By Julian Bajkowski and Paul Hemsley

The Queensland government has thrown open the door to outsourcing public sector payroll systems across the state.

The move is a watershed because it is almost certain to be followed by other internally-run government technology functions and services being exposed to direct competition from the private sector.

Queensland’s Information Minister, Ros Bates, over the weekend volunteered her own department of Science, Information Technology, Arts and Innovation as the initial bureaucracy to jettison its in-house systems, junking eight separate legacy platforms in favour of privately-run and outsourced services that will soon go to the market.

“It’s ridiculous that one department has eight standalone payroll systems that don’t talk to each other. I’m planning on bringing the eight payroll systems together,” Ms Bates said.

Ms Bates’ tough talk is part of a wider push to decentralise and privatise payroll and other software services across Queensland.

It comes ahead of what is anticipated to be a significant unwinding of the bureaucracy’s longstanding ‘build-own-operate’ model of technology internal procurement exemplified by controversial internal technology provider CITEC.

The CITEC model was deeply unpopular within Queensland’s highly successful technology industry, not only because it locked out local companies seeking government contracts but often used to compete directly against them for private sector contracts.

Last week the Queensland’s government’s top technologist – chief information officer Peter Grant – used the Technology and Government conference in Canberra to blast a culture of unaccountability and successive failures of his state’s shared services procurement models.

Mr Grant said that legacy applications were now a “big deal” for governments to tackle and that a ruler is now being run over Queensland’s systems.

“We are running an audit of everything IT in Queensland at the moment.  And that audit is showing us that we have hundreds of fairly significant systems that are reaching end of life simultaneously,” Mr Grant said.

“It’s a great thing if you are in industry because we are going to have to do something about it.”

Mr Grant said that there “haven’t been a whole lot of killer success stories” that had come out of his state’s pursuit of shared services.

He said that organisations needed to focus on their main lines of business rather than shared services “because you don’t want every part of your organisation putting all of its effort into back office functions.”

Mr Grant named Queensland Health’s now infamously botched payroll – built by IBM and based on software from SAP – as an example of what happened when internal back-office systems failed.

Ms Bates has said that the health payroll will not be included in outsourcing initiatives, however it is still to be seen whether IBM or SAP will be able to bid for further projects after the software disaster that underpaid, overpaid or failed to pay tens of thousands of Queensland nurses and health workers.

Speaking about shared services failures, Mr Grant said that the first problem was that “no-one’s responsible …  it’s really hard to find an organisation where there’s some person who will get the sack if it doesn’t work.”

“In the Queensland government on our shared services initiative we spent $1 billion dollars over 10 years and saved zero … zero,” Mr Grant said.

“We need someone accountable for policy outcomes for government. If the government wants to get outcomes, someone needs to be accountable, they have to get an early bus ticket home if it doesn’t work,” he said.

Mr Grant also cautioned that incumbency for in-house government providers did not always work to deliver the best value to taxpayers.

“Internal providers over time, they become the big fat provider.  [They] basically just get to a point – particularly if the funding model is wrong – where they don’t have to perform,” Mr Grant said.

“We had a group in Queensland called CITEC and they were technically very, very good. Agencies had to buy off them and buy off them at the price that CITEC charged. The costs weren’t very transparent.”

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