- 14 June, 2005 09:16
NSW and Victoria have both welcomed new state CIOs this year, but the rest of the country is watching to see if they can make a difference.
The media loves a good war of words, so it is little surprise that criticisms in a keynote at Gartner's Agile Government roadshow were reported as a direct attack on New South Wales's first-ever CIO.
In his speech, Gartner government managing vice president John Kost weighed in on the then-recent appointment of CIO Paul Edgecumbe, a Department of Education and Training (DET) veteran whose selection as NSW's first chief information executive kick-started a period of significant change in the way the state handles IT strategy.
Edgecumbe is not Australia's first state CIO; that honour belongs to Patrick Hannan, who left the top IT job at the Department of Defence to become Victoria's first state CIO in December 2003. Hannan's potential glory was short-lived, though; he left the job just a year later, putting Victoria's plans for change on the backburner until the state was able to lure high-profile CIO Jane Treadwell away from her well-lauded position as IT chief at Centrelink.
When Kost was speaking about NSW's CIO position, however, Treadwell had yet to be appointed - and Kost was less than certain that Australia's then-only state CIO would succeed in the role the way it had been defined. "This model has not been met with that much success in the past," Kost told attendees at the Gartner roadshow. "I'm not saying he is going to fail, it's just that based on past experiences there is a good probability that it may not work."
The fact is that few people - including Edgecumbe himself - are sure just how the new role will shape up and how effective it will be. Yet of all potential observers, Kost is probably among the best qualified: as the first state CIO appointed in the United States, he has been there and done that. From 1992 to 1996, Kost served as CIO for the state of Michigan, that country's eighth most populous state.
During his tenure, Kost drove a fundamental restructuring in the way the state's information assets were managed. Data centres were consolidated, procurement processes updated and other initiatives executed to lay down a framework for increased functional consolidation between the state's myriad individual agencies.
The strong support of then-Michigan-governor John Engler, whose 12-year term began in 1991, was crucial in allowing Kost and his team to drive change throughout the state government, which like any bureaucracy was not known for its love of change. In the US, however, gubernatorial decisions hold considerable sway, so Engler's ongoing support of Kost and his mission helped ensure the position retained the authority needed to get things done.
"When you create the CIO position for the first time, everyone in the bureaucracy is thinking 'is this important or not?'," Kost says. "I had complete responsibility and oversight of what I was asked to do. The governor gave me the whole procurement process too, because he wanted that fixed. There was no way for anyone to skirt my policies or decisions, and they couldn't buy anything or spend any money without my approval. If the CIO is regarded as important by political leaders, it helps to send a signal."
Recipe for Success?
In intervening years, more than 40 other US states have appointed CIOs, but many - more than half, by Kost's account - have not been anywhere near as successful. Lack of political clout, territorial defensiveness, questionable reporting structures and changing priorities due to changes of government have compromised the efficacy of many CIOs, who should by all rights be significant forces for positive change.
Therein lies the crux of Kost's argument at the Gartner conference: in NSW; the position of CIO has been created within the Department of Commerce. Edgecumbe reports to the deputy director-general, Office of Government Procurement, who in turn reports to the director-general, NSW Department of Commerce. As Kost pointed out, the CIO role within NSW has thus been buried within a procurement organization.
This is not completely surprising given that IT accounts for $1 billion of annual spend in NSW, but for Kost it is an indicator of potential failure if Edgecumbe is not given enough clout to get his job done. "From what I've read, I think Paul Edgecumbe has tremendous skills and capabilities, but my concern is about the organizational structure of the NSW government," Kost explains.
"It appears the state is more concerned about procurement failures than about the successful enterprise management of IT. As far as I can tell, the justification is that there will be a tighter working relationship between the CIO and purchasing [executives] to make sure that the right projects are undertaken and that they're procured in the most appropriate way. These are perfectly valid goals, but it's rather organizationally restrictive. It could be that NSW has simply said they have finite expectations for the position."
