterprise-wide - it’s a whole of Government approach - it is founded on the concept of increased competition for those services - it focuses on encouraging interoperability where ever we can - which frankly supports greater competition, more competitive pricing and a more, and really, an easier job for us. It realises efficiencies in Information Technology but with a clear recommendation that meeting the needs of program Departments for service delivery is paramount. We are expected to give robust estimates of the savings - which is interesting, because in a sense, in some of these initiatives we are trying to predict the result of a future competitive process. It has embedded in it, support for local industries and small and medium enterprises. And it has two major voles, if you will - the first is the IT infrastructure in Departments and agencies and the second is the telecommunications network.
On the first, consolidation and outsourcing of IT infrastructure is increasingly common across the world. You see it in business - you see it in Government Departments - you see it in State Governments in Australia - it is basically happening everywhere. And so the Government approved in principal the outsourcing of the Government data centres, the IBM and IBM compatible data centres, subject to a scoping and market testing exercise, to ensure that there are savings out there. We expect to have multiple offerings, multiple clusters of Departments in keeping with our philosophy of having multiple competitors for the business that we have. It includes IBM compatible data centres, IBM and IBM compatible and the Customs Service Unisys installation, and this is really the first element of an examination of the whole infrastructure. And that is why the scoping exercise will pick up, not only mainframes but midrange and desktop and we will look at the assets, and the costs and the service levels and the staffing and the functional responsibilities. We’ll look at the market testing activities of whatever is done by the time we have to go back to Cabinet - in that regard there are really two potential pilot areas - Veterans Affairs - they have had their mainframe outsourced for up to five years now, they are also looking at the desktop - and Customs is looking at both the IT infrastructure and perhaps, applications development. We will probably get some additional information back from the Defence CSPIT contract when it is finally decided and we hope to go out to industry with an RFI later on in the spring. During that time, Cabinet has directed the departmental upgrades, or replacement of IT infrastructure, be minimised and confined to essential investments necessary to sustain approved service levels, and if there are significant additional acquisitions, the Departments are to come and talk to the Department of Finance and ourselves. And this will be until Cabinet considers the results of the scoping study next March. This is not a freeze in spending. What it is - a prudent focusing on the essential investments while we sort out what we are going to do. You don’t go out and buy new tyres for your car if you trade it in the following month. We expect to see a number of clusters of Departments and agencies and really we have not yet, in any way, decided how that goes about - that will be done clearly by talking with the affected Departments - but there are two main ways one could do it. You could do it by the nature of the technical architecture, or you could do it by the business and client base of the Departments. I suppose you could use almost any other base - the eye colour of the CIO of the Department might be a reasonable one as well - but in some way, we need a logical way of bringing these things together that makes sense to those Departments - so that they can sit down and then advance the agenda. The way we see it working is not that OGIT would become a client for all of this and deal with it - it will not be the South Australian model - rather we see it as having an over-arching agreement that has a number of really common things that we want to see in all the agreements, and within that head agreement these clusters would negotiate their outsourcing, go to contract, see what’s out there, and decide what’s best in their interest.
By the way, we are not required to outsource. If the deal isn’t good - there is no deal. The timing is - we have started now. We don’t have a lot of time. We’ve got to assemble a project team, collect base-line data on everything that’s out there - in Departments, in the October-November time-frame. Ideally, by late November we would like to be out to industry with an RFI that says “This is what we have got. This is what we are thinking. What do you guys think? Tell us!” We’ll take all of that - the experience from the pilot agencies, on whatever results from their contracting process and do a business case. Take it to Cabinet in probably, the February-March time-frame and that would be part of the next Budget.
