CIO

A Public Affair

The technology industry is rife with tales of senior government IT executives defecting to private enterprise, lured by prospects of more money, less red tape and the chance to work on cutting-edge projects. But just how often does fact measure up to myth?

Surely if the situation were as grim as some pundits would have us believe, we should count ourselves lucky that anybody at all mans the upper echelons of Australia's government IT departments.

Not true, say the government CIOs that we spoke to. While there can be little doubt that the life of a public sector CIO differs significantly from that of their private sector counterparts, reality isn't all that bleak. Executives with experience in both the public and private arenas agree that government CIOs have to work harder to achieve the same results that they could in the private sector. But that's only part of the story, they claim.

True, government CIOs face the added pressures that come with having to consider issues of accountability, privacy and government policy, but it seems many maintain that while remuneration isn't always commensurate with that of their peers in private enterprise, the rewards remain many and varied. Money, it seems, still isn't everything . . .

"Our job is harder."

That's the straightforward assessment offered by Centrelink CIO Jane Treadwell. She should know. As the CIO for the agency created in 1997 by the federal government to establish a single point of contact for citizens dealing with multiple government agencies, she knows firsthand how issues such as probity, privacy and the constant presence of government regulations add a dimension to the CIO role that most of her counterparts in the private sector can only imagine.

"There's more than one measure of success and, in public sector organisations, the bottom line is only one component of a complex environment - an environment that can change daily on the basis of government policy," she says.

The chief difference between that environment and that of the private sector? Executives on both sides of the public/private fence all agree: rules and regulations. While the private sector has ethical and legal boundaries, the issue of probity in the public sector is all-pervasive.

"I know there are rules, regulations and guidelines that apply in all business, but having worked in management in both sectors, I can tell you that public sector wins hands down when it comes to over-regulation," says Steve Amesbury, co-founder and director of Island Consulting.

Amesbury's background includes roles as project manager, applications manager and IT manager in some of Australia's largest insurance companies. In 1991, he founded Island Consulting to provide information management and technology project management services to both the private and public sector.

Specialising in risk management, change management and project quality assurance, Amesbury has held numerous public sector consulting assignments over the years, including work for government departments in Victoria and New South Wales. He recently completed five years as director, information services at the NSW Office of State Revenue, where he managed some of that state's largest IT projects.

"In my role, we had delegations specifying everything from our spending limits, to use of credit cards, to involvement on committees," he says.

"We had the Human Resource Handbook, Procurement and Disposal Guidelines, and technical procedures. We had Treasurer's directives, ICAC rulings and, of course, specific taxation legislation. There are rules governing how interviews are to be conducted, staff complaints are to be mediated, discipline is to be administered, and increments to be authorised. You name it, somewhere there is a highly detailed rule, regulation and/or guideline that tells you how to do it!"

This, of course, raises the question: who decides how much regulation is too much? After all, the public sector uses public money, and must be held accountable for doing so in a responsible and ethical manner. Similarly, CIOs are more likely than many other public sector executives to be involved with contracts and costly procurements, so their activities must be closely monitored.

"It is not that managers are incapable or unwilling to make decisions but - with a plethora of regulations to abide by, and additional considerations regarding privacy, probity and publicity - decisions can have unintended consequences. Thus care takes precedence over speed," Amesbury says.

The notion that caution is more important than swift action is one that Dr Ed Lewis, an academic consultant with the Australian Defence Force Academy, considers critically important to understanding the difference between the CIO's role in the public and private sectors.

Lewis holds a PhD in psychology and served in the army for 12 years, working mainly in information management policy. A member of the School of Computer Science at the Australian Defence Force Academy since its inception in 1986, his specialty, both in teaching and research, is systems planning. In that capacity he has served as an adviser to several government CIOs, helping to prepare business cases and evaluate tenders in most of the major federal government IT outsourcing initiatives since 1996.

Despite his long record of public service, however, Lewis undertook a brief sojourn in the private sector many years ago, acting as government marketing manager for Control Data in the early 80s. Lewis claims he entered the private sector to "see how the other half lived". He lasted a little more than a year before returning to government work.

"We used to complain about bureaucratic behaviour in the public service, with its seven layers of management, but then I went to Control Data and they had eleven layers of management," he says.

