Tech Leaders Forum, Fairmont Resort, Blue Mountains

Release Date: 
19 March 2017
Speech

Good morning everyone.

Well thanks for having me here today, it’s great to be here in a neighbouring electorate to mine. I don’t often get to do this, to talk about tech in a neighbouring electorate to my own. Unfortunately the direct route is through ravenous gorges and flooding rivers so I had to come around the long way, but it is wonderful to be here in the Blue Mountains regardless albeit on a very rough day.

It is exciting to talk about the digital agenda in government now because it is broad ranging and it is changing very very fast. And what I want to convey to you today is the broad ranging nature of the agenda and the pace at which government, which is let’s face it a big beast, a big bureaucratic beast, the pace at which it is changing on this front and with that change I think comes very significant benefits for citizens, for business and of course for government itself.

We have already seen how digitisation can transform lives for citizens, for anyone who has entered the country lately, particularly in the last few months, they will have seen the SmartGate system in all its glory. Big change from a year ago when I first came through with my family. I came through again this year with my family and the difference was just extraordinary. After sitting on a plane for 16 hours you really don’t want to stand in a queue, but you don’t have to now. The way that is working is just a fantastic illustration, a small illustration but a very important one I think, of how government can make life easier.

And for the government there are benefits, alongside the satisfaction or increased satisfaction of citizens and those benefits are important of course. Deloittes estimated that the total benefits to citizens, businesses and government from just digitising half of what hasn’t been digitised yet  across all levels of government, is about $27billion, so it’s a big prize. I think there’s much more in it than just that and that’s why this is an important agenda.

That and more examples of why I think the digitisation agenda is and should be a bipartisan issue, we may disagree about policy objectives, but the delivery I think should absolutely be bipartisan.

The rush I say to digital is extremely important but it shouldn’t be at the expense of those who aren’t capable of going digital. So everything we do needs to be seen as an omni-channel strategy, as one that actually links the digital to the non-digital and still provides opportunities for those who aren’t going to go online and some aren’t in their lifetimes, let’s face it, that those opportunities remain.

Now I’ve been in this role for about a year now and I’ve got to say it’s getting a lot easier to give these speeches because you can talk about successes and lessons as well as future plans and I want to do a bit of both today.

I’m happy to report there have been some great successes and some lessons in the last 12 months. I think we’ve achieved a lot. In data, we’ve fused the National Map and data.gov.au with a goal of creating the world’s leading open data infrastructure. This is I think an extremely important agenda item, you know as we open up data, we open up opportunity, opportunity for citizens, for entrepreneurs and that opening up of data  I see as hugely important and the Prime Minister who I am assistant to, directly to the Prime Minister, he sees this also as a crucial agenda.

The work we’ve done has enabled people to explore about 20,000 datasets that we’ve made available under that open data agenda, very little of this had been done before we got in to Government. And we’ve seen how as well, we’ve seen agile projects and methodology starting to proliferate through the Commonwealth. I’ll talk more about that in a moment but we’re starting to deliver lots of projects just like the SmartGate project that I talked about a moment ago.

Some of my favourites that are happening or in the pipeline – the business simplification agenda which the DTA is jointly pursuing with the Department of Industry, very very important in terms of just making it faster and easier to set up a business or to drive changes in a business - big improvements in the vision and operation of myGov, I’ll come back to that in a moment  - the Gold Coast Hospital Medicare exemplar allowing people to automatically register their newborns into Medicare at a time in their life when the last thing they want to do is go to a Centrelink office. Let’s face it, I did it four times and it was not fun. When you start to accumulate these small changes, user driven changes to the way government works you really do make a big difference – and the Digital Marketplace, which I do want to talk about more because I see this as absolutely essential to driving entrepreneurship in the digital government sector in Australia.