In terms of staff impact, there is no immediate effect on the staff. The final decision on this is in the next Budget but it is clear that there are people looking at this and wondering how it is going to affect them. The world-wide experience in successful outsourcing is that large numbers of the existing staff go to the outsourcer, because they have the skills and know the business and in fact, they are sought after by the outsourcer. I think that there is tremendous opportunity in the Asia Pacific for the IT sector to grow and we recognise Australia as extraordinarily well-based to deal into the Asia Pacific and we would expect to see substantial benefits in that area. Any of this would follow guidelines that are laid down for the staff, and for those staff who do accept outsourcing employment, the experience tends to be that there are much more significant career opportunities in a business whose core function is the function that they are in and they are in a growing sector of the economy. I don’t know whether you noticed in the paper last week, but Morgan & Banks did a recent survey and found contrary to the trend in almost everything else, 52.8% of Australian firms surveyed were adding additional Information Technology staff. There are many issues here, in the staff issue, and we will be endeavouring to work with Departments to make it happen.
Well, on the telecommunications side, I think it is safe to say that the Government - we spent 400 million bucks a year - we are going to be a demanding buyer. We’re not just after volume discounts on our rates structures. We’re looking at Telecom tariff initiatives, we’re also looking at a virtual private network for a wide-area-voice, and for wide-area-data. Right now, for that $400 million that we spend on communications, we have got about 10,000+ billing points, we have services on about 3500 of 5000 switches around the country, the exchanges. We spend about $170 million dollars a year on whole of government arrangements about 1/3 for local voice, another third for long distance and the rest for everything else we do. We have been moving to establish a database, with the assistance of the various suppliers, as to where our spend is and what we are getting, and I think we already have better information than we have ever had before. It will only get better and that will assist us in better managing.
In terms of looking across the whole of Government for telecommunications, a number of things come out. We think we can get better savings by aggregating our demand. We can probably get greater bandwidth to any one service point. We can probably get enhanced features that we might need earlier - if we ask for them. We have the potential, in co-operation with State Governments, to provide broader bandwidth service to some of the regional and rural communities than would otherwise be the case if every Department in every Government did its own thing. Our overall approach is, to encourage a buy-not-build mentality, to go to end-to-end managed services wherein the supplier accepts responsibility for the total connectivity of all of the operations of the Department and is responsible for the service quality. We expect to expand our range of whole of Government arrangements into this area and in so doing, moving from a supply-follow to a demand-lead type of approach.
The Telecom tariff arrangements - we have saved about $40 million thus far. We’re getting a price advantage of - oh anywhere from about 5% to about 40% depending on the size of the Department on this and we will be seeking to advance and extend that - in this particular round we have got agreement from Cabinet to allow us to create greater competition in these markets. They have given us the authority to institute re-sale arrangements under the Telecommunications Act where required - and that really requires us to do four functions - we have to accept financial responsibility for any deal that is done; we have to accept responsibility of service provision, help desk, move ads and changes and the like; we have to bill the customers and market the service - and we will do this if we have to, through an outsource-type arrangement; we now have the ability to commit for a minimum of volumes for whole of Government tenders; which means we don’t get into this situation where we say to someone “What’s your price for this?” and they say “What’s your volume?” and we say “You tell us the price and we’ll tell you the volume” And we would like to be able to go out and say “We have so many of this - what’s your price?”
The agencies, as of Budget day, get to keep 100% of the savings from the whole of Government arrangements - that’s because their budget is reduced by 100% of the savings up front .... Not Departments that are clapping, clearly.
We are not in competition with the private sector, but in order to deal with dominant suppliers and circuit markets, if we have to, then we must perform the re-seller functions. That means, that if we want to sit down with the States and negotiate some shared arrangements in telecommunications, we are effectively functioning in a re-seller mode.
The second initiative, is the Commonwealth voice-centred network. It’s a feature-rich multi-vendor inter-operable virtual-voice network that would allow functional inter-operability between Departments. It would allow Departments to select the services from a range of suppliers that operate across PBABXs or Centrex-type services or other similar voice services. It will allow us to have greater competition in the market place and it sits over the top of existing agency networks. It is not shutting them down and replacing them. I think the important thing in this is that we are signalling to the industry that as international standards emerge, we want inter-operability across a defined set of functions - so that if it happens that QSIG, for example, becomes the international standard - after a reasonable period of time, we would expect all of our vendors to provide us that standard ,so that we can do the necessary inter-operability. We think this will probably take us a couple of years to put in place and the recent DEETYA RFQ has elements of our whole-Government approach in that area.
