Cabinet takes tighter grip of $2 billion IT spend

Govt departments to be encouraged to use shared services

The Government will take a carrot-and-stick approach to coax departments into making better use of the $2 billion they spend on computer systems each year. This was revealed in a Cabinet decision yesterday, which was signalled by Computerworld earlier this week. Internal Affairs Minister Nathan Guy said the Cabinet had approved a policy that meant departments could only opt out of using shared services and centralised purchasing of technology if they could show a "compelling business reason". The Treasury will report back to the Cabinet by March on providing incentives to chief executives to toe the line. A Cabinet minute showed that some large agencies, including the Police, the Defence Force, the Justice Ministry and the Social Development Ministry, had raised concerns about the change to an opt- out regime. They said the practical and cost implications needed further consideration. Internal Affairs chief executive Brendan Boyle, who will take over as Government chief information officer from State Services deputy commissioner Peter Brown in February, said the agency's concerns were understandable but could be overcome. The new policy did not go as far as saying "thou shalt all do the same thing", he said. "It acknowledges . . . you need a certain degree of flexibility. "The reality is that if you have got good (shared) products and systems that you can use, then start there. And if they don't meet the need, then prove the case." A 2008 survey by the State Services Commission found 80 per cent of the Government's $2b budget for computer technology was spent keeping systems running and only 20 per cent on new initiatives, and that some of that spending was "fragmented". Efforts under way to rationalise spending include the construction of a single system to check the identity of people accessing government services online and centralised purchasing of computer equipment and datacentre capacity. Some past attempts to improve efficiency have failed. GoProcure, a central system to let agencies buy products and services online, was scrapped in 2003 after $2 million was spent on the system. The first effort to create a shared network for government communications, the $28m Government Shared Network, was abandoned last year after the State Services Commission racked up multimillion-dollar losses. Mr Boyle said the willingness of chief executives to collaborate had since improved. "Everybody is under a lot of pressure in terms of budgets." Brett O'Riley, chief executive of industry group NZICT, said it welcomed efforts to seek public sector efficiencies. - Additional reporting by David Watson

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