Tom Burton: what Taylor's digital transformation agenda means

By Tom Burton

December 16, 2016

The federal government’s new transformation vision and roadmap creates a much-needed, system-wide architecture, promoting the use of off-the-shelf cloud applications, and if successful, the most significant simplification and automation of back office processes in a generation.

If successful it also promises a major overhaul of the core operating model of government, consolidating government services onto half a dozen central platforms and with it the core administrative functions currently carried out by over 900 separate agencies. 

The architecture was developed by previous Digital Transformation Office CEO Paul Shetler, but has now been embraced by Digital Transformation Minister Angus Taylor. It fundamentally challenges how business is now done in the national capital, pushing for a consolidated technology stack for all agencies, breaking the infamous “Canberra” model where agencies have been free to develop and build their own myriad systems.

It lays out a model where providers contest to offer all-of-government services through apps that integrate into core government systems. These systems are proposed to be off-the-shelf, ready-to-go cloud based applications, rather than the bespoke proprietary solutions agencies and their vendors have been struggling to maintain and develop for several decades. These applications can power notifications, payments, and data exchange and will be disposed of as new apps come onto the market. This suggests a very different procurement model, built around subscribing to software as a service and using supporting third party service providers to drive innovation and change.

The new agenda maintains a focus on improving digital services, albeit with a far less ambitious timetable to that originally laid out by Malcolm Turnbull to convert most major services to fully digital by 2017. This now stretches out into the never never.

We know from the UK a program of this scale will need strong and consistent leadership, from ministers but also from the bureaucracy.

The big change is the commitment to overhaul the underlying processes that will power these services. At the Commonwealth level, apart from the Australian Tax Office, there is very little automation of processes, or what is known as ‘straight-through’ processing. Instead, vast armies of bureaucrats manually administer a complex web of legacy back-office technologies and procedures.

This thwarts efforts to offer citizens and businesses cohesive, intelligent, joined-up services. Instead, users are left having to navigate multiple agencies and jurisdictions to carry out simple tasks such as registering a business or changing interstate automobile registrations.  

These procedures are often mandated by a massive set of legacy regulations that have been promulgated over many years by governments of different flavours. The welfare system is the poster child example, where benefit rules have been changed over decades to better target payments and to limit double dipping and perverse means testing rules. This leaves a spaghetti of complexity which is almost impossible to automate.

The new agenda commits the government to challenging and reforming any of these processes standing in the way of simplification and automation.

For ministers — and the Parliament — this will require a very different approach to reform and frankly a far more sophisticated focus on business process reform. This work is unsexy, complex and hard yards. In the 1990s we were able to reform a number of tax and welfare benefits by paying off the losers. With tax revenues now heavily constrained, that option is no longer feasible and so politically it will take a far cleverer approach to reform than has been evident to date.

We know from the UK this will need strong and consistent leadership, from ministers but also from the bureaucracy. Without it, the big agencies will resist being herded into a process that will see them lose their operating autonomy in the name of a still-emerging whole-of-government transformation play.

For ministers — and the Parliament — this will require a very different approach to reform and frankly a far more sophisticated focus on business process reform.

This leadership will need to come from the centre if the digital vision laid out in the new agenda is to succeed. This implies a major lift in capability within the organisation charged with making all this happen, the Digital Transformation Agency, and its host department, Prime Minister and Cabinet. The government is on the hunt for a leader who can drive this change as CEO of the DTA, to replace interim CEO Nerida O’Loughlin. She is widely tipped to lead the Australian Communications and Media Authority next.

Part of this change will be a far greater focus on data and measuring and managing how well services are performing in real time. This will require a significant change in culture, with Canberra’s big agencies (the so-called D8) traditionally highly reluctant to publicly reveal their day-to-day performance, let alone their success in driving outcome change.

Witness the anemic attempts to date to publish any meaningful, real time data. Other than removing funding, government does not have many internal signals to force large scale change, so creating highly visible operating and performance metrics becomes critical, if whole-of-government transformation is going to happen quickly.

The risk otherwise is a decade of inter-departmental committees slowly merging and automating services and processes, leaving government even more of a digital laggard, and with it, citizen disenchantment.  

The model outlined by Taylor also aligns strongly with the government’s push to open up services to outside providers through provider contestability, shared service reform and broader public management reform. This moves Canberra from a ‘fortress government’ model, where the public sector builds and operates its own systems, to one where it drives innovation and service improvement, working with third party providers, commercial and community.

That requires a much more sophisticated brokering and entrepreneurial approach to building public sector economies and thriving ecosystems to support the delivery of services and programs. The national disability scheme is the latest version of this thinking and the struggle to align this provider strategy with the realities of clunky procurement and technology systems has again revealed the need for very different skills if this vision is to succeed. 

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