Despite spending most of his career in the military, which brought him face to face with government bureaucracy at its most tangled, Lewis maintains the amount of red tape to be found in a large multinational was even worse. "They had rigid bureaucratic processes you would not believe," he says. "I actually rejoined the army after that, thinking: Â'Thank God I'm going back to an organisation that knows what it's doing'."

Similarly, Lewis rejects the popular myth that portrays government agencies as lumbering administrative behemoths and instead asserts that the private sector has more than its fair share of convoluted bureaucracies.

"Bureaucracy is a function of size, not the sector to which you belong," he says. "You can get a small government agency that's quite capable of being as agile, as forward thinking and as rapidly moving as any private sector firm. You also have very large private sector companies - the BHPs and Coles Myers of the world - which are extremely slow moving because they have so many layers of management."

Lewis points out that over the last five years a number of government agencies have been turned into government business enterprises, complete with "shareholder" ministers that they must report to. He cites as an example the Defence Housing Authority, which has as its shareholders the Minister for Finance and Assisting Minister for Defence.

"They act as shareholders, there is a commercial board and so on," Lewis says. "Many such public sector organisations are run now on purely commercial lines."

"You get boards of directors or you get ministerial whim of fancy; you get commercial realities or budgetary pressures - they're just different names for the same sorts of pressures."

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Probity

There can be little doubt that CIOs in the public sector have to be far more aware of probity guidelines than their private sector peers. Unfortunately, as Amesbury points out, the multitude of government regulations that public sector CIOs must take into account also slows down the decision making process drastically.

"In the agencies I was involved with, I saw decisions take days or weeks and involve committees or panels - decisions which in my previous employment I would have delegated to a more junior manager and expected to have resolved the same day," he says.

However, despite his criticism, Amesbury is quick to point out that a longer decision making process is simply the price of doing business in the public sector. Those who deal with the government know from the outset that these are the rules that the government plays by.

It's a view shared by Colin Roberts, former director of information systems at the Federal Department of Communications, Information Technology and the Arts (DCITA). An 18-year veteran of the IT industry in Australia, Roberts began his career in the public sector but, after nine years in government, moved to private enterprise, where he assumed a number of sales roles selling solutions and hardware. Five years ago, he founded his own company and set his sights on the government outsourcing market. His position as manager of information systems and services with DCITA was a contract role. As such, Roberts is ideally positioned to comment on the difference in the way public and private sector organisations conduct business.

"It can take a lot longer to get something done [in the public sector], but that's predominantly because there are processes you have to go through and rules you have to follow," he says. "Accountability is what slows the process down, but when you're dealing with taxpayers' money you have to make sure you're squeaky clean. There's no way of getting around that."

According to Roberts, achieving success in the government sector is largely a matter of setting realistic expectations.

"The period between when you start taking a look at an opportunity in government and when you actually start doing the work can sometimes be fairly drawn out. But that's a known quantity. Government bureaucracy is no secret," he says. "Once you know how long it will take to get something done, you need to set expectations accordingly. It's a matter of establishing a realistic time frame for achieving something, given the bureaucracy that you have to go through."

In fact, it is precisely the challenge to streamline government bureaucracy that attracts some CIOs. Treadwell counts herself among the their ranks. She regards the need to scale back bureaucracy and deliver more efficient service to the public as a top priority.

"As an organisation we're trying to make ourselves responsive, low on bureaucracy, high on quality and provide a good work environment that makes it easy for our staff to service citizens," she says. "My interest is in helping that reform process, and in the information and technology area that's very much a transitional role. That's also what excites me about being a CIO."

Lewis takes a slightly different view. While conceding that public sector organisations often take longer to make strategic decisions, Lewis maintains that, when you hold the strings to the public purse, accountability must take precedence over action.

"One of the essences of an organisation that has to deal with the public is that you need a certain sense of stability so that the public knows what to expect," he says. "This can constrain circumstances, but often stability is a good design feature."

"Having stability is different from being hidebound and slow," Lewis says. "In fact, it's one of the characteristics of a quality service provider."

"Take the example of an organisation that's paying veterans' cheques. You want to know what to expect from this organisation. You want surety of service rather than wonderful innovations that mean each time you turn up there's a new product to consider or a new way of doing business."