The final one is wide-area-data networks. I think that agencies, over time, will want to have access to low-cost high band-width digital networks to support data, voice, video and whatever else it is they might do. This is a big, growing market - it is about 20% of our spend now - and by the end of the century - it should be 40%. The current situation is that agencies generally operate their own networks now and in many cases, they own it. In many cases there is significant duplication and overlap. In the future is an end-end managed service across multiple vendors so that we give a frame-work for agencies to operate these networks and it would basically be a network of networks. Again, this is not replacing what is currently there now. It is rather supplanting it and providing an inter-operability function.
We are going to do it in three stages. The first one is to beef up the capacity of the existing services that we have - you know moving from 64kb access and 2 megabit trunks to 2 megabit access and anywhere from 34 to 155 megabit trunks. The next step is then to move to enhance capacity services like FRAME-RELE or perhaps ATM and over time, expand these network services to do the things you have to do for multi-media continuous bit-rate traffic and the like - that’s a longer term one. The whole idea is to get more robust, flexible and high-capacity networks everywhere and this is one area where the State Governments are really, really interested in talking to us a lot, and I think the benefits for us is that we will get a lot better service for our program delivery responsibilities and enable us to deliver better services across the country.
Well that’s basically it. Let me just wind up by saying, we made reasonable progress, we got organised, we have an office building that has heat most of the time. We have got reasonable links with Departments on many of the projects that we are under. We have got the blueprint out, we have a number of government-wide projects under way. We have two Budget approved initiatives and Cabinet endorsement to go ahead. Our challenge now is to bring this work to fruition and to continue to use IT to contribute the cost-effective delivery in information and services to Australia. They are very exciting times and I am pleased to be part of it. Thank you very much.
Wilson:
Andy mentioned at the outset that this was, this luncheon was
designed to launch an Information Management Forum. I will talk a little bit
about that at the end of the lunch but one of the points about that Forum is
that what we wanted to do was to give not just our media members, but our
non-media members, access to our guests here who specifically work in this
area. Now, the important thing about that it seems, is that there needs to be
a level of informality about that. Today we are going to have that same
informality - we have got some questions from the media, but I would like to
open up the Forum to other members here - other guests here I should say, who
might like to ask a question, so if you have got a question in mind - please
think about it. We’ll let you know how to do that - put your hand up and
I think Lee Catnull's wandering around on the edges - there he is - we’ll
get the microphone to you, but wait for the microphone please, because everyone
needs to be able to hear it. Our first question today comes from John
Hilvert:
John Hilvert
Mr Macdonald, John Hilvert from The Australian. I just
have one kind of procedural question which I think is rather interesting in the
light of your advocacy of single-window one-stop shop approach. How is it that
with the command that you have got concerning procedures in IT, that agencies
that wish to upgrade their services this year have to go to, not one but two,
separate agencies within the Finance portfolio. Is this your example of a
single window for this year?
Andy Macdonald
We have the same Minister, John. Well, there are two
elements to that. There is a financial element for which I have no
responsibility - that is the Department of Finance and - as the keepers of the
purse strings and the funders of these, whether you like it or not, they always
have a say. The other issue is the technology issue and that comes to us, but
- same Minister. Can’t say more than that.
Wilson
Short answer. Next question from Sue Bushell
Sue Bushell
Sue Bushell, Computerworld. Mr Macdonald, the previous
Government saw the Community Information Network as a key vehicle for one-stop
service delivery of Government information. With the abandonment of CIN, where
is that one-stop delivery going to come from?
