Coming election revives debate on federal IT outsourcing
Glenn Archer, CIO of the Australian Government Information Management Office (AGIMO) said while recent reports had suggested a Coalition government might outsource more of the government's $6 billion a year IT needs, he is "entirely ignorant of any such pact". The Coalition has made no policy announcements on the topic to date.
Already between 19 and 22 per cent of federal IT spending goes to three outsourcers in Australia. Unless the government of the day made specific changes that forced agencies to outsource more, it would depend on individual agency needs and CIO decisions, he said.
Yet, there is a precedent of forced outsourcing in a tumultuous IT era that began in 1997 and that many Canberra technology leaders still resent. Then, the Howard government announced a Whole-of-Government Information Technology Infrastructure Consolidation and Outsourcing Initiative headed by a new agency, the Office of Asset Sales and Information Technology Outsourcing (OASITO).
The original outsourcing plan was to be completed by 1999, but only four of the 11 major planned tenders were completed by that date. A scathing report by the Auditor-General in 2000 was quickly followed by the Humphry review and a Senate inquiry, all similarly critical.
Former ASX head Richard Humphry said at the time that while the initiative had established IT outsourcing in Australia, its continuation should be re-examined as it was not proving effective.
The approach was eventually dropped and OASITO closed.
"I would look at the Humphry report and ask what has changed since 2000," Mr Archer told IT Pro.
Read the full story at theage.com.au/it-pro
Frequently Asked Questions about this Article…
Not necessarily. According to Glenn Archer, the Australian Government's top CIO, a change of government doesn’t automatically mean more outsourcing. The article notes there have been no Coalition policy announcements on the topic, and any increase would depend on specific policy changes or individual agency needs and CIO decisions.
Glenn Archer said he is “entirely ignorant of any such pact” suggesting the Coalition would outsource more. He emphasised that, absent clear government direction forcing agencies to outsource, decisions would rest with agencies and their CIOs.
The article states that between 19% and 22% of federal IT spending already goes to three outsourcers in Australia, indicating a significant existing level of private-sector involvement.
OASITO was the Office of Asset Sales and Information Technology Outsourcing set up under the Howard government’s late‑1990s Whole‑of‑Government IT consolidation and outsourcing initiative. It set a precedent for forced outsourcing, but the initiative ran into problems, was widely criticised, and OASITO was eventually closed.
A scathing Auditor‑General report in 2000, the Humphry review (by former ASX head Richard Humphry) and a Senate inquiry all criticised the initiative. Humphry said the program had established IT outsourcing in Australia but recommended re‑examining its continuation because it was not proving effective.
Investors should watch for formal policy announcements from political parties (the article notes no Coalition policy had been announced), statements from government CIOs like AGIMO, and agency‑level procurement decisions, since any change is likely to come from specific policy moves or agency needs.
Potentially yes. The article points out a sizable share of federal IT spending already goes to a small number of outsourcers, so policy shifts that force more or less outsourcing could influence the revenue mix for major government IT suppliers. However, the article emphasises that actual outcomes depend on policy decisions and individual agency choices.
The article references fuller coverage available at theage.com.au/it-pro, which includes details on the current debate, AGIMO comments, the Humphry review and the Auditor‑General’s findings.
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