NSW CIO cuts millions from tech shopping budget

After saving millions on hardware and telecoms through shared procurement -- where agencies unite to approach the market as a single buyer -- the New South Wales state government is now considering where else it can shave its IT costs.

Speaking at an Australian Information Industry Association event last week, NSW government acting CIO Tony Gates said the state has already saved AU$30 million a year on laptops and AU$50 million on telecommunications as a result of combined purchasing.

Now, the state is looking at adding datacentres and Web hosting to its shared procurement plans.

"The problem with the old way is that suppliers bid once to go into a panel and then have to bid again to get the work-- that is costly to you [the taxpayer] and to us," Gates said.

"The current way of doing things looks good but it's not always efficient. [Shared procurement] makes a lot of sense from an economic point of view," he added.

Gates said the new approach is not just about saving money, but also adding value -- allowing the smallest and the largest agencies to take advantage of the same pricing and giving the less sizeable access to services and products at cheaper rates than tendering individually would provide.

NSW has also been able to build in additional requirements to its tenders -- for each laptop and desktop purchase made by state agencies, suppliers can be mandated to provide a "take back" facility for each end-of-life machine.

However, he acknowledged the new, more cost-efficient method might not prove as popular with the supplier community: "It's not a good thing from a vendor point of view but it is a good thing form a taxpayer point of view."

The consolidation of procurement comes as part of NSW's People First plan -- an ICT strategy overhaul announced last year. The IT consolidation plan is targeting savings of AU$565 million across its four year life span.

Gates said the money saved on backend systems, where 70 percent of NSW IT budget is spent, can be diverted into other areas.

"By reducing the cost of backend applications, more money is available for front line services [including health and education]," he said.

"People first ask the question: do we really need our own e-mail systems? Do we really need our own payroll systems? The community doesn't care what payroll system we use, they just want government to do its job," he added.

While the government may be moving to greater levels of shared procurement, not all technology looks set to be standardised on a single supplier -- Gates noted e-mail systems are unlikely to be unified in the same way as other purchasing, due to incompatible calendaring systems.

The New South Wales state government spends around AU$1 billion annually on ICT.