Andy Macdonald
The CIN was really focused at the community level and really
that is a question that you should really put to the Department of Social
Services rather than me. I think what we are finding is that the rapid
penetration of the Internet across a variety of initiatives means that at a
point in time you really have to sit back and consider whether or not a
community-focused technology-based network supported within the community is
effective enough to continue its operation. I wasn’t part of the
consultation on that particular initiative - in fact, it was well up and
running long before my office was created, but a number of these initiatives -
the technology landscape is changing so quickly that they tend to get outrun.
But if you wanted more details than that, Sue, then I think that that is a
question you would really have to put to the people who are responsible for the
project.
Bruce Juddery
Bruce Juddery, freelance writer, journalist, whatever ....
Split personality. You mentioned, I think, the word, the term, whole of
Government, I think, 7 times during the course of your discourse. Maybe 8.
Just how far, how extensive is whole of Government? I’ve got a particular
interest in the tertiary education sector. There you have got a situation
where various reporting requirements from the States dictate what some
universities do and then find great difficulty feeding into the DEET, DEETYA
system. There are 3 or 4 different systems in operation in the tertiary
education sector at the moment. This is just an example, I think probably the
same thing happens wherever you are interfacing with State authorities and so
forth. You mentioned the States and you said they were of great interest.
Just how far does whole of Government go in your language and would you like to
see a common regime across all government, all the way down to the local shire
council or whatever?
Andy Macdonald
Yes. You have got to be careful. Remember that I am the
in-house man, if you will, for information technology and communications. The
issues you are talking about are program related between DEETYA and others and
States. We have had meetings with our counterparts from the State Governments,
who find themselves in a similar situation where the technology support - and
it is really a decision of program people as to how they co-operate. So in a
sense, to the extent that we can influence, it will be very much a tail
wagging the dog type of influence because the drive for that sort of thing has
to come from the program side and the technology people, once that is
recognised, can move to try and support it. It is very difficult, almost
impossible I would say, to have the technology try and drive the programs in a
way, simply because we have the enabling facility to do so.
Steve Lewis
Steve Lewis from The Australian Financial Review. Mr
Macdonald, I couldn’t help noticing in the Budget Papers, that the Howard
Government’s stated aim to save $350 million in IT savings this financial
year had been discarded and indeed, there was an additional spend of a couple
of million dollars. First of all, I would like to compliment you on your
lobbying skills in this particular area. Could I just ask though that, there
is no doubt that this Government is seeking substantial savings from
information technology and communications. You’ve identified some savings
in the telecommunications area. You obviously have some - I shouldn’t say
figures - but you obviously have some idea of the scope of those savings in
mind. Can you just outline the extent to which you think substantial savings
can be made in this particular area, and could I also ask you just to address,
as a secondary part to this question, the issue of industry development,
because there is no doubt that most people out there in the IT industry believe
that any move to outsourcing will be at the disadvantage, will disadvantage
indigenous manufacturers and suppliers and favour the big multi-nationals like
EDS and ISSC.
Andy Macdonald
On the first part of the question, there is no doubt that the
Government expects significant savings from IT. I think that the reason why we
got approval in principle to proceed now with the scoping and to come back in
the context of the next Budget is to enable us to provide estimates of what the
potential savings are that are sufficiently robust for them to act upon. At
this point in time, they simply were not that robust. So, no there is not $350
million, but there is an expectation of significant efficiencies, but it is
business-case driven. I mean, we have to find them and they have to - there is
also a recognition that information technology is not simply an expense, but an
enabling tool for program delivery. So I think, and you and I have had this
discussion before, Steven, on the role of IT in this area. But the fact that
one is part of program delivery doesn’t exempt one from the necessity to
be as efficient and to provide those services in as efficient a manner as
possible. So the scoping exercise that we are doing on the work in the
infrastructure, and indeed, the telecommunications activities, are in fact, a
response to the Government’s requirements that there be significant
savings out of that sector. The timing isn’t quite what they expected,
but we felt that it was more important to go ahead with numbers that had
sufficient solidity to be reliable than to throw a few numbers out and then try
and chase them around the fiscal framework for the next three years.