The most successful and effective state CIOs, says Kost, have been those in a situation where they report directly to finance executives, who combine high-level executive clout with the business sense to balance IT strategizing. This could bode well for Treadwell, who is still feeling her way around Victoria's bureaucracy after moving into the CIO's office on May 1. She reports directly to the Victorian Minister for Finance, an arrangement that will give her broader scope than Edgecumbe and the ear of some of the state's most powerful ministers. This position may well, in turn, give her the clout to introduce real change in IT strategy within that state.
Interestingly, South Australia - which is currently formulating its plans for a state CIO with responsibilities based loosely around Victoria's model - has indicated that its evolving position will most likely be handled within the Department of Infrastructure. Its CIO, however, looks to be involved both in IT strategy and tasks like procurement and project management; in Victoria, these responsibilities have been handed to CTO Tony Aitkenhead, who entered that role at the same time as Hannan and is overseeing massive projects including Victoria's Telecommunications Purchasing and Management Strategy, Project Rosetta and Victoria Online.
SA's approach reflects a fundamentally different philosophy about the nature of IT from NSW and Victoria, where the ties with Finance reflect the perception that IT is largely a purchasing expense that must be carefully managed. Placing responsibility for IT strategy within the Infrastructure portfolio implies a different level of support for the CIO's role. Kost is optimistic about this approach, but whether or not it works more effectively than the NSW and Victorian strategies is anybody's guess at this point.
Leading by Consensus
Part of the difficulty in talking about state CIO roles in Australia stems from the fact that the positions are simply still so new. All eyes are naturally on these high-profile positions, both to see how they shape up over time and to see whether they can rein in the notoriously decentralized management of IT within state governments that have typically relegated IT strategizing to individual departments.
Edgecumbe knows that overcoming this silo mentality is going to take more than just chest-thumping. Rather than taking on an "enforcer" role, he is striving to make the CIO position into more of a facilitator for productive exchange between other NSW departmental CIOs. This will happen through the newly created CIO Executive Council (CIOEC), which will bring together the 20-odd state CIOs on a voluntary basis to discuss ongoing strategies, best practices and difficulties.
Together, Edgecumbe believes the CIOs can work out a mutually beneficial strategy for moving forward that is built around a common shared services infrastructure that will allow departments to concentrate more on their specific areas of activity than having to be experts in IT. "It's very difficult to know what other CIOs are up to, and what they can do for you," he explains. "You can become very isolated and inward thinking with regards to your agency - but agencies are the ones that tackle the problems that have to be resolved, not my office.
"My office will be about hopefully providing leadership in those areas and facilitating development of a government-wide strategy. Having got that in place, some of the burden of their workload should be lifted from them. If someone had said to me, 'This is the way we're going to do XYZ', it would have made my life simpler because I could then have concentrated on what was important to education."
However, developing strategic consensus may be likened to herding cats. Each CIO coming into the CIOEC will have their own legacy IT environment and strategies, and getting them to give up their autonomy for the common good may take more than goodwill and free coffee.
A recent undertaking at the NSW DET illustrates why this issue will persist in the long term. Under Edgecumbe's leadership, DET invested $33 million to provide lifetime e-mail addresses, mail filtering and hosting to more than 1.3 million students and staff across the country. That system, implemented by Unisys in a contract that is up for renewal this year, is based on Microsoft Exchange. Would DET be pressured to give up that investment if the CIOEC decided that a mail system based, say, on a centralized Oracle database was a better approach?
In such a case, migration to Oracle or any other system, "doesn't have to be done immediately", Edgecumbe allows. "It's a long journey. In the long term, I'd like to have a strategy [in which] future technologies are separated between those that we can take advantage of, technologies we have to deploy no matter what, and technologies that will create a problem for us - and how we can resolve that problem. I'd like [to think] that I will have been instrumental in diverting ICT resources into core agency business, not back-end systems."
