What are the implications for the government use of ICT arising from the financial turbulence that we have seen over recent weeks?
The most obvious consequences are in the government’s fiscal position; the release by Treasury of the PREFU (pre-election fiscal update) on October 6 provided a clear signal that the NZ government will be facing a period of increasing fiscal pressure over the next decade.
There are different ways to view ICT expenditure in such a climate. A “batten down the hatches” option would include stopping or suspending projects to reduce new investment, and focusing on cost reduction in core ICT operations. This will provide financial relief and contribute to a balancing of the books within individual agencies - a very important short term objective.
An alternative approach is to see the fiscal pressure as a “catalyst for change”. The strategic future for government information and technology has been clearly laid out in the Digital Strategy 2.0 and the Development Goals for State Services, which specifically includes Value for Money as a critical feature of high performing State Services.
Value can be created by the design and deployment of technology across agencies, sectors and all-of-government, to drive out duplication - of systems, processes and investment - and continue to make progress towards the strategic goals that we have set.
Long term fiscal pressures need long term investment and expenditure responses. In New Zealand government ICT we have a unique window of opportunity in the next 2-5 years arising from the replacement of “legacy” transaction processing systems implemented in the 1990s. We can redesign systems and re-engineer business processes across agencies to meet the expectations of the information age.
However the reality of the current outlook for the government’s fiscal position will make this “catalyst for change” approach a major challenge. The recent Gershon review of Australian government ICT identifies significant opportunities for improvement - should we be taking a similar approach in New Zealand government?
7 Comments
On the nose Laurence, this is an opportunity. The global financial situation should, with good leadership, help clearly define objectives for the country and the bureaucracy.
Departments (not just the ICT) should be required to split their budgets 70:30 (BAU:new) as suggested in the report, and the BAU should be sweated to drive efficieny, say 2% reduction in costs year on year through business process improvements, not new technology.
The 30 should be centrally controlled and only go into new cross departmental initiatives unless there is a very clear and critical reason (attached to the national objectives) for doing otherwise. The cross departmental stuff should drive out duplication and extend service levels.
As the Aus report reccommends, use of contractors/consultants should be reduced to be replaced by a pool of permanent government Business/IT people to be used to help sweat the BAU or in projects.
The only concern I have with the Aus report, is that it appears (from a quick scan) to treat ICT separate from business process. From my experience this split is not effective, you have to look at the whole of each business process rather than just the ICT. In many cases significant improvements occur from better use of existing tools.
Can you tell us where, in your opinion Sir Peter Gershon was particularly right and particularly relevant, Laurence? In other words, which of his recommendations might be usefully considered for NZ e-government?
I’ve been advised to reply on the blog as it might be quicker than tracking you down by phone.
If you like you could provide a more detailed reply to my email so my competitors don’t read it all
Stephen,
The Gershon Review was the end result of a significant work programme - 112 submissions, 63 interviews/meetings, and 3 surveys. The results were provided to government for decision making. Any initiatives in NZ will need to go through a similar process of research, analysis, recommendations and decision by government.
Some of the observations from the Gershon review that resonate with my view of the challenges and opportunities in New Zealand include:
=================================================
“Citizens now expect government services to be as good as those provided by the private sector.” (In fact our research shows that New Zealanders have higher expectations from the private sector than the public sector).
“Effects of an ageing population, global competition among various economies, and climate change are creating and will continue to place pressure on public sector budgets to increase spending in areas such as health, education and transport. The Government must find ways of improving the efficiency and effectiveness of its service delivery. This means providing value for money by improving quality of service (accessibility for all and acceptable citizen experiences and outcomes), and reducing the costs involved in service provision.”
“Across the board, agencies reported that ICT is a fundamental business enabler and an integral part of their operations. There was also a unanimous view that ICT will continue to increase in importance. In particular, agencies commented on the increasing need for more robust and agile systems to:
• meet rising expectations from citizens and government
• deliver more efficient and effective services and operations
• harness information and intelligence
• manage increased complexity in the regulatory, business and policy environments. ”
“Nineteen agencies said that they expect the demand for online transactional interactions to continue to increase, with the safeguarding of citizens’ information an important consideration.”
======================
From my interactions across government agencies, these are common concerns and issues in New Zealand as well.
The purpose of this thread is to stimulate an open discussion on the subject. In that spirit, I would be interested in your views on the relevance of the Gershon review to our situation in New Zealand.
ICT budgets need to be seen in the context over overall departmental spend. I see no issue in principle with increasing the proportion of departmental appropriation allocated to ICT if it results in operational efficiencies or value creation and is neutral or positive with regard to overall budget.
To clarify, this is a ratio argument. Government departments need to consider their budgets holistically. This holistic consideration may lead to an increase in ICT spend as a proportion of overall departmental appropriation to drive customer value or reduction in cost to serve, but should be managed within existing departmental allocations.
Laurence Millar wrote
“Citizens now expect government services to be as good as those provided by the private sector.” (In fact our research shows that New Zealanders have higher expectations from the private sector than the public sector).”
The way you wrote that, it would appear you see New Zealand’s experience as different from Gershon’s findings. Or did you mean to say “greater expectations from the public sector than the private sector”?
Can you elucidate?
Stephen,
Thank you for the correction - my post was a misquote.
Kiwis Count, (http://www.ssc.govt.nz/display/document.asp?docid=6554&pageno=4#P246_13344) reported:
“The survey looked at how New Zealanders rate public services in comparison with similar private sector services. The results show that:
* New Zealanders expect public services to be higher quality than the private sector”
Apologies for misleading any readers.
Laurence
Laurence,
I couldn’t agree more with the suggestion that the current NZ fiscal situation could provide a “catalyst for change”.
I think opportunity exists in two areas. First, there is a clear need for rationalisation/consolidation/virtualisation etc. of computing platforms, data and business processes across government. Taking a purists approach, I argue that the installed computing power in the NZ public sector exceeds actual computing requirements by an order of magnitude. Realistically, you could easily halve it and achieve better results in the process. There is nothing new in this - many people (including me) have been arguing for it since the mid-1990s and it has been a goal of e-government in NZ since its inception. Agencies have, by and large, been arguing against it for the same length of time, although I believe attitudes may be starting to shift recently. The key enabler of change now is not just fiscal pressures, but also the facts that 1) the required technologies have finally become sufficiently mature and 2)the current model of government computing is economically and environmentally unsustainable.
The second area of opportunity relates to using ICT to enhance workforce productivity and performance, and address sustainability challenges (starting with CO2 emmissions, but also encompassing issues susch as attracting a retaining the public sector workforce of the future). In this area ramping up investments in communications and collaboration technologies (especially video)that will allow new ways of working (e.g. telecommuting), and ongoing adoption of web 2.0 tools and models (where NZ is clearly setting benchmarks already)makes great sense.
Regarding your questions about the Australian Gershon review, I think the findings would apply equally in NZ. Perhaps you shoukd commission Gershon to conduct a similar review in NZ? Such a review should be sure to include the wider state sector in its scope.
One Trackback
[...] have some interesting posts up already, including one on gov ICT strategy in the current unsettled financial situation: Long term fiscal pressures need long term investment and expenditure responses. In New Zealand [...]