IT spending stuck in Gershon wake

Minister for Finance Lindsay Tanner yesterday said he didn't know how long it would take to reignite IT spending in Canberra following the Gershon review.
Written by Liam Tung, Contributing Writer

Minister for Finance Lindsay Tanner yesterday said he didn't know how long it would take to reignite IT spending in Canberra following the Gershon review.

Razor: Gershon and Tanner

Sir Peter Gershon and Lindsay Tanner (Credit: Brian Hartigan)

Nervous jittering looks set to continue amongst those who control IT spending in Canberra — which had slowed prior to Sir Peter Gershon's review of the $6 billion annual spend on technology.

Asked yesterday when he expected spending by agencies to increase after the review, Tanner had no answer at the Australian Computer Society briefing he gave.

"I can't in effect answer that because we have projected a savings profile that becomes, at maximum, $190 million across the government — that's $190 million out of what will by that stage be over $6 billion," the minister responded.

Tom Stianos, chief executive of IT services and consultancy, SMS Management and Technology, which derived 15 per cent of its $128 million in revenues from Defence and federal agencies in the half year ending in 2008, told ZDNet.com.au that Canberra remained its toughest market in the country, which he didn't expect to recover until the next financial year.

"Canberra is probably the toughest market for us right now because federal government spending has been affected by the Defence and Gershon review, and so, the number of new projects is reduced," said Stianos.

Stianos said he was not hiring in Canberra, and while there were opportunities, there was no sign of large transformation deals of the past decade, the likes of which include the Australian Taxation Office's Change Program/Agenda, Centrelink's IT refresh, and the Department of Immigration and Citizenship's Systems for People program.

Cris Nicolli, CEO of UXC's Business Solutions Group, which employs around 100 staff in Canberra, told ZDNet.com.au it was hard for companies like his, one of the largest ASX-listed IT services companies in Australia, to keep throwing resources and remaining positive about the market when Canberra had gone quiet.

"I'm not complaining at all — we are in selected areas of government — but it is tougher to do business in Canberra than it was two years ago," he said. "I'm not sure how the government can expect industry to not lay off people when one of the major spenders is not spending."

Should the government start spending again in Canberra, Nicolli said it would "give the whole country a lift".

Tanner though, reiterated Gershon's finding that under the decentralised model of the past government, agencies had become unwieldy spenders.

"In too many agencies, what's been happening is that people have been turning out the money, doing what they did the last year, not paying attention to legacy systems or to longer term problems and not managing their ICT arrangements properly — so we have a challenge to get that under control," he said.

On the other hand, citing recent government research which showed that in 2008 citizens' first point of contact with the government was via the web over any other means, Tanner said the obvious trend would be more investment, but that would be a longer term reality.

"In overall terms, you will still see in the next five-10 years, the overall spending of government in this area will probably be higher in real terms that what it is today, and as a proportion of total spend. The reason is that we will be using more ICT as a basis for doing business and that is shown in the statistics from the survey which showed that more people made contact with government over internet than any other method — that translates into more investment," he said.

Speaking to the ACS, Tanner also flagged the idea of developing a career path for ICT staff within the public sector, and talked of creating roles that would transfer across agencies.

"If there was a more structured arrangement and it was easier for people to move laterally and upwards — from agency to agency; that should transform the attractiveness of ICT careers in the public sector," he said.

He also acknowledged the challenges such an ambition would face, with agencies typically maintaining the right to select their own ICT staff.

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