The level of buy-in to the CIOEC remains to be seen, but Edgecumbe is not plucking the idea from nowhere: in the US, a similar body, the Federal CIO Council, has for the past decade provided a public forum uniting CIOs from 30 different federal government agencies. In that country, IT spending takes on a whole new meaning. The US government will spend $US60.9 billion ($A78.3 billion) on IT this year, compared with approximately $5 billion spent by the Commonwealth government and $1 billion in NSW, the country's largest state consumer of ICT.
Such tremendous levels of IT purchasing would seem destined to breed provincialism, in turn hindering the unifying efforts of the Federal CIO Council. Further, a recent US Federal Computer Week survey found that just 16.8 percent of respondents felt that council was an effective organization, with 22.4 percent arguing it was ineffective and a surprisingly high 60.8 percent of respondents saying they had no opinion. Clearly, indifference or antipathy dominate amongst that country's departmental CIOs - a finding that clarifies the extent of the challenge that Edgecumbe faces.
Edgecumbe concedes it will take an effort to convince what are often large and disunified agencies to shift their own IT policies towards a common standard. A failure to grab and retain the ideological support of departmental CIOs could well fulfil Kost's warnings and turn the CIO role into little more than a figurehead for procurement efficiency.
However, Edgecumbe believes that framing the CIOEC within terms that are acceptable to most CIOs will point the stakeholders towards mutually beneficial outcomes - whether or not his role within the bowels of the NSW Department of Commerce's procurement organization proves to be a help or a hindrance.
"The most critical part is to figure out what opportunities and technology are coming our way, creating this NSW government strategy which may say 'in five years' time we want to get to a certain point with payroll or finance', and [helping] each of the agencies figure out how they can migrate to what that strategy says over the next five to 10 years," he says. "If the [CIOEC] is effective, I'm effective regardless of which agency I happen to be sitting in. Having said that, ICT is a very large procurement customer, so any efficiencies we can get from procurement have got to be a good thing."
Whether they're organizationally relegated to procurement or not, state CIOs must develop a clear set of priorities for their time, then work to implement those priorities in a way that can transcend the ephemerality of political parties. Should the Coalition ever reclaim the NSW government, for example, any work done under Edgecumbe's watch could easily be undone by a successor.
This was a common problem in the US when IT-savvy governors were replaced with successors having far different priorities, Kost warns. CIOs also must deal with potential heavy-handed demands from ministers that expect priority for newly announced policy initiatives that may require significant IT support in a short period of time.
Another major issue for state CIOs will be the sheer magnitude of the scrutiny on their position. Whereas private sector CIOs can plan IT strategy relatively free from the prying eyes of outsiders, traditions of government transparency and consultation are likely to see Edgecumbe, Treadwell and future state CIOs fielding significant input from special interest groups and industry lobbyists each having their own interests.
Two topics certain to be hot buttons in the near future are open source - particularly after the Australian Government Information Management Office's (AGIMO's) April release of its open source procurement guide fuelled interest across all levels of government - and participation of local small and medium enterprises (SMEs) in government contracts.
The latter issue has been ongoing for years, and Australian Computer Society national president Edward Mandla believes the appointment of state CIOs will provide the opportunity finally to clarify the government's position on the issue. Mandla points to recent Queensland government contracts, awarded to SAP even though the state is home to enterprise application stalwarts Mincom, Technology One and Orion, as examples where local industry development considerations have been ignored for seemingly arbitrary reasons.
"I find it difficult to believe that three Australian companies that designed payroll from the ground up over 10 to 15 years would be deficient [compared to SAP]," says Mandla. "If there's hardly any difference, I'm finding it difficult to see why [government buyers] wouldn't support local vendors."
States should clarify their feelings on SME development, Mandla argues, so that those SMEs can either work more closely with government agencies to ensure they are filling real needs, or so that SMEs can simply know once and for all that the government is not honestly committed to development of indigenous vendors.
"If a CIO could clearly articulate what they saw the problem was, you've already got researchers who could go invent something to be aligned rather than inventing something in the dark. Yet to my knowledge, no [SMEs] have ever been debriefed [after losing a contract] at a level of high enough granularity that they could go back and make changes."
