Queensland overhauls technology procurement

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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4 thoughts on “Queensland overhauls technology procurement

  1. I’m all for simplicity and consistency, so please Qld Government, make sure that you look at how you can standardise the 8 payroll processes and align awards before travelling too far down the outsourcing path, otherwise all you will get is 8 different outsourced solutions. Not much saving in that. One of the biggest issues witth the Shared Service Initiative was that no-one could force standardisation of process. I’m
    looking forward to seeing how this develops.

  2. So in one corner, you have big fat internal services providers & in the other corner,big corporates (e.g IBM & SAP)who did such a remarkable job it’s unclear if they “will be able to bid for further project after the software disaster”?

    Is it boutique small, private providers he prefers? A third way?

    One would also think there were 8 separate payroll systems, prior to March/April 2012, because there were 8 separate departments that formed the new one Ms Bates is the minister for possibly? Ridiculous indeed. Should have all been merged by now. Global warming & world peace should have been fixed in that time frame too while they’re at it.

  3. The Aurion payroll system is still being used by some agencies and is great The issues are the proesses. Prior to Shared Servises agencies using this system had tight and controlled processes in place. This system is Queensland based and if you wanted an upgraded then it’s a short drive down Coronation Drive to their Headquarters to discuss upgrades.
    If we are smart then we should continue with this product and keep jobs and money in this State.

  4. Was this what you said before the election Peter?
    “Under new management” might explain the U Turn?


    The Australian, February 14, 2012.

    “The government was well on the road to implementing Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) cloud facilities through CITEC, the state’s primary information and communication technology service provider. CITEC are providing all of the benefits of private-sector cloud, but they’re doing it in a government environment.”

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