OK, sure, it is the middle of summer and I was sweating profusely by page 3. But, undaunted by the uncomfortable environment I had created for myself, I was determined to make this read a special experience. After all, Sir Peter is world famous. His last work, “Releasing services to the front line – Independent Review of Public Sector Efficiency” met with rave reviews from luminaries like Tony Blair and Gordon Brown. And after advance readings, locally famous reviewer Lindsay Tanner positively swooned stating,

“Today the Rudd Government announced that it will implement in full the recommendations of Sir Peter Gershon’s review of the Government’s use of information and communications technology (ICT).”

Sadly though, I feel let down. Sir Peter’s work, while being grandiose in scope, suffered from a thin plot line and poor character development. The end result was a work that fell well short of the expectations one would rightly have of this accomplished and respected author. I feel the same way about this report as I did with Baz Luhrmann’s latest film Australia.

Sir Peter’s story is set against a backdrop of weak governance of pan-government issues, insufficient scrutiny of business-as-usual funding, inefficient ICT marketplaces and a disconnect between the stated importance of ICT and the actions in relation to ICT skills.

Into this environment he creates a recommended superhero – the Ministerial Committee on ICT (“…responsible for ICT policies, overall strategic vision, whole-of-government ICT, and the approval of opt-outs). Like all good superheroes, the Ministerial Committee on ICT is supported by a sidekick, the Secretaries ICT Governance Board which has it’s own superpower – a strong mandate from the Government. These two battle the forces of fragmentation and duplication that, to this point, a well meaning but largely disrespected local enforcement agency AGIMO (Australian Government Information Management Office) has been unsuccessful in curtailing.

Sound familiar? It should. This isn’t much more than a thinly veiled rehash of the tried and true “federation bad – centralization good” storyline. What is left unexplored is any nuance in understanding the reasoning behind the actual fragmentation and duplication. To what extent is departmental decision making driven by an honest desire to do good things? And does this decision making represent the shunning of common good or is it borne from the absence of meaningful support to achieve those lofty objectives? We don’t know. As a result, Ministerial Committee on ICT, Secretaries ICT Governance Board and AGIMO – while being framed as just forces of order in a anarchistic world – may ultimately fail in their bid to increase efficiency and cost savings because they eventually become a stifling bureaucracy that exacerbates the very problems they set out to solve.

Unfortunately, plot retreads like this are prone to cliched characterisations. Here again Sir Peter falls afoul of this very problem with a chief protagonist in the story – the IT consultant. With approximately 20% of staff in agencies being “converted” by jihadist consulting firms these IT consultants are draining the government of their knowledge and skills base while costing $94,000 more per annum then the fully loaded cost for ICT staff in FMA Act Agencies. In a burst “you’re either with us or against us” zeal that would make even a diehard fan of the Bush administration wince, the heroes set out to attack the IT consultants with reduction targets (50% in 24months), re-hiring plans along with better recruitment and staff development.

But one wonders whether the heroes are taking a macro-economic sledgehammer to a crack a micro-economic nut. What skills, exactly, are departments rely on IT contractors for? Does this include tough to find business analysts and project managers? If so, then is the government’s own compensation model to blame for the problem? Do these people actually want to work in the public sector or do they have better options elsewhere. Because this is a multi-faceted issue this whole dimension of the story is utterly unbelievable.

Like fellow compatriot J.K. Rowling, Sir Peter has left ample room for a follow up report. Based on the safe and uninspired plot line in this work I feel safe in predicting what will come next:

• The government will have initial success in reducing costs and consolidating data centers but not as a result of the efforts of the Ministerial Committee on ICT, the Secretaries ICT Governance Board and AGIMO. Instead it will be achieved by departmental CIOs who are committed to working within the spirit of the report which, to some extent, will be driven by their individual desire for professional recognition.
• After the low-hanging fruit has been picked, aggressive targets for realigning Business as Usual costs, system consolidation, and IT consultant reduction will be met by gaming the numbers.
• Within 18 months of being established, the Ministerial Committee will be spending as much time, if not more, managing requests for opt-outs then they do on establishing strategic vision and whole-of-government ICT policy.
• Barring a wholesale collapse in the Australian economy and a significant increase in unemployment, the skills crisis will remain largely as it is today.

All up I’m giving Sir Peter’s work one and a half hot cocoa mugs out of five.

One point that Stevens made was the the current challenge most IT services organizations face is how to globally integrate delivery. Inherent in that statement is powerful observation on the continuing globalization of our industry. The global re-distribution of IT skills, which started as an Indian phenomena, is spreading to places like China Vietnam, the Philippines, Eastern Europe and Latin America. But the market is not primarily evolving through a set of discrete national suppliers but rather as a set of global talent distributors whose core competency is built around the recruitment, retention and deployment of low relative cost skills into high cost markets. Integration of these disperse skills is critical to making the model work and is being hotly contested both by Indian companies like Wipro and TCS and organizations like IBM.

But Stevens also pointed that the future was ultimately about globally integrated capability. And inherent in that statement is an even more powerful observation on the globalization of the economy. An example he used was the automotive industry which itself is seeing a distribution of core competencies across the world – PLM in Toyko and Cairo, AISC in Stuttgart, MPS in Shangai and light vehicle MSS in Detroit and heavy vehicle MSS in Peoria. Global delivery integration, therefore, is really just a stepping stone that allows IT skills to be aligned to regional competencies while integrating across the globalized supply chains of these types of customers.

There was a certain serendipity in hearing this perspective the day after Paul Krugman one the Nobel prize for Economics. Krugman’s work looked at trade patterns and the location of economic activity. Here’s a snippet on his work:

“Traditional trade theory assumes that countries are different and explains why some countries export agricultural products whereas others export industrial goods. The new theory clarifies why worldwide trade is in fact dominated by countries which not only have similar conditions, but also trade in similar products – for instance, a country such as Sweden that both exports and imports cars. This kind of trade enables specialization and large-scale production, which result in lower prices and a greater diversity of commodities.”

As the world becomes more astute in understanding the dynamics of globalization it is only natural to expect that the IT industry will evolve to better reflect the impact of this trend on its own consumers. Globalization begets globalizaiton.

Not to downplay the seriousness of what’s going on it but CIOs here are focused on supporting the business and the business is focused on a robust domestic economy. Being based in Australia myself this is very consistent with the conversations I’ve been having with IT leaders around Asia Pacific.

The old addage that when America sneezes the rest of the world catches a cold might still play out. But if IT sentiment is anything to go by it appears that the contagion might very well be isolated.