IT must flash for Gershon cash: analysts

After the Gillard Government reclaimed power on Tuesday, analysts have said that IT projects in the public sector will need to "show us the goods" or miss out on Gershon reinvestment funding.
Written by Luke Hopewell, Contributor

After the Gillard Government reclaimed power on Tuesday, analysts have said that IT projects in the public sector will need to "show us the goods" or miss out on Gershon reinvestment funding.


Analysts say that IT departments in the public service risk missing out on funding if they don't show the goods.(Cashmoney II image by Martin Kingsley, CC2.0)

In a controversial move during the 2010 election campaign, Prime Minister Julia Gillard announced that the ALP would make IT departments compete with other areas in the public sector for funding from the Gershon reinvestment fund. These savings were initially earmarked purely for IT.

Kevin Noonan, research director, public sector for Ovum, believed that the focus on rural Australia and the promises made to the "three amigos" will change the funding available for IT projects over the coming years.

"We're entering into a period where the government will need to reassess its priorities based on its post-election promises. It's quite clear that the funds set aside for strategic reinvestment are not going to be sitting there for IT. Competing head on with other initiatives is probably going to be an act of futility, because there are so many policy changes that both sides of politics committed to," Noonan said.

Yet, some agencies' IT departments would fare better than others. He said that service delivery agencies like Centrelink, the Child Support Agency and Medicare are examples of organisations that will look to roll-out a greater presence in the bush, in tandem with the upcoming investment in rural broadband infrastructure.

"There will be initiatives coming out of [the NBN] for new services to the bush, and there will be IT requirements coming with that," he added.

"We are also likely to see IT opportunities present themselves in the broadband, education and health sectors in the bush... The government will be very eager to find examples of how broadband is being used in the bush to provide improved services."

According to Noonan, this "showcase-ability" is the key to getting IT project investment from the Gershon fund.

"There has to be a clear showcase advantage for real citizens to make IT projects more attractive for investments. Not something where we can wave our hands around talking about theory, this has got to be something tangible."

Noonan said that showing people the tangible benefits of IT investments could come in the form of e-health and giving rural hospitals better access to specialists via video-conferencing.

"You can take somebody up to the screen and demonstrate the savings. It's the practical, 'show us the goods' approach that I think will be required."

Noonan also believed that agencies looking to refresh existing infrastructure and IT equipment will be pushed to the bottom of the list in favour of new, rural agency projects.

"It will be hard to see projects such as [datacentre refreshment and infrastructure refreshment] getting future funding. Departments that have aging infrastructure that were hoping for the Gershon re-investment fund to be used to get them an update of that infrastructure, [will] need to think about other sources of funds."

These IT departments at risk of missing out can make their business more attractive by investing in savings initiatives, according to Noonan, particularly if a chief information officer (CIO) or equivalent can put a price on power efficiency.

"If CIOs can link power costs to [the need for] infrastructure replacement [they will reap the benefits]. It's quite clear that newer equipment like printers and servers can pay for itself simply in power savings. They have to start thinking in those sorts of terms to turn a saving."

Steve Bittinger, research director for Gartner agreed, saying that these important distinctions demonstrate the maturity of a business.

"A successful business case, ultimately, is going to be the one that is tied in with real business outcomes. As you move to higher levels of maturity [in your business], you have a greater ability to integrate [IT into multiple business units]," Bittinger said.

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