Services Australia’s new chief executive, David Hazlehurst, has only been in the job for four months, but the appointment of a seasoned, tech-savvy, post-digital leader has already prompted a major public warning to the agency’s sprawling IT supplier base feeding off its $1.6 billion annual tech spend.
After wearing the stain of successive high-cost project failures, including the crucial $200 million Entitlements Calculation Engine (ECE) component of the $1 billion+ Welfare Payments Infrastructure Transformation (WPIT), Services Australia has now vowed to “be bold” when it comes to giving underperforming suppliers the sack.
The commitment is part of a broader IT combat field manual on vendor wrangling and governance issued ahead of a parliamentary probe into the litany of Australian Public Service tech disasters that is seeking explanations and evidence on why so many big-ticket projects keep cratering.
The joint committee of public accounts and audit (JCPAA) has launched an “Inquiry into the failed visa privatisation process and the implementation of other public sector IT procurements and projects”. It started out looking at visa-processing privatisation but was soon expanded to other stuff-ups.
“Be bold in the execution of exit clauses: Ensure that the contract has the right exit points clearly outlined, and they do not cause an unacceptable financial imposition if executed,” Services Australia’s submission to the probe says.
“If the program is in, or is leading to an irretrievable position, have the hard conversations early, while ensuring you can execute your contingency plan.”
In a series of what Services Australia describes as “foundational lessons” and “strategy” for “working with vendors and system integrators” the welfare behemoth warns that “an agency cannot outsource/delegate risk or accountability to vendors.”
“Regardless of what the vendor can commit to through a commercial contract, and penalties that can be included, an agency will always be accountable for the successful delivery and management of ICT systems.”
Services Australia also warns agencies cannot just opt out of needed technological uplift by letting a contract.
“The use of vendors as SI’s in the delivery of large-scale ICT system transformation can increase the risk of failing to deliver quality outcomes if expectations are not made clear, and they are unable to perform optimally,” the agency said.
“Relying on vendors as SI’s is not a guaranteed solution to address ICT and business transformation challenges, regardless of commitments vendors make. While engaging with SI’s may appear to minimise risks for the agency and government, risk and complexity cannot be completely outsourced. It is important for APS staff to take the lead in managing SI expectations and outcomes.”
The publication of Services Australia’s latest IT project management posture is instructive because it firmly signals the giant mainframe shop is under firm new management after scandals like robodebt where it became clear that questions became the enemy of progress.
While robodebt had no real IT application development to it, other than a mathematically, systemically and legally defective calculation, it was hailed as an innovative use of technology by the former Department of Human Services.
Similarly, there are still many questions as to the process surrounding the awarding of the ECE contract that are yet to be answered in evidence that is likely to be canvassed by the expanded inquiry.
There is little doubt that the purpose of the JCPAA inquiry is to flush out any previous political interference or influence into a raft of IT contracts and procurement processes, and where appropriate, refer these to the relevant oversight authorities for remedy, including the National Anti-Corruption Commission.
In this regard, it is clear that the senior public servants now running Services Australia are aware of the concerns the current ministry may hold over previous processes, and how these could be addressed.
What is more relevant, at a governance level, is checks are already being put in place before the JCPAA hands down its final report.
Services Australia’s submission cautions to “be wary of the low-cost response” for easy tech solutions to more difficult systemic problems.
“Understand that responses may underbid and over-promise, which is likely to lead to budget blowouts in the future. Often, the lowest estimates come from vendors that are not aware of the complexity of the environment that government is working within,” Services Australia says.
“Price is not the only measure of value for money. Be clear in your selection criteria and understand the tension between low price, a target delivery schedule and fit for purpose outcomes.”
That’s the easy part. The harder part is laid bare under the “strategy” label for palming off the more vexed workloads to external providers charged with figuring out the groaning legacy stack.
“Do not underestimate the complexity of the business system that the technology needs to integrate into. While the technology itself might seem straightforward, the challenge lies in the integration into a highly complex government domain that many vendors will not have experience in,” Services Australia’s submission says.
“Does the vendor have the depth of knowledge required for them to deliver independently, or will they need time-intensive support from APS staff that may undermine the cost-benefit?”
It also pays to have some solutions ready ahead of what will likely be a pretty damning inquiry report.
Service Australia observes a “key lesson” is to have “the right people in the right roles”.
“While building internal capability to support training and knowledge transfer, understand the critical skills gaps within the agency and make sure those gaps are being filled with the right people.”
“This includes transitioning configuration and business knowledge management for SaaS platforms to APS. Use vendors to supplement the skills gap with a strategic view to grow APS capability.”
And to be careful about “vendor selection”.
“Not all vendors and [systems integrators] work under the same values, ethics, and principles as the APS. A strong governance approach to validate the outputs and outcomes of the vendor and SI’s [sic] is required to ensure transparency and appropriateness of the output,” Services Australia said.
Sounds like a plan. And not just for one agency.
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