He asked two questions in one. He cheated there. Maybe he doesn’t get one next time.
I should duck this one. I forgot. Yes. On the industry development one. Look, there is a very clear industry development strategy out there - a policy of the Government and we operate within this policy - we will co-operate fully with DIST on this and we will respect it to the full extent. So I think that any time one changes, there is a concern that somehow, as the status quo is disrupted, that it will be automatically to the disadvantage of the indigenous industry - I don’t accept that as an initial premise and we’ll just have to wait and see how it goes. There are things one can do as one outsources to ensure that there is full participation, or ample participation, by indigenous industry and we will be guided by DIST and consultations with others in this area, as well as consultations with industry themselves.
Wilson
Steve, please feel free to ask another question if you wish. Our
next question comes from Bill D’Arcy.
Bill D’Arcy
Bill D’Arcy, PC Week, Dr Macdonald. In the
House of Representatives Report -Australia as an Information Society Adjusting
to New Paradigms - there is a cartoon of a series of mountain tops sticking up
above a cloud-line and written along the tops of each of those mountain tops
are the names of various Government Departments - the point being made that
they are mountain kingdoms and that very rarely does the twain meet. To what
extent are you reliant on co-operation of Departments in the pursuit of your
objectives, and to what degree are you reliant on a stick approach toward these
Departments in order to ensure that there is a co-ordinated and co-operative
approach being taken towards it. The second question that I would like to ask
you ...
Andy Macdonald
Two questions again, this is not fair - this’ll cost you
ten dollars, Bill.
Well, look, in any large organisation, when you are trying to change the way things are done - cultural change of any kind - there is an element of encouragement and pushing - but in the final analysis, if you want to have genuine change, you must have support of the organisations that are being changed. I said earlier that it is better to do demand-pull, have the Departments want to do something, than supply-push. Supply-push is like pushing on a rope - it will go forward, but there’s an awful lot of curves before it does. On demand-pull, on the other hand, it works really well. So we use a mixed approach here. I’ve got good support from the Departments on many of the initiatives that we are undertaking. It is in their interests to do it and we undertake to do it, but you don’t get agreement on all of them and in some cases you simply have to go ahead and move the agenda forward, even if certain Departments are not all that comfortable. We have had no agenda items where all Departments have been uncomfortable. There is a mixture. Some like one. Some like the other. That‘s the nature of any large enterprise that has multiple divisions. So I have been inclusive by nature. I try and work with Departments to make things happen but I am not adverse to pushing if one has to push to get things done. So, its a combination of both. I think what’s very, very important in any of these initiatives of cultural change though, is that you have the incentives going in the same direction. Let me give you an example. If I come to you and say “I am going to do something that you don’t really want to do, and we are going to do it together, and you are going to be my partner, partner, and at the end, after you have done what you didn’t really want to do, I am going to take all the savings from you and I will give it to the Budget.” That’s not going to be a basis for a very fruitful relationship. On the other hand, if I come to you and say “Gee I see that they have cut your Budget and I’ve got a solution for you and this will save you a bit of money. Why don’t we work together and make it happen.” - the incentives are different. And I think that’s part of the trick. To get the incentives going the right way. What doesn’t work is if somebody comes running in, issues a whole bunch of pronouncements, issues a whole string of reporting dates, and then sits back and lets the reports roll in. The reports will roll in, but there won’t be a lot happening out there.
Bill D’Arcy
Yes, you have given me an indication as to what you mean by
‘significant’ when you have talked about the requirement of
Government Departments to come to OGIT and to the Department of Finance, when
considering outlays on IT. Could you expand on that a little bit? What does
“significant” mean when it comes to the purchasing of IT by various
Government Departments and agencies? Is there a dollar line on this? How
have you established the ground rules as far as that is concerned?
