Senate split on Digital Transformation report card

Report highlights significant legacy systems challenge

A Senate Inquiry into “Digital Transformation” has issued a report that is highly critical of the Australian Commonwealth Government’s efforts to date, although the report’s conclusions are firmly split along party lines.

With an ALP/Greens majority on the committee, the final report was predictably scathing of the Liberal-National coalition government.

It “considers that the government has not demonstrated that it has the political will to drive digital transformation.”

“It has become clear to the committee that digital transformation is a policy area beset by soaring rhetoric and vague aspirations by government, largely unconnected to the actual policy activities actually undertaken,” the committee’s majority said.

However, a dissenting report from the minority of Government senators on the committee argues that “there have been hundreds, if not thousands of digital projects, both large and small, funded by the government that have been delivered successfully … the very few examples handpicked by the committee represent very much isolated unfortunate exceptions against a background of high performance in the delivery of digital solutions.”

The report includes a lengthy section attempting to define “What is 'digital transformation' of government services.” It does not reach any firm conclusion.

Committee Chairperson, ALP Senator Jenny McAllister, puts forward a utopian vision for the promise of digital transformation. i.e. “that technology will open up new policy possibilities and allow government to make a real impact in people’s lives more effectively, efficiently, and frictionlessly.”

A large portion of the report is devoted to four case studies, three at the Department of Human Services (DHS) and one at the Australian Taxation Office (ATO).

The ATO web site outages of 2016-2017 were highlighted, however this was caused by a network hardware failure and not a particular product of any Digital Transformation efforts.

The DHS came in for some severe criticism over the expense and ongoing delays in the replacement of a legacy application for child support, a program that was initially to be completed by late-2015 but was finally suspended in mid-2018 with over $A100 million spent so far.

However once again, this was not specifically a Digital Transformation initiative, it was undertaken because a legacy system was nearing end of life.

The Committee received many submissions highlighting the extent of the legacy issues that are hampering digital transformation efforts within Commonwealth Government agencies.

“A number of department and agencies' submissions demonstrated the difficulties arising from 'legacy' systems, such as new systems being overlaid on outdated hardware which in turn have been subject to ad hoc iterations of updates and upgrades, as well as outmoded business processes, and security vulnerabilities arising from old technologies,” the report notes.

A 2015-16 ICT trends report found that 44 per cent of the government's major applications are over a decade old and that 53 per cent of the government's desktops and laptops are past the end of their planned useful life.

Ian Brightwell, former CIO of the NSW Electoral Commission, noted that ICT program failure in the APS is due in part 'to poor backend infrastructure and systems upon which to build online systems'.

The DHS’ legacy ICT systems are now over 30 years old.

John Murphy, DHS Deputy Secretary, Payments Reform, noted that “… essentially, the environment that we're working in is one that was largely designed back in the seventies, eighties and nineties, which was largely constructed around paper and telephones and largely based on face- to-face interactions. I think it's fair to say that that mode of operating has largely continued. I think we would all recognise that, in this day and age - particularly around customer expectations of digital, simple, clear, easy-to-use, safe and available anytime, anywhere - that is a very, very difficult proposition for the delivery of welfare without a fundamental change.”

The National Archives of Australia (NAA) reinforced the legacy challenge with its estimate that almost 40 per cent of Commonwealth agencies have not implemented a program for assessing, keeping, migrating or destroying their digital information.

“Additionally, over half (52.4 per cent) of agencies reported in 2016 that they lacked the business processes and systems to enable the migration (transfer) of relevant digital information to the Archives. Also of concern is the low number of agencies which have not identified the cost-benefits of managing information digitally, with just 2.4% doing so in 2016.”

Paul Shetler, former Chief Executive Officer at the Digital Transformation Office, along with former colleagues, submitted that, “The Australian Government should develop a clear understanding of legacy applications. Legacy applications are not limited to old technologies. They may include systems that are still current, but whose vendors are unable to support government’s future technology vision. As a whole-of-government initiative, there should be clear pathways and timelines for transitioning to a modern technology architecture, with regular reporting to these plans

“Legacy, poor architecture and non-standard projects slow down or work against the transformation of government services; wrong methodologies, inappropriate outsourcing, wrong/incompatible/obsolete technology make things worse. Departmental inertia is such that spending needs to be controlled so that departments are delivering the right thing, the right way.

“Our experience working in digital transformation in the United Kingdom has suggested that providing a single agency with spend controls over whole-of-government digital products is the best way to ensure coherent and consistent service delivery. Digital teams should be required to regularly report on project methodologies, timelines and achievements to date in order for funding to be continued.”

The Digital Transformation Agency has been allocated funding of $A33.5 million to undertake its lead role until 2019-20. It has oversight of all ICT projects worth greater than $A10 million.

The Senate Committee report concludes that “Its contribution is muted because its role is confined to the level of assistance with discrete projects at the operational level.

“Even there, its involvement is limited.  At the time of its creation, it was intended to operate as a 'powerful new program management office' that would track ICT and digital projects across the whole of government, stepping in to remediate where things are not working. In reality, it had only a minor role in the case studies examined by this committee.”

Government senators disagreed “with the majority view that a centralised mega-agency is the answer to the whole-of-government approach to digital transformation of government services.

In their dissenting report, Senators James Paterson and Amanda Stoker write “Such an approach to digital transformation is rooted in the old command-and-control view of the public sector that does not acknowledge the need for active engagement, flexibility and collaboration. The functions of government departments and agencies are diverse and distinct and it is important that the relevant corporate and policy expertise and knowledge are harnessed when transforming service delivery.

“Where appropriate, Government senators support an approach where departments and agencies have the ability to build digital platforms and solutions to meet their particular portfolio programs. Such platforms and solutions should be leveraged as appropriate across the government and more importantly, should continue to place the users and their experience at the centre.”

The full report is available at