The commission estimates agencies spent $3 billion on ICT in 2005/06, about two-thirds of which went on running existing systems and a third on adding capability.
The Government announced a series of moves in December to better direct ICT spending, hoping to ensure it generated value for money. This stemmed from a wide-ranging review of public services ordered by Associate Finance Minister Trevor Mallard.
State Services' deputy commissioner Laurence Millar held a breakfast for industry executives last week, telling them they had little to fear and needed to gear up to help the Government deliver on its e-government strategy, which aims to transform the way agencies provide services to the public using technology.
Mr Millar conceded "lower-cost shared services doesn't sound very good if you are in the IT industry" but said the "Government cake" was not small and that he was concerned by the skills shortage in New Zealand and overseas. "The New Zealand IT industry does not have the capacity to deliver on the pipeline of public sector IT work," he said.
The commission says research carried out last year by Gartner found the Government spent less on ICT per head of population than seven of eight other countries surveyed, buying in services worth US$700 million (NZ$1 billion) a year, or US$187 per head. The figures exclude internal costs, such as staffing, which made up most of the commission's $3 billion spending estimate. The proportion of ICT purchases accounted for by the Government - 13 per cent of total ICT spending in New Zealand - was the equal lowest in the sample group.
"There is a risk that reinvestment in ICT will fall below the level necessary to maintain and enhance current capability," the commission reported.
Mr Mallard announced in December that the commission, the Treasury and the Department of the Prime Minister and Cabinet would "assume clearer leadership of capital asset management and ICT investments".
The Treasury, the commission and big-spending agencies have been asked to develop a new framework by June for reporting on the performance of investments in ICT. By the end of next year, the commission and the Treasury "will report back on productivity and performance gains from ICT spending in departments and crown entities".
"High-risk or high-cost" projects will be subjected to external reviews before they get the green light - even if they are paid for out of agencies' existing baseline funding. The Treasury and the Auditor-General's Office will also look at improving the monitoring of major projects.
The experience of similar productivity drives in Britain and Australia suggests the initiatives could shave "a lot more" than $30 million off the Government's ICT bill each year, the commission says.
Autor(en)/Author(s): Tom Pullar-Strecker
