This Aussie fightback may not be all bad…

Andrew Pring
22 November 2013

Andrew Pring © Akin FalopeAny Englishman, or woman, drowsily checking the cricket score on their phone this morning would have had a very rude awakening indeed. The disastrous batting collapse at the Gabbatoir in Brisbane has ruined the good start made on the first day of this eagerly-awaited Ashes series and put firmly to the sword any suggestions that Australia’s cricketers would prove less than competitive.

Just a few miles down the road, the Queensland government’s procurement chiefs are also grappling with the issue of competition. Their task, though, seems even harder than England’s in trying to recover from today’s ignominy. How to escape from an over-reliance on the handful of suppliers who are capable of handling major public sector contracts is a question that’s dogged Australian civil servants for years. People still talk in awed and shocked tones about the Queensland Health payroll project, which started out as a AUS $6 million project and is now expected to come in at around AUS $1.2 bn. Dislodging the incumbent contractors when things started to slide proved an impossible process.

And it’s not just a problem Down Under – bureaucrats everywhere face the same enfeebling dependence on the abilities of the world’s top IT consultancies and suppliers and other niche specialists. In Britain, for example, one would have thought that G4S’s performance at last year’s Olympic Games might have disqualified it from similar future contracts. Think again: there are apparently so few security specialists with relevant experience that Commonwealth Games organisers are asking it to perform a similar role in Glasgow next year. And there are many other examples of suppliers whose deep entrenchment in the provision of a vital service makes them nigh-on impossible to unseat in favour of a new operator.

In frustration at these regularly reoccurring situations, Queensland has now ditched its long-standing procurement approach to IT services in favour of a radically different approach. Instead of the previous build-own-operate model, it is to buy technology ‘as a service’. This means rather than specifying how proprietary software and infrastructure is built and customised, it will mandate the outcome it is seeking.

It’s a path that the Commonwealth Bank of Australia (whose logo is currently liberally plastered all over the Gabba) has employed successfully and others are also set to follow in buying largely commoditised technologies on an operating expenditure basis, as opposed to a capital expenditure basis. The aim is that suppliers become much more easy to disengage, and it ends the culture of ‘maintenance revenue’ to sustain legacy systems and exorbitantly costly upgrades.

Of course, it still doesn’t address the problem of too few specialist suppliers to choose from. But it does mean their long-term grip on a public service is loosened. Whether England’s cricketers can loosen their rival’s grip on the first Test match remains to be seen.

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