WA government wants to outsource its IT infrastructure

Western Australia's state government is considering outsourcing its IT infrastructure in a bid to cut its IT spend by an estimated AU$65 million per year.
Written by Asha Barbaschow, Contributor

The Western Australian government said it wants to cut hundreds of millions of dollars off its IT spend, suggesting the most cost effective way to achieve this is by outsourcing the state's IT infrastructure.

The state has kickstarted its GovNext-ICT program, which it said is aimed at creating a new way of provisioning IT for the WA government, by putting out an Expressions of Interest (EOI) for the provision of a consumption-based service model for compute, storage, cloud, and a unified government communications network for the WA public sector.

"GovNext-ICT is about paying only for what we use, moving away from owning and operating ICT infrastructure, so we can concentrate on delivering the business of government," Finance Minister Bill Marmion said. "Estimated savings of AU$65 million a year are achievable."

"It is estimated that if we continue along with the current 'own and operate' model, we will be forced to spend over AU$3 billion on ICT infrastructure in the next 10 years."

Marmion believes businesses and governments around the world are leveraging as-a-service resources from private industry, saying this has provided a great benefit to their operations.

"Given this, there is no reason for the WA government to buy, own, and operate its own infrastructure," he said.

"We spend between 3 to 5 percent per annum of the overall State's budget on ICT, so it is imperative we get maximum value for taxpayers by leveraging our buying power and reducing duplication."

Marmion expects the GovNext-ICT initiative between the Office of the Government Chief Information Officer (OGCIO) and the Department of Finance will also improve connectivity for government agencies in regional areas.

In October, Giles Nunis was officially appointed as the state's first Government Chief Information Officer performing the roll out of the newly established OGCIO, which falls under the remit of the Finance Department.

At the time of Nunis' appointment, Marmion said his role would be to develop an IT reform plan over 12 months to support a new strategic direction, which was expected to initially focus on cutting the cost of IT across government and enhancing "transparency in the delivery of major projects".

"We are well-positioned to learn from the experience of other states and from overseas, which has shown that the strongest IT reform comes from having a broad approach right across government," he said.

WA Premier Colin Barnett said Nunis has an important role to play in helping to stabilise the government's IT costs, develop a whole-of-government IT strategy, and build the capacity of WA's growing IT sector.

"With a spend of at least AU$1 billion a year on IT, there needs to be better coordination, consolidation, and prioritisation of these resources across state government," WA Premier Colin Barnett said previously. "The delivery of ICT services in government has not always been as efficient and effective as it might have been."

The WA government is not the first in the country to toy with the idea of outsourcing IT services.

In May, Queensland Innovation Minister Leeanne Enoch pulled the pin on the decision to outsource the state's IT services announcing that CITEC would remain a Queensland government-owned information and communication technology provider.

The decision to outsource the state's IT services was made by former IT minister Ian Walker in 2013, after an audit conducted by former federal treasurer Peter Costello said the cost to maintain and fix the government's IT systems would amount to AU$4.7 billion.

The Victorian government has had a tumultuous history with its on-again, off-again, state-owned IT service, the Centre for IT Excellence (CenITex).

In July, an efficiency review, commissioned by the Victorian Department of Premier and Cabinet (DPC), said the proposal to outsource CenITex should not proceed and instead revert back to a government IT service, because the business case does not fully account for the amount of work and cost required within departments to achieve the required level of standardisation.

CenITex has been plagued with controversy, such as the slashing of 200 jobs in 2012 as a result of employees having exorbitant salaries and contract fees, with some salaries reportedly worth AU$500,000 per year.

Later that year, the Victorian Ombudsman released a report that listed a number of breaches in the CenITex procurement process, revealing that up to AU$4 million worth of IT contracts were awarded without due process.

The state's auditor-general found in June that the disruption of the government's IT strategy has played a part in the ill-monitoring of the industry.

"Since 2013, responsibility for the whole-of-public-sector ICT portfolio has transferred twice -- from the Department of Treasury and Finance to the former Department of State Development, Business, and Innovation, and, most recently, to the Department of Premier and Cabinet," Victorian Auditor-General John Doyle said in his findings.

Editorial standards