Plan Ahead

Plan Ahead

When it comes to IT, planning ahead has never been government’s strong suit. But that will never change until CIOs become involved with strategic planning right from the start.

Planning ahead for IT infrastructure, software and operating systems is one of the most challenging tasks there is, not least because IT is a dynamic ever-changing industry where new products and systems seem to pop up every other week. How could it be possible to plan ahead and be confident that what you are doing is going to be the right option?

If you work in a corporate commercial environment then in theory advance planning is relatively easy, because a company will have at least a five-year plan in place for its business and in some cases the plan will cover 10 years. In these situations CIOs and their staff are usually fully plugged-in to what is going to happen because they are privy to the company’s business plan. If IT requirements are to change throughout the lifetime of the business plan then the CIO will be consulted and will come up with alternatives.

When it comes to government, life is never so simple, because there is another aspect to government that most corporates do not have to overly worry about: politics.

“Governments change,” says one ex-government CIO who now works as a consultant, “and that means the whole focus can change right in the middle of all your planning.”

This consultant, who prefers to stay anonymous because he still works for government departments, says the other problem is that CIOs are rarely part of the planning process when it comes to government.

“The problem for all government CIOs is that the senior management put together a business plan and these business plans are usually so vague and so full of platitudes so that they appeal to the electorate, that the CIO does not have a clear idea of what’s required. Then, when the CIO presents the IT plan to the senior management based on these vague business plans, the technology is often not properly understood. [Senior management] merely query the cost.”

The answer, he says, is to ensure that government CIOs are involved in all business planning right from the start so they can give valuable input at that senior management level and in addition help the senior management to understand what IT can and cannot do.

“Strangely this is often not the case and you find that CIOs are often excluded from the upper echelons of the department where the policy is set. The fact is business plans from senior agency management need to have IT embedded in them from the start,” he continues. “If you don’t do that then it’s likely to be messy down the track and also frustrating for all concerned.”

Yet in spite of this, the consultant sees some of the smaller agencies doing it right.

“I’d say Australia Post is a good example of how complete management buy-in to the plan can work well, where everyone knows what’s happening. But there are also some dreadful examples of disjointed management. Take the hospital system. It’s very fragmented. What this often means is that medical specialists will build their own system against advice from the IT department. They go ahead and later you find there is no integration across the system and that can lead to all sorts of problems, some of them fatal for the patient.

“Another problem is that in the private sector everything is judged by the bottom line, whereas in the public sector there are community obligations and often not very good economic control, all of which can lead to less than satisfactory systems. Unless senior management can take CIOs into their confidence and involve them in all aspects of policy then it’s hard for me to see how government can work effectively for all of the stakeholders, and that includes voters like you and me.”

Healthy Benefits

One government CIO who appears to have worked out how to get the best results is Eija Seittenranta, who heads the IT section of the Commonwealth Government Department of Health and Ageing. This is a major portfolio with more than $100 million spent every year on IT out of an overall health budget of $31 billion. The IT department has 120 staff, plus IBM-contracted support staff, and uses 4668 PCs to get the job done. That job — which excludes the Commonwealth Rehabilitation Services (CRS) but includes all other public health areas — is to ensure that the Australian health service runs efficiently as well as effectively.

“Yes, planning ahead in our industry is always a problem,” says Seittenranta, “there’s just no getting away from that. But what I’ve found is that vendors do provide good indicators to show us where things are going.”

Seittenranta says that the key to running the department’s IT system effectively is to try to avoid complexity. “We always start out with a simple approach. I suppose our motto would be: ‘Keep it simple, stupid.’ For example, at a simple level if we replace a PC or buy a new one we make sure we get significantly more memory than we need. We will also buy off-the-shelf products if we can at every opportunity, so that everything we use is pretty much standard across industry. This means that when new people join us they should already have a reasonable idea of the sort of technology we are using and that means less time spent training them — and so there’s a cost saving there and there are efficiency gains too. This is all part of forward planning because if you don’t have to worry about these things then the system works well and is easier to control.”

She also says it is vitally important to have partners — software and equipment vendors with whom she can have a planned medium- to long-term business relationship. “It is important as part of this relationship that we have forward agreements so we don’t get too many surprises along the way. Still, we do our own research into new technology and we carry out extensive due diligence before making any decisions about infrastructure, equipment or software.”

Seittenranta says that what does concern her is complacency within the IT industry towards current technology. She feels that when innovations or changes do occur they could wrong-foot some CIOs.

“Because the Internet boomed and then fell back, there is not the hype that there once was surrounding technology — it is all rather complacent now. I think that’s a potential problem because it could be that another major technology paradigm shift will take place soon and if that happens then it will be harder for some CIOs — the ones who are not prepared — to get to grips with what might happen.”

This latter point is underlined by Andrew Rowsell-Jones, a vice president and research director at research firm Gartner’s Executive Program.

“The way government CIOs handle technology issues is patchy — some are good, some are not. Often the problem is an in-built one,” Roswell-Jones says. “Quite simply, the heartbeat of government beats at a different pace to the commercial world. Government is difficult too, because you have waves of completely different political realities depending on who is elected. It’s a major challenge, therefore, for government CIOs to see beyond the next election.”

Rowsell-Jones also points out that there are lots of diverse stakeholders in government, so it is very complicated for a CIO and team to cater for all of them.

