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The bright side of the NSW ICT Costs Review

by Staff Writers •
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ICT suppliers will immediately see opportunities when the NSW Government seeks savings as part of the Review of ICT Costs.

A Treasury-based team headed by Deputy Secretary Stephen Brady, with secondees from other departments including the NSW Government Chief Information Offfice, is charged with undertaking the review.

Because certain cost areas, such as health, education and police salaries, are likely to be quarantined, it is already apparent that the key focus for cost savings will be in back-office functions.

This immediately creates opportunities for ICT suppliers:

  • To support agencies with their benchmarking;
  • To bring forward well-developed proposals for rationalisation, consolidation and further development of shared services.

As revealed by the Gershon Report, the key critical success factor will be well-developed, realistic business cases with demonstrably achievable back office and process savings as clearly articulated benefits.

The review will very closely match the process adopted by the Federal Government’s Gershon Review, and will focus initially on collecting benchmarking data from all agencies. It is understood no industry submissions will be sought.

Benchmarking is due to be complete by December. Thereafter, agencies will be ranked and, as part of the Budget planning process, Treasury will seek savings proposals to achieve the additional 1% efficiency dividend from departmental CEOs and CFOs early in 2010. This 1% efficiency dividend will apply in 2010-11 and 2011-12. For the subsequent two years, the efficiency dividend will rise to 1.5%.

Cost savings offered will therefore need to be sustainable and grow in magnitude for at least the next four financial years.

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