Evolving all-of government procurement and shared services arrangements will work to the benefit of the NZ Transport Agency, says CIO Craig Soutar. They will also benefit his own experience and career.
Soutar sits on the government ICT Council, a think-tank of public-sector CIOs under private-sector independent chair Sam Knowles, and a major player in devising policies and procedures for all-of-government ICT procurement.
“It’s very enjoyable,” Soutar says. “From a personal perspective it’s a great development opportunity for me and for the others on the council, because it’s never really been done before. From an organisational perspective, in NZTA, we’re benefitting out of collaborating and coordinating with our all-of-government colleagues. And from an institutional perspective — from a New Zealand Inc perspective — our citizens are getting better value for money,” he says
“All round it’s a win-win-win. It’s not easy; I’m not going to paint it as all roses. But in the short, medium and long-term, we’ll win out of it.”
The NZTA is already benefitting from the common approach in value-for-money terms, Soutar says. “One example is procurement; we used to buy about $600,000 worth of equipment a quarter. We’re only writing a cheque now for about $420,000, because of the all-of government procurement deal around laptops and desktops. That is an important win for us.
“Who would have thought that those sort of savings were possible on hardware? Most of us thought the margins were slim. But there are significant savings; and we’re not, I suppose, the least of the recipients out there; there are people probably getting more than we are.”
The hardware procurement scheme not only saves money by bulk-buying; agencies are embarking on a “smart” policy of procurement which means fitting desktop, laptop and handheld devices more closely to users’ actual needs.
NZTA has divided its users into four segments, according to application complexity and mobility requirement. The prime group for reassessment of needs are the so-called ‘de facto’ users, who have relatively simple applications requirements, but express a need for a laptop because sometimes they have to be mobile. A proof-of-concept project last year equipped a sample of such users with iPads. These were well received and the approach is now being spread through the de facto user base.
“Of those 400 laptops, 180 have come up for renewal and 140 of those have been swapped out for iPads; so only 40 of those have made it through to a refresh of laptops,” Soutar says. “And that will keep going.
“I don’t have a laptop and 140 of my colleagues don’t have a laptop any more,” he says. “Something that costs us $3000 a year we replace with iPads that cost us $1500 a year. On the laptop there’s $2000 of hardware and $1000 of software. On these [iPads] there’s $30-worth of iTunes card that bought the software. That’s fit for purpose. That’s smart.”
The first target for shared services will, logically, be other public-sector organisations in the transport sector, such as the Ministry of Transport and Maritime NZ. “Those are the first two we’ve been talking to,” Soutar says. A wide spectrum of possible shared services is being explored, he says. “Hosting, professional services; there’s really nothing being excluded.”
The collaboration starts from a shared vision and comes down to practicalities of working together to achieve common approaches and economies of scale. “We have personnel working in other organisations, helping with software acquisition, better deals for mobile, or around smart desktop or infrastructure as a service [IaaS]. In the last, significant, area, a tender was issued earlier this year for provision of all-of-government IaaS services and in October, supplier contracts were signed with Datacom and Revera.
“IaaS is a great example,” says Soutar; “eight or nine agencies have come together to work out how we’re going to do this. With the recent award we’ve worked out how we’re going to do it; now we’re going to get on and deliver it.”
Moving across sectors
Soutar came to the NZTA after 25 years in private industry. This included six years at ANZ National Bank facilitating the merger and six years at Tower, bringing together disparate IT shops.
There are clear differences in the processes and the culture between public and private sectors, he says. “There’s a difference in terms of procurement. I can’t criticise that; the rules are the rules. But if I were to [pick out] a cultural difference, it’s that [the public sector] is an environment of great collaboration, of seeking commonality and also really good common sense. We’re working together well.
“I’ve come from an environment that was very competitive, very combative; you didn’t share. You treated your vendors like a transaction; you wanted the best deal at the time, then you’d strive for the next deal after that. I found from a common sense perspective, whilst there may be smarter minds in private industry, but here there is better commonality and a drive towards making things better for citizens.”
NZTA faces a heavy workload, summarised in its information systems strategic plan (ISSP). Inevitably some jobs have to be deferred, because of funding and the number of full-time-equivalent positions allowed to the organisation.
NZTA limits what it does in-house to the higher-level aspects such as architecture and the building and vetting of business cases.
“Then once we’ve agreed with the business that this is a priority and it’s going to be funded, it then goes into the next phase of the value chain, which is delivery; and in there we have a highly skilled project management office. We then go out and select the partners we’re going to work with.
“In some cases we have strategic sourcing in place, that is we have our partners agreed. In some cases we don’t and we use the procurement process to work out who that’s going to be.
“That delivery team, through the PMO, then delivers the solution and then they hand it over to a service and operations team that run it. Some of that running is vendor-managed. We may not run it ourselves; we might just service and performance-manage the vendor.”
The plan extends out to 2016. “Key initiatives under way include a new financial management information system. “We’re in the evaluation phase of an RFP process for that,” says Soutar.
“We’re going out to market early in the New Year for a service-oriented architecture. We’re looking for a SOA framework and SOA capability, to help us get a head start. We’re looking for SOA tools — software — and we’re looking for ongoing services to support us.” The move to SOA is inspired by a desire to make it easier to do business with NZTA — customer-to -business as well as business-to-business.
“At the moment it just takes us too long to put in place business-to-business or business-to-customer services.
“We’ve got about 10 or 11 projects that are dependent on a SOA foundation and a SOA capability in place.”
A simple example is putting demerit points online. “You as a driver may want to understand your driving history and what demerit points you have and what risk you have of losing your driver’s licence in future. So that’s a service.
“Then there’s MyNZTA. Commercial transport operators have a lot of dealings with NZTA, yet they’re through different channels and different means; we want to be able to unify that and present as a portal one place to go to do all of that. That is a key project that is dependent upon SOA,” he says.
“If you want to summarise my challenges it comes down to three factors.
“Firstly demand exceeds supply; it always will; so you mitigate that by prioritising clearly and effectively with the business.
“The second challenge is that to maintain supply [you must] attract and retain quality people. That’s what you’d expect of any CIO around town, but it’s a perennial challenge. No matter what the state of the economy, smart people will always have good opportunities.” The attraction of private industry’s higher pay rates is ever-present.
“The third challenge is around the ongoing complexity. The business environment, the legislative environment and many other environments,; and it’s for us to keep on top of that and mitigate it as best we can, not only to have strategies but also tactics to respond to it.
“That’s why, in the ISSP we have what’s called a priority lane and we have a bicycle lane. Sometimes we just have to put things on their bike. We have to cut them and other things you have to rush through.
“So while it’s great to have a roadmap of all the projects that need to happen to align to business goals, we also need to have capacity and capability on a priority lane to do things real quick.
“We have a really good example, well known around town, where Sun/Oracle changed the licensing arrangements for an identity and access management platform. We and a number of other organisations were going to get exposed to a significant uplift in our licensing costs.
“We didn’t see it coming; no-one did; and we turned on a dime and fast tracked a project to deliver a replacement solution earlier this year. That wasn’t planned.
“We went to open source. If we were to crow about anything that we’ve done well, it would be that. Any other agency would.”
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