Andrea DiMaio

I just read that Sir Peter Gershon has been recognized as the 7th most influential “person, product, organisation, trend or event” for 2009 by Computerworld Australia. This is an impressive achievement, if you think he is ahead of virtualization (at number 9) and netbooks (at number 8).

Sir Peter Gershon is the person who led efficiency reviews in the UK in 2004 and the in Australia, in 2008, triggering a wave of cost-containment and rationalization measures that are deeply changing the way governments deal with IT. In the UK, the Operational Efficiency Program in 2009 stemmed from the early work he did, bringing his recommendations to the next level. In Australia, on the basis of the lessons learned in the UK, he proposed much more aggressive cost saving targets that have really set things in motion.

Therefore one would argue that what he has done is good, which I would certainly agree with. However, amongst all these praises, I would suggest that his recommendations – and the way they have been implemented – have also created some major drawbacks.

The first one is that as management focuses almost entirely on cost saving and rationalization, it leaves little room for innovation, or puts it on the backburner.

The second one is that it supports the assumption that “centralized is better” and that “government can be run like an enterprise”. In this respect, I am particularly concerned with some of the developments that are taking place both at the federal level and in some of the states. For instance the state of Victoria, and – to a lesser extent – Queensland, are pursuing a much stronger centralization strategy than they did in the past. In the former case, a specific organization (CeniTex) has been created , which operates almost as an independent service provider, with a board of governors without any direct representation from departments (which sit in a stakeholder advisory committee, hence with a much less loud voice). Interestingly enough, the “dogma” of centralization may soon be challenged by the reality of commoditization, when individual departments may access technology services from cloud service providers which may be priced more competitively than anything a central provider can offer. Unless departments retain some discretionary power when it comes to procurement (which runs contrary to centralization) they may not be able to get those additional savings.

The third one concerns how IT investments are decided. Australia has a long tradition of effective investment frameworks, both at the federal and at the state level, to drive balanced decisions that take into account different dimensions of public value, i.e. efficiency, effectiveness, citizen service, mission alignment, and so forth. It is not by chance that in a report (access to Gartner clients only) where I looked at good examples of “public value of IT” frameworks around the world, two out of seven came from Australia. The focus on efficiency will inevitably skew decision towards efficiency as being the primary if not the only driver, hence leading to a potential imbalance in investment portfolios.

Last but not least, one of the highlights of Gershon reviews has been that saving money on government operations frees resources to be invested elsewhere. As in Australia investments in broadband will exceed Gershon savings by a factor of 20 to 30, and nobody really knows how beneficial those will be, this casts doubt about how “efficiency” and “effectiveness” ought to be measured.

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Category: shared services in government     Tags: efficiency

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