Australia’s Digital Transformation Agency mulls procurement overhaul to improve SME access

Profile picture for user ddpreez By Derek du Preez April 8, 2018
Australia’s federal Digital Transformation Agency is considering how to simplify procurement practices and get more SMEs working with government.

The federal government in Australia is asking for expert feedback on its plans to simplify procurement practices and improve access for SMEs, in what is set to be a radical overhaul of buying procedure, driven by the Digital Transformation Agency.

The move comes after the government accepted the 10 recommendations within the ICT Procurement Taskforce, which included the adoption of a framework for ICT procurement, putting forward ICT procurement principles to guide policy and decision making.

A draft framework has been developed by a multi-agency exemplar team, which aims to make the ICT Procurement process “consistent, efficient and easier for all”.

For those unaware, the Australian government has followed a very similar path to that of the UK in relation to its attempts at digital transformation:

  • It set up its own digital department – previously called the Digital Transformation Office, but recently renamed the Digital Transformation Agency.
  • It focused on exemplar services.
  • It created a new single website for government.
  • It has created a Digital Marketplace
  • And it is adopting a platform approach to building services.

However, it has also faced a number of challenges in driving transformation forward. For example, previous CDO Paul Shetler left the government agency and made his criticisms of the government’s approach to digital very public, where he said:

The blockers to positive transformation are structural, cultural and skills-based. During the last 16 months at DTO and now at the brand-new DTA, we’ve also seen just how painful it can be for government to get on with delivering good digital services.

For services to be truly transformed, we need to go beyond the front end, and transform the back office IT too. If we don’t rethink the underlying IT systems and business processes, we’re constrained to do little more than make cosmetic changes. After all the service doesn’t stop at the user interface, it includes an ensemble of people, systems and processes that support it.

Unfortunately, across most governments worldwide – and Australia is no exception – too many public servants working in back offices are often reduced to human APIs – retyping information from one system to another, and stuck processing the repetitive common cases that shouldn’t need any human intervention at all. This is a waste of their talent and initiative.

Positive change

As we’ve seen in the UK, a large part of the digital transformation agenda has been driven by public procurement reform - specifically in terms of the G-Cloud framework and the Digital Marketplace, which have opened up access for buyers and suppliers, making it simpler and easier to purchase commoditized goods and services.

It seems that Australia’s DTA is considering how it could introduce similar changes. It brought together procurement experts from seven government agencies to develop, prototype and test out a new framework. It notes that the team conducted a “series of research sessions to understand user needs, as well as consultation sessions with multiple agencies and industry bodies”.

The result is a single draft framework, from which it is now seeking feedback on.

The experts established that the following needs to change:

  • Panels are good, but they could be better - Australian agencies often establish panels, which are a set up suppliers used to buy similar services over a period of time. The experts found that government procurement officers see panels as rigid and lacking flexibility. This can mean new players and emerging technologies are locked out because traditional panels are not set up to bring on new service categories. There is a sentiment that there are too many panels.
  • One size doesn’t fit all - Agencies told experts that the ICT procurement policy requires flexibility and wide consultation. There was strong support for increasing the $80,000 procurement threshold, which adds red tape for buyers and is seen as a barrier to entry for sellers.
  • New guidance - Agencies said that they would like an ICT procurement ‘One Stop Shop’ from the DTA that includes guidance, tools and reporting. Agencies would like the DTA to create an ICT contracting suite for medium value procurements (targeting SMEs).
  • More sharing and collaborating - The DTA found there is support for and value in like-minded people talking, sharing and collaborating. This could be in the format of a panel manager forum or ICT professional’s forum.
  • More training and support - The user research showed that ICT procurement is seen as a profession that needs to be supported at an agency level to invest in the capability uplift required. Further, this capability has become diluted and has moved towards more generalist procurement skills. The team found a need for training and learning opportunities to support the profession.

The DTA’s user research revealed the significant role guidance will have in changing behaviour and delivering the principles and desired outcomes. For example, the draft framework includes a central repository for ICT procurement information, such as departmental guides and guides to support procurement teams.

Equally, it includes tools to make ICT procurement easy, such as: model contracts, central registers, platforms, panels and an annual benchmarking exercise on prices.

The DTA said:

The DTA is changing the way government buys ICT products and services.

We are working on a series of reforms to make it easier for small and medium businesses to sell to government, simplify processes, avoid duplication, and consolidate and coordinate whole-of-government buying.

We want to hear from anyone who will work in this framework. That’s both people from government agencies — especially those in procurement — and from industry, especially those that sell ICT to government, or want to in the future.

My take

Procurement is hard, especially government procurement. However, the UK shows that if you build something that serves both buyer needs and creates an open marketplace for suppliers, change is possible. The Digital Marketplace is now a multi-billion pound business in the UK. However, even years after the UK implemented frameworks such as the G-Cloud, reforms are still taking places and there are still gripes around how procurement is carried out. Constant iteration is needed and constant engagement with both the buyer and supplier community. Positive steps being taken down under, but this isn’t going to be an easy ride.