Andy Macdonald
At this point in time, we don’t have a firm, definition
of ‘significant’. You know bureaucrats are wonderful at defining
everything and I expect we will probably have to. At this point in time, we
have got some general words there that say to Departments, use some judgement.
I suspect, in the final analysis, that we will have to provide a more specific
definition but, for really major acquisitions, it should be quite clear. I
mean, you don’t do it. Don’t go and re-equip your whole desk top.
Don’t buy another mainframe. Don’t do a bunch of things like that.
As you move down the chain we would expect that if Departments aren’t sure
- that they would contact us. At this point in time, we simply have not
defined ‘significant’ in any fashion. It’s sort of like saying
- in the administrative systems, when you encounter significant upgrade costs -
then you have to go and buy off the shared system list. We have yet to fully
define that. I think we probably will, and Department of Finance and
ourselves, will probably sit down and come out with some definition as to what
constitutes ‘significant’ in this other context. At this point in
time, we are relying on the common sense in Departments, to let us know when
they have a query.
Wilson
I would like to ask a question of you Andy. You mentioned earlier,
what is generically called the agency, which is to be created and sit under the
DSS portfolio which is to take in both DSS and some CES functions and others -
without wishing to create a situation where Tony Blunden and Sandy Hall - they
may not want to talk to you - I am just wondering if you could tell us what you
see as the broader implications, not just of the creation of that agency - the
implications in terms of IT - but also the changes within DEETYA itself, I
mean, the other semi-privatised enterprise employment agency - I think that
they call it - or, the employment placement enterprise, agency, that they call
it.
Andy Macdonald
Look I’m not going to comment on the machinery of
Government issues involved in structuring of a new agency, but what I will say
is that this is a real information technology opportunity for us take the
service delivery mechanisms of two very large agencies that deliver services to
a potentially client common group and when you take the other initiatives that
DEETYA has in mind, and the challenges of providing IT support to a disparate
and large group of small providers of services is going to be a real challenge
and I’m looking forward to working with DSS and DEETYA on making that
happen, but I really can’t comment on the validity of the structure,
except to say that I’m personally delighted.
John Hilvert
Mr Macdonald, I think that I have a note saying that if the end
result of - or to paraphrase it - my understanding is that, if, at the end of
the day, the scoping exercise does not show significant - to quote your comment
‘robust savings’ - you won’t do a deal. Where does that leave
you? Are we back to the, kind of Seymour Report where we look at internal data
consolidation, or is that just, thinking the unthinkable?
Andy Macdonald
Look, I have a strong personal belief that all the people in
the world who have outsourced, and claimed they have achieved significant
savings in so doing, are wrong. So we will do this scoping, but in my view it
is to refine an estimate that is already very promising, so I am not, frankly,
devoting a lot of time to the internal consolidation option.
Steve Lewis
Andy, could I just ask you a question about - you spoke about
co-operation with the States in some areas - like data services and that -
could you envisage - I guess I am asking you to sort of outline your vision on
Commonwealth/State relations - I mean they haven’t been all that crash hot
in a whole range of areas - but do you honestly believe that there is some
scope for some sort of seamless network, if you like, between the Commonwealth
and the States? How far would you envisage that, perhaps, going? Could you
give some concrete examples where the States have come to your office and said
“Look we’d like to talk turkey about some sort of sharing
arrangement”?
