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Get rid of CITEC & outsource the rest, Costello recommends

by Paris Cowan •
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The Queensland Government manages and operates 1,730 major ICT systems, at a cost of $547 million each year. Some 15 of the most important of these are teetering on the edge of meltdown, with nearly $800 million required to replace them, a bill the State has made very clear it cannot afford to pay.

Peter Costello, chief author of the Queensland Commission of Audit, would like to see all of this risk – plus roughly $4.5 billion in technology related assets – taken off the Government’s hands for good, and the Newman Government mostly agrees.

The long awaited final report of the Commission of Audit, or Costello Report, was tabled in Parliament today containing 155 recommendations and a call for dramatic reconsideration of the kinds of activities the Queensland Government can afford to be involved in.

Government “needs to be the enabler not necessarily the doer” said the report, an ethos which it extended to ICT.

“As purchasers of technology, governments, rather than the suppliers, carry the risk of owning the upgrades and replacement costs. This is a high-cost model, locking governments into technological solutions that are becoming obsolete in an environment of continuous and rapid advances in technology,” it says.

It recommends that the Queensland Government move to a predominantly outsourced model of ICT service delivery, under an “ICT as a service” strategy that will no doubt shape the whole-of-government ICT plan due for release in June this year.

In parallel, it says, the Government should “discontinue its role as an owner and manager of significant ICT assets and systems” beginning with a program of ICT asset sales and the privatisation or dissolution of central ICT infrastructure provider CITEC within two years.

All of the ICT recommendations have been accepted by the Newman Government.

What all of this means for the future of the Queensland Government ICT market, however, is still a bit hazy.

The report does not set out a timeline for a transition to outsourced services, and does not specify whether the most at-risk systems can be maintained long enough for managed services suppliers to transition-in.

It does, however, indicate that the adoption of cloud solutions is likely to play a major role, with the report itself revealing that a whole-of-government cloud strategy is currently under development within the Queensland Government Chief Technology Office (QGCTO).

It also advocates for a ‘centre-led’ approach to service sourcing, where agencies’ decisions will be constrained by whole-of-government standards, which will be bolstered by “robust” ICT governance reforms.

The Queensland Government invests $1.6 billion into ICT per annum, 65 per cent of which goes to the market, according to the report. This represents 3.7 per cent of the total Government budget.

Related Articles:

Final Costello report pushes for shared service reforms

Costello Report considers privatisation of CITEC, Queensland Shared Services

Queensland's new IT Minister to have strategy done by June


For more information, please contact the Editor (02) 9955 9896.

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