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Unisys, Infosys sign landmark deal to outsource NSW back office

by Justin Hendry •
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The Minister for Finance, Services and Property, Dominic Perrottet has announced that the NSW Government had signed contracts with Unisys and Infosys to take over the service provision responsibilities of ServiceFirst.  In December 2014, Perrottet said that the two were the preferred suppliers, and that contract negotiations were expected to be completed by April 2015. 

The finalisation of the procurement took almost a year longer than first anticipated, and hit some speed bumps, including union action along the way.

The deal includes the consolidation of the variety of ERP systems into the one platform, and the Minister stated that he expected that other NSW agencies might want to avail themselves of the services provided by Unisys and Infosys.

The successful completion of the outsourcing follows the Transport for NSW’s ICT outsourcing program and contrasts with the about-face which has occurred with Victoria’s intent to outsource CenITex and Queensland’s intent to divest CITEC

The Service First outsourcing is the likely last in NSW, given that BusinesslInk, the shared service provider for the FaCS cluster, has become a division of FaCS, and each of the other clusters in NSW are working to further consolidate and improve their shared service arrangements.

It also stands in distinction to the move to shared services in Canberra, the wellspring of which is the Coalition’s eGovernment Policy. In Canberra, agencies such as the Treasury are seeking to provide differentiated shared services to agencies with similar corporate service requirements.

The renaissance of support for shared services will not however preclude any agency in either NSW or the Federal government from selectively approaching the market for outsourced solutions, or acting as a broker of services.

Service First’s new hybrid ‘as a service’ model will outsource its key functions ICT service provision to Unisys and business processes, such as HR functions to Infosys. Services from each will operate from both on-shore and off-shore sites.

The contract is expected to provide modern, flexible and scalable solutions to deliver yearly savings of around $20 million, which will then be used to reinvest in front-line services.

Minister Perrottet, said using “legacy system and process work for the agencies they support” was “inefficient, expensive, based on outdated technology and designed for a 9 to 5 world which no longer exists.”

ServiceFirst currently provides back office support to the Office of Finance and Services (soon to renamed the Department of Finance, Services and Innovation), Department of Premier and Cabinet, Department of Planning and Environment, The Treasury, Service NSW and the Public Service Commission. In other words, the key policy setting agencies, who must nimbly and rapidly respond to the government’s requirements and who will no doubt continue to be completely unforgiving of any service shortcoming.  

The then NSW Finance Minister Andrew Constance first confirmed the Government’s outsourcing intentions in September 2013, after a 2012 Commission of Audit into BusinessLink and Service First found neither were “truly integrated’ and offered a poor level of service.

NSW was the first Australian jurisdiction to employ a shared services model when the Government created the Central Corporate Services Unit (CCSU) in 1996 and the announcement will be the first substantive change to the model since 2002, when the Shared Corporate Services Strategy recommended the further consolidation of agencies service arrangements

As NSW moves to outsource, agencies such as the Federal Treasury are looking instead to provide differentiated shared services to agencies with similar corporate service requirements.

Treasury Chief Information Officer Peter Alexander told Intermedium in March 2015 that Treasury’s experience with protected level networks suited it to provide network services to small to medium agencies with protected network needs. Alexander felt Treasury could position as a ‘centre of excellence’ for such services.

Alexander also highlighted the possibility of his agency acting as a broker of services for client agencies.  

“In many of the failed shared services instances, they’ve basically had one provider for everything. In our model, there will be a series of providers, each the best possible provider of the service. Some will be government and some of them could be from industry. We’ll have contestability.”

In announcing the contract, Minister Perrottet said he expects that the new outsourcing model would improve service delivery support, with benefits including:

  • 24/7 support using automated forms and digital services requests to provide faster turnaround times;
  • flexible work option support for employees to use mobile and desktop devices in the office and to work out of office;
  • the move away from annual billing towards only paying for what agencies use
  • a reduction in costs associated with multiple on premise ERP solutions through consolidation and use of cloud platforms;
  • support for the transition of infrastructure to the NSW Government data centres;
  • the potential for other agencies to on-board and leverage scale and efficiencies; and
  • improved customer service.

NSW’s move to the new delivery model will be managed by the Office of Finance and Services who will work in conjunction with the 35 existing clients.

ServiceFirst will continue to provide shared services until the transition is completed by December 2015.

Related Articles:

Infosys and Unisys sign MOU to deliver ServiceFirst Shared Services

Treasury CIO discusses ERP tender, providing shared services to small to medium agencies

In Focus #6: Why Shared Services fail

NSW looks to private sector to replace ServiceFirst

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