Andy Macdonald
Yes. Look, I don’t see it as being a Commonwealth to
multiple States. I think it will almost be bi-lateral, and it will be
opportunistically driven. We’ve have, virtually all the States, come and
express great interest in sharing our traffic over their whole of Government
arrangements, to which I have said “That’s very interesting, but
what’s in it for me?”. We have had initiatives with, Tasmania has
been talking to us on wide-area datawork that they are doing. We have had
early discussions with, oh virtually all of the States, trying to find areas
where there is a particular network, or a particular application that they are
doing that is of interest to us, where together, we could share the cost of
making it happen. I can’t give you a lot of the details, frankly, off the
- I could speculate on them, but I don’t want to mislead you on that, but
- suffice to say that there are examples in many of the States of areas that
are, you know, sort of very early times amongst the bureaucrats, to try and
identify particular projects where we could co-operate on and to find the
synergy. So its not going to be a sort of a, broad, ‘let’s sit down
around a table and have a Commonwealth/All-State type agreement’, because
the situations are quite different. So what we are trying to do is go to areas
where we think we can get a deal and something that benefits both parties and
it might be totally isometric between one and another.
Steve Lewis
Supplementary to that, would you see any need, to perhaps,
promote some sort of COAG-type agreement in this particular area? Does that
...?
Andy Macdonald
Well COAG basically said ‘in areas like this, if you
guys can sort it out and you don’t really have to make reference to us,
then go away and do so’. We have a - I wouldn’t call it a mirror
committee - but we have a committee where we bring all the communications
peoples from all of the States together, and they meet on a regular basis, to
discuss issues and find areas of commonality. We have had a meeting of people
who are supporting service delivery. We had a meeting in Canberra here about 2
or 3 months ago, and basically sitting down and saying ‘What can we do as
supporters of the service delivery to try and advance the agenda’ - so I
suppose that at some point in time, if we had a number of common points, and we
wanted to float it up to get an overall blessing, it could easily fit into the
COAG process. But, basically the signal that COAG has given - not to us
specifically, but in more general - is that, in areas that are higher in this
sort of policy content, that they have identified - if you can sort it out
yourself - then go for it.
Wilson:
Well Andy, I must assume that that was a pretty good speech, because
you seem to have answered everyone’s questions apart from the media, so, I
hope they are all happy - this was their chance. But there will be future
chances. Before I let you go, Andy, I might just make a few brief comments, as
I said I would about the Information Management Forum that we’ve launched
here today. Now, over the past, if you look back over the past eighteen
months, 2 years, we have probably had, maybe half a dozen speakers, who have
fallen into that IT information management area. We have been approached by a
couple of IT journalists, who are members of our club, John Hilvert and Bill
D’Arcy, who have said that they would like to provide a more regular forum
than just a couple of times a year and could they please enlist the support of
the Club in doing so. So that’s essentially what we intend to do. We
intend to hold a dozen, maybe 15 lunches a year, of those dozen or 15, three or
four, no doubt will fall into the category of a lunch such as this. I mean, I
know you’re not necessarily all fans of Bill Gates, but when Bill comes
here - and draws a couple of thousand people - as he did a couple of years ago,
that’s going to be a National Press Club Telstra lunch. Nonetheless, and
when Andy comes, that will probably be a National Press Club Telstra lunch,
unless he has some specific reason that he wants some smaller and closed group
to talk to. But there are a lot of other people, obviously, in the Information
Management area who, both Bill and John believe, and other members of the Club
believe, would be most useful to get together, and to allow people like
yourselves to get together with, to talk to in a smaller and more relaxed
forum. As I said earlier, while there will be a focus, this is going to be
done under the banner of the National Press Club. While there clearly will be
a focus on the media, the intention is that we should invite questions and
well, shall we say, discussion, from the wider audience. Hopefully we can
attract as many people as we did today to our future lunches but may be a bit
more successful in encouraging you to actually get into the action and ask a
few questions.
We’ll let you know when this series of lunches beyond today begins. Those of you who are members of the Club will be informed via the Club. Those of you who aren’t - well, perhaps you better join up pretty quickly, so that we can let you know.
That’s basically all I have got to say. I would like to thank Andy very much for coming along and hope we do see a lot of you, all of you, at our future luncheons series and as I said, Andy - thank you very much for coming today. As is usual, we would like to present you with a small parting gift. Thank you.
Ends
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