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EDITORIAL: Show me the (wasted) money

EDITORIAL: Show me the (wasted) money

One view of the Australian National Audit Office's report into the Whole of Government Outsourcing program surely must be that this was the outsourcing bungle we had to have.

Combine the enthusiasm of the public service (not) with the deep pockets of the Federal Government, overpaid US advisers and it's a recipe for disaster.

In principle, I'd have to say I'm a fan of outsourcing. It's certainly the big-ticket item on all the large service providers' menus.

And for large corporate customers, it's an easy way of saying "here's my IT system - implement the latest technology to achieve my performance and cost objectives" - classic bit of delegation that.

But the problems are twofold, in my humble opinion.

Firstly, giving someone else your headache doesn't necessarily make that headache go away. As a customer (in this case the Government), you still need switched-on individuals to make sure the project's targets are met and maintained.

The apparent lack of accountability on both sides of the fence has become quite apparent. But on the outsourcing company's side, the lack of accurate and detailed invoicing reeks of all kinds of rorts and underhand deals that we may never know anything about.

The second issue is the crux of the argument: return on investment. The only reason the Government implemented this grand outsourcing scheme was to save taxpayers a buck. Sure, that's a noble cause. But in the process, it has not only failed to do that, it's blown big money on overpaid advisers and companies who clearly haven't had the incentives to deliver the goods.

The report states at least three US advisers on the project have pocketed over $1 million a year!

Excuse my tendency to sensationalise here, but I think it's a great example of the Government's ability to spend all the right money in the wrong places. The Government has previously been criticised for these overpaid advisers, and it's not going to stop now. The IT expertise slush fund should have been directed towards local companies and individuals with real customer-service ethics.

And the crying shame for IT services companies such as Ipex, BCA, Southmark, Powerlan, Data#3, Senteq and NetStar is they often get squeezed out of large deals such as this at the top end of the customer scale.

For all the advantages offered by international services giants, their inability to harness other good local talent to be found in these companies has denied projects such as this a real fighting chance of success.

And to state the obvious, you and I as taxpayers are drawing the short straw at the end of the day. The only reason Government departments exist is to serve us.

For Government ministers and CEOs alike, return on investment is the only key method by which serious IT decisions are made today.

So given that, according to the Auditor's report, this outsourcing initiative is a colossal failure, will we see any real changes to the future of such arrangements? I'd like to think so, but reality says politicians will find a great spin to cover up the damage.

What's your view on the performance of our high-flying outsourcing giants?


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