• Opinion
  • February 20, 2019
  • 7 minutes
  • 1

In Australia, we’re challenging the status quo in government procurement

Opinion: Our government spends more than Australia’s big four banks combined

This piece was written by Dr Anthony Vlasic, Australia’s Digital Transformation Agency’s Chief Strategy Officer. For more like this, see our public partnerships newsfeed.


People’s expectations of government are changing. We want services and interactions to be faster than ever before, and we want government to be easier to deal with. This principle applies to businesses too, who expect government to be more “open for business”: that is, easier to partner with, with more transparent and simpler processes.

But when we think about this from a procurement point-of-view, things are complex and getting harder. We need to be more user centric, leverage new technology quickly, at a cheaper price, and all while reducing risk.

In the Australian Government, the impact of these competing needs is significant. With an annual technology spend on suppliers of over AU$6 billion, the Australian Government spends more than the equivalent of Australia’s big four banks combined.

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Understanding and tackling the problem

Understanding the full picture of users who buy technology for government is not easy. We recognised that navigating these challenges was going to be a big and complex undertaking, so we went back to basics. We started by simply asking the question: what do people think the challenges are when buying technology for government?

The Australian Government spends more than the equivalent of Australia’s big four banks combined

The feedback was not surprising. People told us they felt that processes were time-consuming, costly and complex; the risk-averse culture in government posed challenges; there was a lack of consistency and coordination across agencies; and that problems persisted, despite previous attempts to implement change. We needed to acknowledge and understand that the procurement process is only part of the challenge.

We then had to decide how to tackle these issues. Our strategy has been to focus on ensuring procurement is data driven, measurable and transparent, and that this is coordinated and consistent across government.

To help deliver on that, we’ve also focused on ensuring government has the right skills, that innovation is encouraged, and that businesses are given the opportunity to participate in the process. We are also regularly reviewing our progress to ensure we are on track to deliver enduring change.

This approach reflects the recommendations of the recent Australian Government ICT Procurement Taskforce Report. It’s the work we have been doing to implement these recommendations that has helped us start the journey to delivering real, enduring change.

Reflecting on our first year

Now that we are well into the journey, we have reflected on our lessons learnt along the way.

The first lesson, and probably the most important, was realising the importance of deliberately changing our language, because technology procurement is no longer all we do. Instead, we now refer to our work as digital sourcing. While many products, services and projects have technology components, the market is moving away from being just about procuring equipment. Instead, the focus is on technology as an enabler when sourcing digital outcomes.

Our core principles are about encouraging competition, being innovative and being structured and fair

The next lesson was about being clear about our principles to drive change. In our case, our core principles are about encouraging competition, being innovative and being structured and fair, amongst others. If you apply these principles, you end up focusing on the things that matter most.

We also learnt the importance of a strong, underlying framework to hold it all together. This helped us to articulate the outcomes we hoped to achieve from our principles, and how to get there — that is, what policies and guidance we needed to put in place to deliver on our objectives.

In order deliver, and to measure our progress along the way, we developed an agile methodology. The methodology is built on the basis that we proactively seek to consult and communicate to a wide range of stakeholders both within and outside government on a regular basis. This agile process, with ongoing feedback, helps us pave our journey and stay on track.

Another lesson was that it was important to acknowledge that one size does not fit all. Our AU$6 billion spend is across 200 agencies with conflicting needs and levels of maturity. There are all factors that need to be catered to, so we have learnt to build solutions for all sizes and requirements.

Changing both buyer and supplier behaviour is necessary

Finally, we have realised that enduring impact will require widespread change. We know that procurement processes are only part of the challenge — and that changing both buyer and supplier behaviour is necessary to get us there, so our processes are designed to do that.

We are well on our way to implementing these changes and hope to get it all in place in the next two years. It’s an ambitious target, but by continuing to learn from our experiences along the way, and adapting quickly, we are confident we will be able to deliver enduring change.

The real test — and how we will know that these tools and strategies have all come together — is if we succeed in changing the conversation from technology procurement to digital sourcing. — Anthony Vlasic

(Picture credit; Unsplash)

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