Centrelink slashes costs by AU$400m with IT overhaul

Centrelink's five-year IT Refresh program has been given a positive report card today from the Australian National Audit Office (ANAO), producing savings well over expected levels.

Centrelink's five-year IT Refresh program has been given a positive report card today from the Australian National Audit Office (ANAO), producing savings well over expected levels.

Centrelink CIO John Wadeson

Credit: Centrelink

The project, started in 2002, was announced in the 2003/2004 budget at a cost of AU$364 million, but was expected to achieve total savings of AU$304.9 million up to June 2008.

The IT refresh has smashed that forecast, bringing in projected savings in administered expenses of AU$405.8 million, instead of the AU$184 million as expected.

The departmental expense savings -- generated from reducing salary, administrative and capital expenditure -- did not live up to Centrelink's goals, however, with a AU$48.6 million expected savings, well below the AU$120.9 million forecast.

The administration expenses savings -- decreases in payment outlays through the reduction of over payments to recipients -- did not receive an unblemished stamp of approval from the ANAO, however, as they did not result from the originally envisaged technology improvements. The tech refresh was intended to provide links with other public and private sector organisations to enable "real time" verification of customer circumstances before payments are made. Instead the savings were made through reductions in payments caused by data-matching activities that recognised increases in customer asset values -- such as a rise in property value -- and income.

The other goals were providing online services, making a more sustainable and stable IT infrastructure and developing the agency's business intelligence capacity.

The online services have received a tick, with customers being able to access an increased range of services online including changing their Centrelink details, applying online for assistance and receiving correspondence online.

"Through the program, Centrelink has significantly increased the number of services customers can access online, including the building of the secure customer portal, self-service and online claiming facilities," Centrelink CIO John Wadeson said in a statement.

The agency has also enabled easier sharing of information with the private sector to verify customer circumstances, the report said.

"Refresh has allowed Centrelink to improve system stability by updating ageing infrastructure, building a lower cost structure and increasing capacity to provide future innovative online services," Wadeson said.

To adopt business intelligence, Centrelink has established an enterprise data warehouse, however, the ANAO's report said it is taking too long for the warehouse to be populated. The ANAO recommends priority be given to its population for the full benefit of the warehouse to be realised by Centrelink.

Centrelink welcomed the ANAO report, and has accepted all its recommendations.

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All