“That poses some great opportunities,” he says, “but also some challenges too. As a government CIO you know that your projects are typically going to be large investments and medium paced. One of the things is . . . the IT industry is becoming very boring. What I mean is it is an industry that has many parallels with the car industry in the 1920s, where there were still a large number of companies but they were often offering the same sorts of products. The end result was that companies closed and others got bigger and that’s what’s happening now in IT.”

Alongside this rationalization in the industry, Rowsell-Jones also believes that the customer — typically the electorate — is not only a constant presence but is also a stakeholder who will demand more and more services, which often means more complicated technology, allied to more protection in terms of privacy and security of information.

“The fear amongst many CIOs, and especially those in government, is that they are going to be wrong-footed by technology or by demand, or even by both. This is a fair point because we will see mounting demands for information being routinely available to the citizen. Because of that we are going to see increasing security and privacy pressures.”

Rowsell-Jones believes that very few government CIOs are going to say, “We need this or that” and then go ahead and replace whole systems.

“What we are seeing is a tendency to build whatever it is on top of the existing capability. In most cases the base is already there. But adding services — say, allowing people to pay government bills online — means an increase in the amount of technology that you need and that’s where careful choices have to be made, especially when you’re involved in future planning.

“For sure, every CIO is having to make continuous optimisation of existing infrastructure. Now while infrastructure is fairly simple in many ways, the problem is that the stakeholders want more — more services, more options — so the risk is that because of the complexity and this building on infrastructure that is already there, we run the risk that something might go wrong.”

Rowsell-Jones’s advice is that CIOs in government need to get out in the market and ask questions. Lots of them. “Generally they do go out and do their research and they also come to people like us and ask our opinion. Information is available about systems and applications but you do have to ask.”

Sourcing Complexity

Many in the industry warn that one of the looming potential problems for all CIOs is the complexity in sourcing of IT brought about by the emergence of companies offering lucrative-looking deals. Chiefly this is being driven by foreign companies who are now knocking at the Australian IT door.

“What we’re talking about here is India and the Philippines, where companies based in these countries are starting to offer Australian companies and government competitively-priced IT,” says Rowsell-Jones.

“We are seeing lots of activity from these two countries and there are problems with this. Firstly, there may become a problem with skills issues — say, systems architects — because there will be little need for them if all of the IT is sourced out of India, for example. This will mean less skilled people in Australia able to put the systems in or run them, so it’s an issue down the track.

“On the other hand, some CIOs may find this an attractive move because in the short term, at least in terms of cost, it’s fabulous. In the longer term it could be a problem. Certainly I believe that by 2008 these companies will be a real presence in the Australian market. I’m talking about everything from the operation of the data centre to the network. Once that happens, and it’s offshore, then suddenly you have lost the ability to control it. It’s not here yet, but it’s coming and there will be some very attractively-priced deals which, as anyone in government knows, often make for savings and those are often applauded.”

Rowsell-Jones urges extreme caution, pointing out that when planning ahead, cost savings are not everything.

“CIOs should remember, just because a company comes along and promises cost savings doesn’t mean it’s going to be a good deal. As an example, companies from India or the Philippines can still make the same mistakes as local vendors, but the fact is they are not local, so it will be harder to solve problems if they arise.”

One industry expert who agrees there is the potential for problems if government CIOs just look at the bottom line and order from emerging Indian or Filipino companies is Fernando Calero , senior sales executive at MCI, the global telecommunications giant that does big business with government. But Calero also says the potential problem needs to be kept in perspective.

“You know, in my experience, and I was born and brought up in the Philippines, nothing ever gets done on time, so it would be an unwise CIO who opts for a system originating out of the Philippines.

“The thing though with both India and the Philippines is that there is a high service culture and that’s where, in time, they will make inroads into the Australian market. The main area that both Indian and Filipino companies are involved in is software development, and of course call centres. But I don’t believe that so far their influence in Australia is a real problem — at least not yet — because I don’t believe that Australian labour is really that expensive on a global level, and this is primarily a cost issue.”

Analysis Paralysis

Calero says his best advice to government CIOs is: “to look down the track, yes, but it’s most important that the infrastructure is correct — that way you can plan ahead without too many worries.

“In general, my advice to CIOs would be to get the framework right from the start. If they do that then building on it and getting the applications they want is not going to be a major problem,” he says. “Obviously privacy is a major issue within the government area and I would say that government CIOs are extremely aware of the issues surrounding privacy, so much so that some are almost paranoid about it, but that’s a good thing really.”

Calero does feel that there is room for improvement in both future planning and in the way government in general carries out its IT business. He believes there is significant room for cost savings — if only government would look at the way they do business.

“The thing is this: whenever a government agency wants to implement a new service it is a slow process. First they put out a Request for Information, then a proposal document, then a tender request. It is a long and laborious process and it is something that really needs to be speeded up.

“At the moment it is often a case of ‘analysis paralysis’. What I mean by that is so much time is spent analysing everything rather than actually getting the applications or systems up and running. Okay, they have to have committees but these need to be thinned out. Some government departments are already doing this and it’s working much better. There are some government committees I sit on which are relatively small and so things get done quicker and that must be a benefit to everyone in the long term.”

So perhaps planning for smaller advisory committees is one place to start in the government department planning process.

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More about Australia PostCommonwealth GovernmentCRS AustraliaDepartment of HealthGartnerIBM AustraliaMCI

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