The new government could drive a huge wave of digital change and innovation if they did two small things.
First change the way they buy digital services – panels and tenders always seem to benefit larger firms. Secondly, provide a simpler access point to people with innovative ideas.
In May this year a number of reports tabled Australia’s status as a digital innovator.
The assessment was not good. We are now seen as a laggard in this area, but it wasn’t always the case. We used to be up there with some of the best, but government and corporate lethargy has seen us slide down the global league table.
The response of the then Minister for Communications, Malcolm Turnbull, was to launch the Digital Transformation Office www.dto.gov.au, aimed at improving the government’s technological interface with citizens.
It’s a good start, but it’s not the answer to our digital malaise.
The start-up community has been increasingly vocal about the deeper, structural issues in this country that are holding back innovation. These include taxation, access to funding and network infrastructure.
There is a sense among them that something good is going to happen and the landscape will change. This can be attributed partly to the recent leadership change, to a Prime Minister who has empathy with the sector, as well as personal experience in a highly successful start-up
However, start-ups are a small part of the economy and regardless of what happens today it will be at least 10 years before that activity really bears fruit on a scale to address the current challenges.
It’s also highly contentious that this sector will actually deliver much at all. Professor Scott Shane from Case Western Reserve University argues “that the investment of money and time in the creation of a new business venture is a worse investment than if these resources were put into the expansion of an average existing business.”
Business needs certainty. The issues businesses had with Abbott was he never really made a decision on anything, so they had a hard time putting strategy into place.
Big businesses said many times – ‘do what you like. Just tell us and we’ll deal with it’.
It’s been the same for the innovation sector. A change of leader is a fine thing but to actually kick off innovation, the sector needs certainty and one voice from government.
A recent meeting I attended, relating to the technology around the National Disability Insurance Scheme (NDIS), illustrates much that is wrong with the way the government deals with technology. But government also represents the biggest immediate opportunity to fire innovation.
The CIO from a Federal Government department stood up and told everyone the landscape was going to change. The department were going to work differently and empower small business to engage more easily with the government. He then went on to talk about “big iron”, an old-fashioned term for hardware that I haven’t heard used for years. His department had installed SAP CRM and bought a Hybris solution for a marketplace they are building. And finally they are using the same panel and tender process they have always used.
In the time since that presentation this same department has been vague about what they will do and they won’t. They won’t give a clear indication of what they are planning, they won’t commit to a timetable despite the fact they claim to have a prototype.
I’m sure I wasn’t the only person to leave the room wondering what had changed.
The words SAP and Hybris mean the usual big five vendors are the only ones who will get to tender. No small business will be able to apply – it’s not something they can or want to be involved in.
So they profess to want more involvement from small business, but behave in a way that clearly excludes involvement.
Most entrepreneurs are happy with uncertainty but when it’s driven by the government everyone will just stay away.
Why is this important?
Well, the government spends around $9 billion a year on IT. Drive into Canberra and you’ll see the buildings of the companies which are the recipients of this money. Accenture, PWC, Deloitte to name a few.
Most small businesses and entrepreneurs stay away from the government because they can’t deal with the way state and federal deal with tenders. Governments deal with the big companies because it feels comfortable and safe.
If you look at the experience of the Obama government you’ll see a similar pattern. They used the cream of the IT community to build their health insurance portal and, despite $370 million of expenditure, it didn’t work.
So the project was switched to a small team of digital specialists. They rebuilt the platform for $4 million with a 20 times reduction in annual maintenance costs.
If the current government really wants to empower a new way of working, if they are genuinely going to be government as a platform and if they want to empower innovation, then they are going to need to do the following:
- Give the industry some certainty about the role of government in the deployment of IT
- Create the APIs and get out of the way so entrepreneurs can build innovative products and services using these
- Change the procurement process to start with small specialist organisations rather than the current risk mitigation “you can’t get fired for choosing IBM” process
- Learn from the Obama project. Find a way to engage the new world of developers and empower a new range of businesses with just a little of that $9 billion
- Get rid of enterprise software as the default. Most of this is now generic and can be done better and cheaper with open source
- Only use Australian companies with staff on the ground here, paying tax like they should rather than the current arrangements
But most importantly, the government needs to create a policy for all of government and stick to it with transparency.
The NDIS is a great opportunity to do something different. It’s a multi-billion dollar industry.
Naturally, that sort of money attracts the old guard. But the government has a chance to fire up the new guard. They should seize the day and do it now.
Simon van Wyk is the Founder of Blue Road Group. Simon has been part of the digital transformation of most major brands in Australia. Blue Road deliver digital innovation and leadership transformation services.
*Photo Credit: AUSPIC and PM&C