Coalition's ICT plans promising - if they can deliver

The Australian ICT community is closely watching the new Coalition government to determine what impact the change of guard will have on the sector, as well as on government usage of ICT.

The consensus among analysts interviewed for this report appears to be that the Coalition is putting out the right messages on ICT, but that it’s early days yet and these messages will need to be backed up with substantive policies.

Ovum’s research director for Asia-Pacific IT, Kevin Noonan, said the immediate technology-related challenges the new government will face revolve around “the ministerial line-up and the break-up of agencies, and then the Commission of Audit that the Coalition has promised”.

He said the real challenge for the ministerial line-up is who’s going to be responsible for ICT. Traditionally, the finance ministry has taken responsibility, but it could be shifted to the communications portfolio. In the Coalition’s pre-election policy document, it was recommended that the Department of Prime Minister and Cabinet take on the role.

“Either way, I think the industry would be very happy, so long as there’s somebody there who has a pragmatic understanding of ICT,” Noonan said.

Next, reshaping government agencies will likely require modifications to current IT contracts and will result in changes to the working of departments,” he added. “Administrative changes [generally spell] good news for IT, because there’s usually a great deal of IT work to be done.”

Ian Bertram, Asia-Pacific head of research for Gartner, said the incoming government will place a major emphasis on improving productivity through technology.

“This government wants to be agile ...wants to be a 21st-century government, and to be a 21st-century government they’re going to have to use the technology that’s available to them. So that indicates that there’s going to be a continued investment in technology, but not just for the sake of technology. As you start to read a lot of the [policy] documents, it’s about productivity.”

Making meaningful changes to processes like government procurement of ICT products may prove tricky, as it will require new legislation. But the stated intentions and aspirations of the new government bode well for the Australian ICT sector, Bertram said. “There’s going to be a lot of opportunity, let’s put it that way.”

Emilie Ditton, IDC Australia’s research manager, said it may take some time for the change of government to have a meaningful impact on Australian ICT. “I think the likelihood is that they’ll be so focused on other promises that they’ve made for at least the first two years in government that it’s unlikely that they’ll do anything really substantial around ICT policy until at least the end of this term,” she said.

In terms of government procurement and usage of ICT, policy documents indicate that the government’s initial priority will be understanding how things stand and where the opportunities to save are, she said. “I think that kind of watch and wait approach is the most likely one at this stage.”

The Coalition’s pre-election ICT policy document places a heavy emphasis on cloud computing, including a goal of moving all light government users of IT onto the cloud where possible. But analysts differ on whether this will make a meaningful impact on cloud adoption in the public sector.

“Certainly they intend to deploy cloud, but other governments have made those announcements too, and the deployment of cloud in government is still fairly slow in Australia,” Ditton said. “It’s all well and good to have a high-level policy, but that’s quite different to actually put it in place across government.”

Noonan by contrast believes that the Coalition’s cloud policy has the potential to translate to a more meaningful impact on cloud adoption than Labor’s cloud strategy.

“The requirement for cloud is something that now has bipartisan agreement. [But] one of the big differences I see is the Coalition sees cloud not only as something that will add productivity to government, but will also use the government’s buying power to build a cloud capability within the country.”

The Coalition’s approach is also likely to spur public sector cloud adoption specifically, he said, “The Coalition government has signalled that it’s not going to put up with excuses for not taking up cloud. This means that government CIOs will not only need to consider the cloud as the current policies did, but they’ll need to seriously consider the cloud.”

The pre-election policies also include a section on e-government. The Coalition has set some specific goals, including making the internet the default way of engaging with government for every frequent interaction - defined as any that take place more than 50,000 times a year - by 2017.

Noonan said that with the internet and mobile devices becoming so ubiquitous across Australia, this kind of upheaval is inevitable. “The government’s policy of moving transactions online is not really something where we have any choice. We have to do this, simply because the community will demand it.”

But Ditton feels that this and the Coalition’s other e-government and digital economy pledges oversimplify the difficulty of actually enacting such changes.

“I think absolutely that’s the right objective to have, the [2017] target is a really good, well-defined target. Whether or not it can be delivered really remains to be seen. Coalition governments previously haven’t been very successful at delivering digital economy platforms.”

The NBN

The Coalition has been clear about its alternate plans for the NBN, including using fibre-to-the-node (FTTN) rather than fibre-to-the-home (FTTH) for the majority of the national rollout. The relative merits of the two approaches have been debated to death.

But although an online petition to save Labor’s vision for the NBN has attracted nearly 188,000 signatures in a matter of days, Noonan points out that the technology debate no longer matters post-election.

“There’s no point debating the value of one solution or another any more because we now know what that solution’s going to be,” he said. “Now that we have the new government in place and it’s pretty clear what they will be delivering ... the question is how’s that going to drive value to the community.”

Ditton said the change in NBN policy will mean a lot more than what speeds are available to consumers. “The Coalition is more successful than Labor was in terms of creating the policy settings that will actually drive improved outcomes - in education, healthcare delivery through digital means, government services - and enable those things through the NBN.”

Bertram noted that despite the Coalition’s heated rhetoric against Labor’s vision for the NBN, “there is an acknowledgement that investment in the NBN at some level will need to continue”. He also said the government wants to be known for its investments in infrastructure, and in the 21st century, this also means investment in technology infrastructure.

“By investing in some of these roads and rails, there’s going to be a huge amount of technology infrastructure that will go in behind that - in how to manage these better, how to monitor that, how to securely put some of these things in place, how to protect that investment,” he said. “The investment in the technology that goes behind all that infrastructure, I think, is going to be another huge opportunity [for the ICT sector].”

Analysts acknowledged that copper has a limited life span and that this will need to be addressed down the line. But Bertram believes that continued investment in a fibre backbone will put Australia in a position to explore future last-mile delivery mechanisms including wireless.

“The whole aspiration of the NBN I think is still going to be there. I think the execution of it is going to be a bit quicker by doing it as FTTN,” he said. “Because it will be market forces that are demanding this rather than government dictating it.”

As to what the changes will mean for NBN Co, IBRS advisor Guy Cranswick said the Coalition is likely to place the state-owned company through “a tough review, and that will make it leaner with more governance”.

The impact on Australia’s future digital competitiveness is difficult to define because the differences between FTTN and FTTH are marginal, he said.

“Network engineers see it one way and economists see it another, but competitiveness is an economic measurement. There are more factors than cabinets and copper, there is the operational cost over the long term and when the network is completed to be accounted for. We’ll have to watch that one over the next 2-3 years.”

Image courtesy of OzMark17 under CC