DHS turning away from end-to-end SAP for welfare payments system overhaul

The Australian Department of Human Services' CTO told ZDNet his organisation is listening to the Digital Transformation Agency's request to shake up the way it procures IT services to include smaller players.

The Department of Human Services (DHS) is a few years into its billion-dollar project to overhaul Australia's 30-year-old payment system, which processes over AU$100 billion in Centrelink payments each year.

Labelled the biggest digital transformation the government has embarked on to date by Minister for Human Services Alan Tudge, the Welfare Payment Infrastructure Transformation (WPIT) program is expected to take seven years to complete.

DHS uses SAP for its own ERP, and that traditional use of the software giant's systems made its way into the WPIT program, with SAP initially announced as the department's software vendor of choice for overhauling the system.

However, DHS CTO Charles McHardie told ZDNet that even though the department has historically been an end-to-end SAP shop, there's now wiggle room to allow the smaller players into the project that has been given a budget of around AU$1 billion.

"Initially, when we first walked into it, it looked like it was going to be a large systems integrator that was going to be selected and then backed up against a core software technology," McHardie said. "Initially that looked like it was going to be an SAP-dominant stack end-to-end."

That end-to-end stack saw the likes of SAP Hybris utilised for the customer experience end of the house and other SAP ERP technologies on the payments side.

McHardie said things have fundamentally changed over the life of the program, particularly in the last 18 months as DHS reviewed the requirements of the program.

Part of that reassessment was in a bid to de-risk some of the workforce and timing issues, but another large part had been the result of a push by the Digital Transformation Agency (DTA) asking federal departments to break their projects down into smaller, "bite-sized" chunks.

"That has allowed us to have a review to make sure we're applying SAP in the right areas and IBM technologies -- and a few others -- in the right areas," McHardie added. "So we've now got a huge focus on the front-end looking at different approaches like Angular, Node, Github, building out in a highly agile manner."

"Yes, we will still have SAP on the payments side, on the backend, because that's where our corporate ERP is, we have built out with technology like SAP Fiori for the eligibility and assessment side of the house, but the rest of the stack is up for grabs and we're doing a lot of work with the smaller end of town, which aligns very closely with what the DTA is directing me to do at the moment."

The DTA has asked government agencies to take a look at the whole technology ecosystem to ensure they are not locking themselves in to one dominant stack.

"The approach we're calling it now is dominant clusters; utilising technologies like SAP where it fits, but not right across that complete build," McHardie added.

Joining McHardie on the panel at the Gartner Symposium/ITxpo on the Gold Coast on Monday was Peter Alexander, who joined the DTA in the capacity of chief digital officer following Paul Shetler's resignation in November.

According to Alexander, DHS has been "doing a great job" of moving away from traditional approaches to service delivery.

"As a broad architectural statement, I think the approach would be to think about the systems we deliver and the way we deliver government into three layers: Your user experience or digital experience at the top, a data layer in the middle, and then systems and the rules-engines at the bottom, and to think about those three layers as integrated and connected, but also made up of a lot of components," Alexander explained.

"This is a complex thing to think about, but each of those layers has analytics going through them and various parts, but [departments need to] think about large systems in that way, and treat them differently.

"There's an important shift in how we do things within government that is happening now."

The push to open up IT access to smaller players has been driven by Assistant Minister for Digital Transformation Angus Taylor.

The assistant minister told journalists back in March that the "big bureaucratic beast" known as the Australian government was going to change the way it procures products and services, and would start ridding its innovation-stifling service provider panels as one way of doing so.

The government in August then capped IT contracts at a maximum value of AU$100 million or for a length of three years in a bid to allow small and medium-sized enterprises (SMEs) the chance to bid for smaller parts of big projects.

The government forked out AU$6.5 billion on IT last financial year, with about 30 percent going to SMEs.

Taylor wants to increase that share to 40 percent over the next 12 months -- which would have amounted to an extra AU$650 million in FY17, for a new total that would have been worth AU$2.6 billion for smaller players in the last year.

Disclosure: Asha McLean travelled to Gartner Symposium/ITxpo as a guest of Gartner.

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