Perhaps Mandla will finally get his wish through Edgecumbe. The new CIO is well aware of the argument for SME development, and has already committed himself to fostering closer collaboration between the IT industry and the NSW government. In this way, he hopes to both clarify expectations and to add an element of predictability to long-term planning, a theme that has already emerged as a cornerstone of Edgecumbe's tenure.
"It's about forming partnerships with industry, not just beating them up about costs," Edgecumbe explains. "The large companies know what other governments overseas are doing, and they know what technologies are coming our way. Any guidance we can get from industry will help us be more proactive, and if key players out there are developing systems, it would be nice if they had a thorough understanding of the needs of the NSW government, especially if they're a fairly small company and don't have the resources to do that sort of R&D. They may come to us and we can encourage that industry."
The New Government CIO
Whether or not Edgecumbe is able to encourage a spirit of sharing amongst NSW's widely divergent CIOs remains to be seen. What is clear, now, is that his consultative approach is intended to inspire new debate about the proper role of IT within the state government, and the most effective way to deliver that. Edgecumbe envisions the role will also involve close consultation with his peers in other states as they are appointed - although with Treadwell still the only other state CIO yet reporting for work, those meetings would be small gatherings indeed.
Indications are, however, that the idea of a CIO with broad responsibility for IT strategy is becoming increasingly popular across all levels of government. After more than a year of election-fuelled delays pushed the issue to the backburner, AGIMO recently advertised for a whole-of-government CIO position that will, when it is eventually filled, anoint the most powerful IT leader in the country.
AGIMO's search, and the inevitable efforts of governments in South Australia and any states that follow the model in the future, will continue to fuel debate both about what the CIO's responsibilities should be, and just what type of person is best suited as a state CIO. That Edgecumbe, Treadwell and Hannan all came from large government organizations suggests a preference, so far, for seasoned executives that know how to navigate the minefield of bureaucracy to get things done.
That is a good thing, at least in Kost's eyes. "The track record of CIOs brought in from the private sector is abysmal," he explains. "They fail to understand that there are some things about government that are different. Government is a political animal and has these very unique business processes. Unless the CIO coming in from the private sector understands those and understands they will rule their lives, and embraces that, they are going to fail."
Assuming this policy continues, further state CIOs are likely to be hired from within rather than being sourced from private sector positions. That may ensure political success, but can it drive a revolution? If government CIOs are being promoted from within, however, can they really pilot the states through minefields of bureaucracy to effect any real change? Can they ultimately be effective in bringing government IT to the level of private sector-style accountability and efficiency that is necessary? Or will they be simply paper tigers, sitting in ceremonial roles from which they are unable to do more than growl at departmental CIOs that retain their previous power?
The long-term changes that centralization of IT decision making will introduce in NSW and Victoria have yet to be seen. A half-hearted approach to the CIO role could lead states up the garden path with very little to show for it. Certainly, both Edgecumbe and Treadwell will carry the weight of expectation on their shoulders, and their perception of the roles is likely to change significantly as they settle into the jobs.
"As you enable the business, you have to become more of an educator and lobbyist," says Mary Ann Maxwell, managing vice president of executive programs with Gartner, who spent four years as CIO of Westpac and knows that private sector concepts like operational efficiency and service can become muddied when the uniquely governmental issue of political return is thrown into the mix. "These are multiple jurisdictions that often have turf battles and have a little bit of legislative fiefdom to them.
"The whole-of-government CIO role as I see it is to start driving out of this limited consolidation environment to a more consolidated services environment, then maybe move up that food chain," Maxwell continues. "It's a role that has to find a balance between different agencies and different projects, strategic versus tactical, and so on. The basis is change, and the CIO just has to know how to use influencing and relationship skills more strongly than they might have to do in a private environment. [The state CIO strategy] is the right place to go; the only question is: how do you do it right?"
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