Local governments throughout Australia are facing major challenges in delivering improved services to ratepayers as traditional funding sources are reduced. For some councils, improved management of IT is the key to solving the conundrumThe "Three R's" of a local council - Rates, Rubbish and Roadworks - are no longer the full story for local government in Australia. The downward pressure of service delivery, from Federal to State to local government, has forced the entire local government tier to radically rethink how it goes about its business.
Motivated by funding cuts and administrative pressures from both Federal and State Governments, councils have embraced private sector models of management to more effectively utilise resources and deliver services. This is particularly true in the area of information technology, which local governments are grasping as a key weapon in their mission to improve community services while at the same time saving ratepayer's money.
Councils have moved away from single supplier, "one-stop shop" technology solutions that predominated in the 1970s and 80s in favour of IT strategies that include outsourcing and "best of breed" selection. Through respectively adopting these strategies, two councils, Bayside in Victoria and Marion City in South Australia, have managed to improve their performance through taking a hard look at how information technology is used to support their core business activities.
Bayside City Council is leading the way in the competitive use of technology to improve service delivery. After wholesale restructuring of local governments in Victoria by the Premier Jeff Kennett, every council in the State was required to improve its performance through a process of competitive tendering. This meant private companies tendered against internal business units to provide services to council.
Bayside - formed in 1994 from the merger of the coastal municipalities of Brighton, Sandringham and parts of Moorabbin and Mordialloc - covers 38,000 rateable properties, with a population of 90,000 residents, in south east Melbourne. The council's corporate manager, Finance & Information Services, Tony McIlroy says the council had embraced an ambitious tendering program due to the State Government's compulsory competitive tendering legislation.
"We had to reach the point where 50 per cent of total expenditure had to be competitively tendered by June 1997," he says. "We came in at 61.7 per cent.
That's the driving force behind this compulsory competitive tendering program.
We embraced it in a very rigorous way."
Throughout Australia, local governments are embracing technology as a central tool in their transition from a bureaucratic, department-based culture to a more management-oriented, service-based method of doing business. A current driver of this trend is a national competition policy that is affecting all spheres of the public sector, as well as the Federally mandated move from cash-based to accrual accounting practices, which makes commercial business models of operation readily applicable to the public sector.
According to Chris Bell, policy manager, Finance and Micro-economic Reform for the Australian Local Government Association, a major outcome was a split between purchasing and service provider functions within councils. "That requires councils to be organised more along business lines," he says. "We did a survey on council IT requirements which showed that a large number of councils are already on the Internet, so they are very aware of the communication and other possibilities available from new technology."Bayside and Marion City Council in South Australia have aggressively adopted a more business-like approach to using IT as an aid to service delivery to ratepayers. Bayside chose to outsource its PC fleet, including its computer network, equipment and services to an outside service provider while Marion eschewed traditional local government suppliers in favour of choosing commercial software for new financial and human resource software systems in order to meet its business requirements.
Two years ago, Bayside decided it needed professional assistance in technology support because of a shortage of staff in that area. An initial 20 expressions of interest in the business were narrowed down to six, with submissions evaluated on a point-score basis. Key selection criteria were technical capacity, including reliability and quality accreditation, and financial benefit capacity. Computer services company Protech Australasia, was chosen to manage the council's IT infrastructure. "Based on their tender, they were pretty competitive," says McIlroy. "Protech is effectively our IT department."The council, which employs 250 full-time people and about 70 people in part-time positions, runs a network of 150 Windows-based personal computers, based around the Windows NT operating system. Of the council's $45.5 million budget for 1997-98, it has earmarked an information services budget of $530,000 for operational expenses. In addition, it will spend another $285,000 as part of a changeover strategy to introduce new equipment and upgrade systems.
Protech provides all of Bayside's IT services including Help Desk services, local area and wide area network (WAN) management, software support on WAN applications, technical advice, management of hardware maintenance agreements and software licensing and also the provision of hardware and software. The company also participated in consolidating various IT systems from Bayside's component councils into a single network.
Bayside recently extended the contract so that Protech will now provide project management services for system development and implementation which is in accordance with council's information systems strategy plan. The company maintains two full-time staff on-site at Bayside as well as bringing in technical specialists as required. Also an account manager holds monthly meetings at the council to discuss issues of concern and planning. "Expenditure is on a par, but we are getting better value for money," says McIlroy.
Across the border in one of South Australia's largest local governments, the city of Marion has adopted an innovative software selection strategy to improve IT support for its business operation. The council, which serves more than 78,000 citizens in the southern suburbs of Adelaide, has adopted a "best of breed" approach to its information systems strategy at a time when councils are under pressure to deliver quality services that are competitive, cost-effective and efficient.
Traditionally, local government organisations have dealt with only a single mainframe hardware supplier teamed with a specialist local government software developer. This one-stop shop approach provided councils with their full range of IT requirements including financials, human resources (HR) and council-specific applications such as building, planning and parking. Major suppliers under this model were IBM hardware with Stowe Computing's software and Unisys with Wandek software.
Marion City Principal IT Services officer Peter Statton says the city had strategically chosen to acquire the best commercial software available to meet the needs of its operations. "We were really one of the first to do it," he says. "We decided to break that link and go out to the market in what is called the 'best of breed' approach for, in the first instance, financials and then HR.
"They were two quite separate tenders and were judged quite independently. But where we ended up was with Empower Business Systems supplying us with both Prophecy (financials) and Remus (HR)."Both Remus HR and Prophecy Financials, which were installed by Empower, were developed in Adelaide using the CA-OpenIngres toolset from Computer Associates.
Vital criteria were product functionality and vendor support along with the future development plans for the respective products.
According to Statton, Marion City adopted the new software selection approach because its existing software had not been meeting its needs. "Local government is going through huge changes at the moment," he says. "We, as an organisation, have been formed into business units and the information requirements of our new structure are quite different to what they were 12 months ago and will be different again in 12 months. We have to be in a position to meet the changing information needs.
"We have gone away from the traditional local government structure, so now each business unit is able to work as a separate entity, in addition to taking into account the city's need for corporate accountability. Also each business unit is responsible for a lot of their own HR management rather than relying on a centralised HR function.
"It's actually managing the human resources. So the HR system [has to be] a human resource management system, not just a payroll system."Authorised staff can access information stored on the systems, which run on a Sun computer, from Windows-based personal computers via a Novell network.
A field of national and multinational computer companies responded after Marion invited tenders for financials and HR systems in late 1995. The city hired a project manager to work with staff who would use the respective systems to develop evaluation criteria. Short-listed vendors for each project were invited to present the benefits and features of their respective products to the evaluation teams over the course of one week. Despite both being developed in Adelaide, Remus and Prophecy were selected independently of each other.
"Professionalism is more important than location, but when you get both, you win both ways," says Statton.