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Hiring and Firing

Bureaucracy may be a characteristic shared by both the public and private sectors, but when it comes to staff recruitment, government CIOs face a variety of challenges largely unknown to their counterparts in the business arena.

"The public sector faces the same skills shortage as everyone when it comes to IT staff," says Amesbury, "However, there are tighter recruitment constraints which effectively negate the ability to attract the top end of market. Similarly, budget restrictions often mean that agencies cannot afford the costly training often required or expected by IT staff."

One solution to this problem that has proved increasingly popular in the public sector is outsourcing.

"Once upon a time, a job in the public service was seen as a real career, and you would hold onto people because of the benefit of having a secure job in the public service," says Roberts. "That's not the case so much any more as people are tempted by big dollars in other areas."

Roberts overcame that difficulty by opting to outsource many of DCITA's more specialised roles. Outsourcing allows Robert's organisation to leverage off its partner, using its resources to take the pressure off DCITA to recruit and retain qualified staff. Roberts says the chief benefit of such an arrangement is that it gives him the security of knowing he can rely on the resources of his outsourcing vendor when he needs them - even if he doesn't necessarily need them all the time"In an organisation the size of ours, which is about 700 people, it's hard to justify full-time hires," he says.

"For example, you might have a need for a WAN expert or a DBA, but you certainly wouldn't need them full-time - particularly if you're trying to recruit in a very specialised area. You might really need to recruit somebody, but you may only need to use them 60 per cent of the time.

"With an outsourcing partner, the onus is on them, and they are in a better position to provide such expertise because of the volume of work that they do. They can do a lot more as far as resource sharing and resource scheduling to make sure that they've always got the right people to do the job."

Treadwell agrees that retaining key staff is an issue. "Certainly it is hard," she admits. "People that work in Centrelink have a fairly good reputation and as a result keeping them here when there is a differential in terms of remuneration is a challenge."

However, although Treadwell acknowledges the difficulty government CIOs face in hanging on to talented staff, she claims it is important to put such recruitment issues in their proper perspective. After all, she points out, keeping star employees happy is a challenge that all senior managers face, public or private. Private enterprise may have the freedom - and the deep pockets - to offer high performers more money but, in the government arena, CIOs must find more creative ways respond to this challenge. And rising to that challenge, Treadwell claims, is one of the most fulfilling aspects of her role as CIO.

"Our turnover rate is actually less than the private sector," she says proudly. "At Centrelink, we have a varied environment and the challenges of providing good IT services in a range of areas certainly keeps people in touch with new technology. They can't always get that variety in the public sector."

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Motivation

Keeping talented staff is one thing, but what about getting rid of employees who are not living up to expectations?

"Public sector guidelines make it almost impossible to get rid of poor performers, particularly those who know how to play the system," Amesbury says. "Private sector managers who complain about the unfair dismissal legislation should try working in a government agency for a few years. I have had staff you wouldn't employ as door-stops. The amount of effort put in by their managers to attempt to get them to either lift their game or get them out was out of all proportion to their worth."

"There are certainly good people doing good things under trying conditions," Lewis adds. "These are sometimes good staff and sometimes not, but often they are attracted by motivators other than money"Here Lewis touches on the core of the debate - namely that people enter the public service for vastly different reasons to those of their private sector peers. The push to adopt private sector practices makes it easy to overlook that many government agencies exist to provide a public service. The CIO has to consider efficiencies, costs, strategies and so on, just as his private sector counterpart does. However, as Amesbury points out: "The public sector CIO cannot forget the responsibility that the agency has to serve the public. As with running train services to remote rural areas, the business of government is not always primarily about making a profit."

"In the public sector, there is a type of person who really commits to making a difference for the citizens," Treadwell says. "Certainly many of the people who work in the information technology group have that commitment. We've had people who've moved in and out of public and private industry and they've come back to Centrelink because of the [special] challenges we can offer them."

"It's all about why people want to work in the public sector," Lewis says. "People obviously want worthwhile jobs in challenging intellectual areas. They want to work on projects where they get a sense of achievement - and government is full of those.

"There's a rough rule of thumb which says pay is about fourth in attraction, seventh in retention. If money falls below a certain level, obviously that can be a demotivator, but often it comes down to the nature of your job.

"Thankfully, there are still many people out there who have a sense of service."