So we have delivered real change and reform but as you all know it hasn’t all been smooth sailing. We’ve learnt some real lessons from projects like the Census and the recent outages at the ATO, but most importantly they are leading to real reforms in the system and that’s the key for me. You will always have issues in IT, but how you respond to them is the test. The DTA (Digital Transformation Agency) now has the power to review and oversee projects in a way that has never been done before. This is a critical point. No government of either stripe has had the strategic overview that this Government is now conducting into the Australian people’s multi-billion dollar investment in IT and we are investing. After years of stagnation in the ICT spend across Government allowing systems to become badly rundown, we’re investing in the last 12 months $3billion more per annum in ICT than the previous year. That’s a total investment of over $9billion a year, $9billion a year, that’s 50% more as I said than ever before. So this is a massive upgrade of the Government’s IT infrastructure and IT services.

Now, does all of that mean there’ll never be an issue for the wonderful journalists to write about again, I know how much you love it, well anyone like me who’s spent their life in and around both mature IT projects and start-ups, that has defined much of my career, know that there will always be issues, that’s the reality, we all know that. If you look in the news at some of the biggest companies in Australia and indeed around the world, like Samsung, Amazon, Telstra and of course the IBM outages, issues in IT implementation can, do and will happen. But importantly what we are positioning the Government to do is i) manage risk better than any Government in the past  ii) deal with the questions expeditiously iii) increase the likelihood of success for projects, I’ll come back to that one in a moment and iv) learn from our mistakes.

There are really two important aspects in which we’ve adopted, or two principles we’ve adopted, to underpin the changes we’re making. First, we are squarely focused on applying an agile methodology in new projects and where we can in pre-existing projects. Before the DTA and its predecessor, Agile was largely unknown within the Commonwealth and for anyone who has worked in large organisations and knows how hard it can be to bring change at such a large scale, this has been a really truly impressive achievement. And as importantly as that agile methodology, we’re working to break up projects to better understand our technology investment and work with Ministers and agencies to improve their proposals, breaking them up into much smaller, more digestible pieces.

Now I think these changes are having and will have profound implications. Most importantly we know and all of you I’m sure know the success rate for smaller, agile projects is far higher than big traditional waterfall projects. The Standish Group has done what I think is probably the best research on this, 50,000 projects around the world. They concluded that the number of untroubled or failed projects that are done as big waterfall projects is 3%. That’s 3% of big waterfall projects that don’t have major issues or indeed complete failure. Whereas 58% of smaller, agile projects are untroubled. So that is a stark statistic and I think absolutely critical to the way we are thinking about Government digital and Government IT.

In addition, if a smaller, agile project gets into trouble, it can be refined quickly and the consequences are much more manageable. So that’s again absolutely crucial to our thinking of how we should do digital and IT within the Commonwealth and hopefully in time across all levels of government.

The DTA has only had this review and oversight capability up and running for a few months, so it’s early days for us having that broad-ranging capability. But we’ve already worked on every new project under development, so this is a very quick intervention if you like and we haven’t mucked around at getting involved. Those projects are worth many billions of dollars over their proposed lifecycle. Importantly in doing that, we are taking a collaborative approach with agencies, that’s focused on improving proposals. It’s far better for us to get involved in projects early and question the business and IT decision  making before the money is committed and that’s what we’re seeking to do. So our initial focus is on these new projects. 

And interestingly the results have been extremely warmly received by agencies across Government. That being said, we do carry a stick. We do choose to not support projects and we’ve already seen a sea-change in behaviour. I’m confident that the series of future projects that are coming on, will bring really significant benefits forward, and that’s the key - early benefit delivery is essential to our thinking and delivers solutions more effectively than has been the case before.

The restructuring of the digital transformation team to form the DTA has been one of my favourite achievements of 2016 and make no mistake, the establishment of the DTA in my view is an expansion of its role that was absolutely needed. It’s important to note that the DTA is still a disruptor and still capable of delivering services and I’ll talk about those in a moment – those are roles that are central but it needs to work with agencies across Government, not against them. It is a big organisation, tough to work in in many cases, but that ability to disrupt alongside a willingness to collaborate I think is the winning model.

Most agencies interestingly and Ministers understand the need for disruption but they also need a partner with the vision and skills to get the job done. And that’s the culture we are working towards.

We’re working as well as that on a range of platforms across Government and those include areas like verification and authentication – that’s streamlining the process of establishing and logging in to services across the Government and ultimately beyond the Federal Government. Tell Me Once which allows users to update their details to Government once, not to each government separately, again if they choose. Notification - which allows Government to improve its engagement with citizens and business. And payments – and that means streamlining payments to and from citizens and businesses.

