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Health approaches open market for IT Service Management solution despite dominance of panels

by Sam Murphy and Michael Read •
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Ahead of the anticipated Approach to Market (ATM) for its future outsourced infrastructure management needs, open to the full market, ICT procurement in 2013-14 at the Federal Department of Health (DoH) has fallen dramatically.Just two open ATMs have been published all year, compared to 15 published in 2012-13.

The explanation for this is partly that for the first time ever, DoH is procuring more of its ICT needs through panels than through fully open ATMs. The other explanation is the Canberra-wide caution in procuring anything other than absolutely essential business as usual needs, ahead of the release of the Commission of Audit Report and the May Budget.


In the first half of 2013-14, 56.5 percent of the DoH’s procurement was done through a panel, rather than an open ATM. The Total Contract Value (TCV) of ICT goods and services sourced by DoH through a panel increased 225.4 percent in the first half of 2013-14 when compared to the same period in 2012-13. 


The majority of this new contracting activity has been from:

• SON867801 - DHS’ ICT Contractor Services Panel ($29.9 million); 

• SON782071 - The Specialist Data Warehousing and Business Intelligence Panel ($3.1 million); and 

• SON187689 - The Ageing and Aged Care Division's Data Warehouse (CASPER) Development Project Panel ($1.8 million).

According to Intermedium’s contracts database DoH’s TCV to 31 December 2013-14 was $68.3 million, down 18.3 percent from the same period in 2012-13. 


New IT Service Management solution required:


In the more recent of the two open ATMs, DoH has issued a Request Expressions of Interest (REOI) for an IT Service Management solution that integrates with an application lifecycle management toolset to replace its existing in-house and manual solutions.

According to the REOI, “The solution should be capable of integrating with toolsets, such as monitoring tools, currently being managed in-house and by external 3rd parties. The solution should also provide self-help capabilities for Health staff through provision of an automated service catalogue, knowledge-base tools, self-service request management and business application change management.”


It is envisaged that the solution will be able to manage the full end-to-end lifecycle through the one integrated solution or tool. DoH has specified that it wants the system to be a software-as-a-service solution and manage over 4,000 staff located around Australia.


IT Service Management “is at a relatively low level of maturity”, according to the REOI. It is supported by a set of in-house systems that are ageing and unable to cope with complexities in the Department’s support model. 

Currently its IT Service Management consists of Service Desk support managed by IBM, Incident Management, Problem Management, Change Management, and Request Management. “There is limited integration of the systems and data sources supporting the ITSM”, the REOI states. 


The implementation effort will begin with the transition of DoH’s ICT Service Catalogue and Change Management, Incident Management, Problem Management, Event Management and Request Fulfilment processes to the new solution. The final solution is expected to provide a single, integrated view of supply and demand.

DoH’s largest current project is the Personally Controlled Electronic Health Record (PCEHR) which is estimated to have exceeded $1 billion in terms of total contract value (TCV) since it was first announced in 2010-11. 


Between 3,000 and 4,000 people are registering with the PCEHR each day according to the Secretary of the Department of Health, Professor Jane Halton. The new Electronic Health system, which is part of the PCEHR is being used by 155 public hospitals


At present, IBM holds DoH’s ICT infrastructure contract. In 2011, the contract was renewed for $109 million for four years through to 2015. DoH has recently issued a notice that the procurement process to market test the provision of these services is to commence in May 2014. Industry has been invited to a briefing in Canberra on 16 April to provide them with “an overview of the RFT, including process, scope, expected contracting model and the department’s future operating model”.


IBM has supplied ICT infrastructure to DoH since 1999. In 2012-13 IBM had a TCV of $3.7 million with DoH. In 2013-14 YTD, it has a TCV of $1.7 million.




Related Articles:


In Focus #4: Public sector eHealth project round-up


155 Hospitals using Electronic Health system


Health readies approach to market for outsourcing of ICT Services



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