The Australian Communications and Media Authority (ACMA) and the Department of Communications (DoC) are escalating plans to share IT and finance services between the two agencies that will lead to millions of dollars in potential cost savings.
Theto the parliament that the agency had been exploring the possibility of shared services with a number of agencies to meet expected budget cuts in the order of AU$5.2 million over the next four years.
Documents obtained by ZDNet under Freedom of Information reveal that in late 2013, an analyst was engaged by the Department of Communications and the ACMA, who determined that the two agencies could save AU$13.5 million over four years if they moved to share services. AU$9 million of these savings were in relation to the IT and communications infrastructure provision and services.
The briefing slides obtained by ZDNet suggest that the two agencies could save up to 20 percent on staff costs, with 8 staff members going as a result of moving to shared services, excluding the cost of redundancies.
The briefing canvassed the similarities between the ACMA and the department, and suggested that shared services similarities exist between the ABC and SBS, as well as NBN Co and Australia Post.
The ACMA and the department then agreed to explore shared services further, but discovered when using the AGIMO Cross-Agency ICT Benchmark report to examine the differences in the cost bases that the initial survey had accounted for IT cost bases between the two agencies in different ways. Galent Management Consulting was recruited to analyse the cost of IT between the two agencies, and it presented its final report in June.
The report found that the Department of Communications outsources 34 percent of its IT, while the ACMA outsources just 9 percent, and stated that the Department of Communication's model for hybrid in-sourced and outsourced IT services is more expensive than the ACMA's model.
The report stated that there could be significant savings in IT service delivery if the two agencies moved to a shared services delivery model. It could achieve savings if the ACMA and DoC combined functions including web-based, financial, and human resources systems, shared storage in the ACMA's datacentre in Canberra, shared disaster recovery contracts, shared help desk, shared support for WAN services and gateway services, and shared desktops and laptops.
The Galent report noted that both DoC and the ACMA have a significant oversupply of desktops and laptops compared to current staffing levels, with 735 desktops for 628 full-time staff members in DoC, while the ACMA has 675 desktops for 540 full-time staff members.
"If a shared arrangement was implemented, the requirement for a large surplus stock could be reduced. This is also likely to result in a reduction in software licences," the report noted.
The committee then decided on three potential options for hosting services for the two agencies:
- The ACMA hosting a private cloud for the Department of Communications
- DoC and the ACMA go to market for cloud services
- Or maintaining the status quo.
Under the first option, the ACMAfor the department's AU$13 million IT services contract with ASG when it expires in February next year, informing ASG next month. The ACMA would run an "Infrastructure Centre of Excellence", with decisions and KPI monitoring to be the responsibility of an inter-agency IT infrastructure steering committee jointly chaired by the two heads of corporate.
The ACMA's private cloud is based on virtualised Microsoft and Unix servers, and the department has noted that moving to a private cloud would have significantly reduced infrastructure cost. With the use of Agile, the agencies state that the ACMA can make its private cloud available to the Department of Communications "without significant modifications or upfront costs".
The two agencies' infrastructure teams would be combined into a single unit, with some staff from ASG approached to join the shared services team as non-ongoing staff to ensure continuity.
The agencies would also prefer for DoC to be upgraded to the ACMA standard operating environment, and the department would audit to determine which of its systems are required to remain in a protected network. DoC would also migrate to Outlook 2013 and Lync for unified communications under the proposal.
Under option two, the agencies would go to market for specific cloud services in addition to the ACMA's private cloud, where it represents value for money or "supports government policy". The Department of Communications indicated that ASG could provide fully cloud-based infrastructure for both agencies by the end of 2014.
The agencies flagged that HR, finance, email, and phone systems could all potentially be hosted in the cloud.
Due to the time constraints, this option would follow a similar timeline as option one with ASG's contract also ending, and the ACMA hosting shared services while expressions of interest are sought from cloud providers.
According to the documents obtained by ZDNet, a decision has not yet been made on the options, but the steering committee is leaning towards ending the Department of Communications contract with ASG and moving into the ACMA's private cloud.
Due to the upcoming ASG contract expiry, the two agencies are looking to finalise an arrangement by November this year.
For finance systems, as of July, there was an "in-principle" agreement to use payments and accounting systems hosted by the ACMA with a view to take them into the cloud, while the ACMA worked with the Australian Bureau of Statistics to also host that agency's finance systems.
Human resources shared services have been "put on the backburner" until 2015, while the Department of Communications and the ACMA complete restructures.
The Department of Communications said in a statement today it had yet to make a final decision.
"The current term on the department's ICT Managed Services contract with ASG Group expires in February 2015, there is however, a remaining one-year option on the contract," the department said.
"In line with Commission of Audit recommendations and government policy, the department is taking the opportunity to explore its options, one of which is a Shared Services arrangement with the ACMA who are a portfolio agency. The department has not yet made a decision on the delivery of ICT support services."
Although initial studies had scoped potential savings in reducing headcount, the department later clarified that no redundancies were planned as part of the proposal.
"Staff redundancies at the department were never part of the proposal with ACMA, and any potential savings in resourcing would be redeployed to other functions," the department said.
The move to shared services and cloud services by the agencies under Communications Minister Malcolm Turnbull's portfolio comes as part of the Coalition's election platform for use of cloud services, and thereleased in May, which argued in favour of the federal government's approach shared services in a staged adoption process.
"All Commonwealth agencies perform common corporate functions, such as paying employees and preparing financial statements. Given these activities are common across government, there is scope for economies of scale to be achieved, both in the procurement of back-office technology and service delivery."