Because all of these are broken into smaller, agile projects, the changes and benefits will flow incrementally, rather than through a single, big hit, upgrade or implementation.

We’re also working on a range of end user services across the Commonwealth improving far more services than has ever been the case from a central agency before and it’s important to emphasise this agency sits within Prime Minister’s and Cabinet. We have a whole of government focus, as I say, no other Government has chosen to do that before. It is a very fundamental change for the Federal Government. All of this keeps the DTA working in the background, as much as the foreground and I think that’s the way it should be. If we’re going to drastically improve our services it has to be department led and agency led and those departments must and are buying into that change.

Now I want to touch quickly on two projects that the DTA’s worked on and they’re amongst my favourites and I’m sure there’ll be some in the room with a particular interest in aspects of both of these. The first is the Digital Marketplace and the other is myGov.

Now since the Digital Marketplace’s launch in the second half of last year, we’ve had over 250 sellers come on with many millions of dollars of opportunities on the platform. Importantly and this is the key, 93% has gone to small and medium sized enterprises. And that’s what we’re looking for here, it’s just the start.

But I love this project because it demonstrates how technology can level a playing field and the Government can stimulate innovative companies without resorting to hand outs.

You know, if we want to transform the entrepreneurial or digital government sector in Australia, the most important thing we can do is be a better customer and that’s exactly what we’re seeking to do.

As I said we need to go much further; really what we’ve been trying to do is just get a start and work out, as you should with an agile methodology, work out what works and what doesn’t.

We know that by increasing our spend on SMEs we can create a whole new industry in this country.

An allocation of 10% more of our IT spend, let’s face it $9billion is the number I gave you earlier, an allocation of 10% more to SMEs would be one of the biggest investments in innovation in this country’s history.

In money terms it would be double the size of the first round of our National Innovation and Science Agenda.

So that is what we think the Digital Marketplace is such an important start, but ultimately I think will lead to very profound changes in the way we buy.

There are four additional things we know we need to do to build this SME digital government sector:

  • break up projects and their contracts into small pieces. The big tenders that Government has traditionally done are not digestible for Australia’s SMEs. Let’s face it. So we need to break them up into smaller pieces. This is an agenda that the Prime Minister and myself have personally taken on as a top priority.
  • build independent integration capabilities for projects within the government. If we’re going to have smaller projects, we need to know how to integrate and make interoperable those smaller projects  
  • review the use of panels in government. Let’s face it the panel process which the Digital Marketplace is seeking to break down has been a big barrier to smaller companies getting access to government contracts and opportunities, and
  • we need to drive the uptake of the cloud.

These four areas have been identified time and again to break down the tendency to make 'safe' choices. These so called safe choices simply prohibit innovation.

Panels are a good example of a well-intentioned policy decision leading to less than ideal outcomes. Our ICT procurement task force driven from within my area has gathered a substantial amount of data on this problem.

We know that the sweet spot for SMEs is between about 80,000 and 5 million dollar contracts.

That’s the bracket that’s the real sweet spot. Generally those contracts can turn around quickly, allow for single technology solutions and aren't too big.

But it’s also the bracket that’s most heavily used for panels in Government and those panels restrict the competition and innovation applied to the projects.

Largely panels are used in this range because the money is large enough and they have to follow the procurement rules.

But they’re not large enough that they are likely to want a customized solution or large enough that it has real visibility to warrant an intervention from Government. That’s what we want to change and we are changing through the Digital Marketplace.

If we can move these contracts onto an online system that will provide simplicity - but also actually makes new companies visible to Government - then we can unlock a great amount of innovation.

The NationalMap is a great example of how projects in that band level can be delivered better.

I don’t know how many of you know the National Map but if you haven’t seen it, I encourage you all to take a look at it. I use it all the time, my office uses it almost daily. The original proposal for National Map was costed at over a million dollars with a very long development cycle.

What National Map does it provides a spatial foundation for a whole series of government information sets, so it’s widely widely used by people who are wanting to use administrative boundaries or get access to telecommunications data and so on, roads and the rest.  Fortunately in that case, the project managers and their executives decided to take a risk and invest in a new technology.

