IT: Govt's cost-cutting bitch

IT: Govt's cost-cutting bitch

Summary: The government needs to stop looking at IT as a necessary evil or the place to remove costs when the Treasurer comes calling.

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The government needs to stop looking at IT as a necessary evil or the place to remove costs when the Treasurer comes calling.

The Pappas report on Defence released this week had a line that caught my eye. "Facilities and other operating costs have a diverse set of drivers that range from construction costs, which have increased above underlying inflation, to computer service costs, which have grown below underlying inflation."

I think that we have an 'IT equals cheaper' mentality in Australia that often hampers our ability to see all of its opportunities.

Of course, construction was simply allowed to grow, while IT service costs are simply expected to shrink, I thought to myself.

It started cogs turning in my brain. When do government IT costs get to grow really? When something's so broke that money has to be thrown at it, or if someone thinks that there are savings to be made — for instance in shared services. Looking at specific examples: Tcard was begun because Sydney's payment system is stone age — and of course because everyone's doing it (see former post "Just like lemmings"), while Defence certainly seems to be spending its $940 million on IT more to save than for extra functionality it will reap.

I think that we have an "IT equals cheaper" mentality in Australia that often hampers our ability to see all of its opportunities. The only examples I can think of that go against that trend are the Government 2.0 Taskforce and the National Broadband Network. Generally, IT is the first place to cut and the last place to spend.

Think about the stimulus that Rudd so lovingly doled out to save the Australian economy. Why, oh why, do we need so many school halls? Why not, as IBM pointed out a while ago, use more of the money to add in technical capability? Smart infrastructure, not dumb.

Or, to go in a completely different direction, why not add lots more money to the government's Innovation Investment Fund? $20 million at a time (from a total of $200 million) is doled out to form new venture capital funds which invest in start-ups. Industry puts in funds like for like. Yesterday, a new one called Yuuwa was formed in Western Australia which, with industry funding, would have $40 million to spend on life sciences and information technology start-ups.

Imagine if we had spent even $1 billion of the $42 billion in stimulus money on new capital for start-ups. An Australian Silicon Valley could have suddenly blossomed, almost overnight. And the money would be fostering the future knowledge economy, not the construction industry.

IT isn't just good for a cost-cutting quickie. It's worth spending on — long-term marriage material with the possibility of very lucrative offspring.

Topics: Government, Emerging Tech, Government AU, Start-Ups

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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Talkback

6 comments
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  • Coarse language

    Do we have to use language like 'bitch' in the media?
    anonymous
  • IT will always cop it first

    IT is a rubbish so-called career. Always first to layoff and the last to hire - add offshoring, 457 visas and armies of people that are willing to work for peanuts then it's no wonder that IT work is so discredited.
    anonymous
  • Good article Suzanne

    I have moaned all year that 1billion would fixed all the IT systems in Canberra and we would have had a more efficient public service. Instead we had the stimulus for men with utes and cut backs in the Federal IT spend.
    All Gershon has done is delay the date when these systems need to be fixed. Instead of having cheap contractors, the PS will be hireing in the middle of a boom in 12 months time. Permanent ICT staff will be jumping ship to contract again. Its a huge lost opportunity, but at least the CPSU is happy.
    anonymous
  • Credibility and Tangibilty

    I've worked in IT for over 20 years and in many situations it has an industry delivered some brilliant outcomes. However the negative is the industry as a whole as often over promised under delivered, been late and over budget...technology is not the problem it is more often people and process and organisational culture. A billion in technology is not going to do it unless that changes to.

    What do u think a pollie is going to do..spend money on some intangible IT project that may or may not deliver something in 2 years or 5 years or a school hall or a ute. It is the fast food of politics.

    Those are tangible outcomes that will in their minds get them re-elected and are understood by electorate.
    anonymous
  • Tangible or Intangible

    A school hall can be looked at and you know exactly what the money was spent on, whereas most IT spending is intangible and there's always a sense that money spent on it is not being used efficiently. Especially after the exorbitant rates contractors in Canberra were getting until recently.

    Additionally with all the large vendors seemingly snapping up the locals (ie Kaz) the money spent is heading offshore and doesn't get fed back into our economy after the initial spend like money going to tradies does.

    Gershon has helped the IT situation regarding contractors in Canberra. Many more people applying for full time roles now. The reinvestment fund will help the local IT economy too.

    I do agree though that automatically looking to IT for cost cutting is mistake as there's an assumption that IT is wasting money. What IT should be doing is ensuring governance of IT is in place so the organisation understands exactly what is being spent and why...rather than us just approaching for more and more with the hand out. We should be as efficient as possible whilst ensuring cost effectiveness for the organisation is improved by providing real benefits.

    Do this and they'll trust that we're doing the job well and will support us when times are tough.
    anonymous
  • IT Careers with the BIG boys

    After being outsourced a decade ago, I joined the service providor as an IT tech-head. I did moderately (financially) well for a couple of years, but despite beng an "above average" worker, have seen my wage whittled away by lack of pay rises, often accompanied by the hoolw sentiment of "times are tough - the companie's not making lot of money". This year has proven no different and 2 years down the track, there is no relief in sight. My old Public Service mates have contiued to get their annual pay rises and have now left me far behind where I WOULD have been, had I decided to stay in a non IT role. Lesson learned -time to get out. I hope other people working for the magalomaniac Service companies vote with their feet.
    anonymous