They invested $80,000 which was not a big sum of money for a government in developing a prototype solution that would be built in Australia and use the cloud.

Over that three months, the prototype was built by the Department of Communications and Data61 - tested and then presented to decision makers including the now Prime Minister.

The process had been so successful that they were given approval to move to live beta and the rest is history. So this is an $80,000 project and it was expected to cost much more.

We want to see many more examples exactly like that, but that means targeting panels and how we procure is one of my  key aims for this year.

Another area I want to touch on briefly is myGov and we’re putting enormous effort into this. We’re working very closely in one of our collaborative partnerships with the Department of Human Services on myGov.

We have taken an iterative process to how we upgrade myGov.

Every change, no matter how small, has had a direct positive impact for Australians.

So we found a few months ago that Changing the username from an alpha numeric string to your email - this is one of my personal missions -  seemed simple, but it turns out it saved many thousands of hours on the phone for Australians, including me, in constantly resetting their passwords and trying to remember what their old alpha numeric string password and username actually was.

We are also well on our way to delivering on our May deadline for the next version of myGov.

May will see the roll out of the updated myGov in time for the busiest usage at the end of financial year. For those of you who don’t use myGov, most Australians are now using myGov, it’s for Medicare and personal tax payments and so on, the alpha that the DTA and DHS released  late last year is the first of an ongoing series of regular updates and this much more iterative approach, user driven approach to updating myGov is an important change. The Minister for Human Services and myself are directly involved in making sure this is a project we get right, as with all projects. It won’t be perfect but it will be a big upgrade and it will most importantly allow us to make many upgrades into the future.

Finally I would like to talk about a couple of areas that will have our attention in 2017.

I see GOV.AU, a new process for ICT investment and procurement, cloud, platforms and upskilling the public service as some of the major deliverables for this year.

I want to touch briefly on those.

First - Gov.au  and to quote Mark Twain, news of its death is greatly exaggerated.

The goal of gov.au is to work towards a simple, easy to use digital estate across government. This remains as important to me today as it ever has.

We haven’t been idle; we’ve been working hard on toolkits, standards, targeted delivery within the largest agencies. And not just assistance but oversight and enforcement. If we set a standard, we want to see it kept.

It’s important to me we make the Government’s digital estate simpler, that we reduce the required reading age and we deliver a single vision for how websites will be run in the future. And we want to see the benefits from the migration to digital channels increase as a result of that work.

Let me move to another one of our focuses for the next 12 months and that’s the cloud.

I mentioned earlier that the uptake of cloud technology within the Government has been a key goal.

It was fantastic to see this in the last few days - the two first protected cloud ratings being approved by the ASD last week. It might sound like a trivial change but for government this is a very significant change as to what it could lead to.

I visited Rupert at the Vault Systems office and Vault along with Slice Tech was one of the two companies that were given protected cloud status in Sydney and I can tell you it’s rewarding to see great Australian talent building successful companies. And this is an illustration of what we can do in this country with the Government’s IT spend if we get our act together.

We want more in the cloud because at the moment only .5 of a percent of our IT spend goes to the cloud. It is way way too low. It’s about $60million which is just not enough. We spend about $700 million a year buying traditional hardware.

Now the benefits of moving to the cloud, I don’t need to convert this crowd, but we know in Government they are very significant and as I say this is a priority for the year, alongside the governance structure, and benchmarks for a cloud transformation.

As always, and this is the new philosophy, the philosophy I’ve embarked on, we get started with small exemplars, like the two protected cloud providers.

But within my office, within several other electorate offices, the DTA and PM&C are all on the cloud or in the process of moving onto it. So we’re trying to drive this from the top, if you like,  to illustrate to Government that this is an important priority for us.

2016 was a big year for the Government in the digital and IT space. There were some real successes and some obvious issues.

Importantly I think we have learnt from those and we are on track to deliver solutions.

2017 will be an extremely important year.

We see that the opportunity is great but so is the responsibility, not just for better government digital services but for the role government plays in driving our whole innovation sector in this country.

It was a real pleasure to be here with you today.