The Australian Government has taken a major step forward on its road to reforming procurement practices with the launch this week of a new Digital Marketplace for buyers and sellers of services to government.
The Digital Transformation Office’s Digital Marketplace beta is also a first step in fulfilling a Coalition election pledge to reform the way government manages its $5 billion-plus information technology spend.
And finally, the launch also exposes the rawness of the chasm between the Department of Finance and the Department of Prime Minister and Cabinet on procurement issues. This has been a running sore since before the DTO was launched.
In fact, the digital services panel of 220 suppliers to government that serves as the beta platform for the beta is a result of those tensions. When the DTO could not find a fit-for-purpose panel of suppliers being managed by Finance, it controversially set up its own.
The appointment of a taskforce within PM&C – albeit it with members from Finance – gives the DTO the political cover it needs to get on with the pilot. But there are powerful forces at work here, and control of the government purse-strings is at the centre of a huge struggle.
You wouldn’t want to guess where all this ends up. But whatever the ructions over this procurement reform, they weren’t being talked about yesterday at the launch.
Eventually these sores will need lancing, but while this program is being run under the Prime Minister’s department under the banner of an election commitment, the public conversations have remained polite.
The Digital Marketplace is arguably the DTO’s most important beta to date.
Where its exemplar projects have focused on the narrowest of niche functionality, the marketplace is a whole of government service. It is restricted to suppliers of digital services – from UX to hosting to design – something used by virtually all departments and agencies across government.
The marketplace was announced through another slightly insufferable blog post. It will be interesting to see how many departments and agencies jump on the marketplace early.
Fortunately the straight-talking Angus Taylor as the Assistant Minister for Digital Transformation and Cities was on hand to keep it real.
Mr Taylor says the marketplace conforms to all current procurement rules as managed by Finance, but says there is a recognition in government that changes will be required to maximise the marketplace benefits. For the early stages of the beta, the aim he says is to build momentum.
If you haven’t guessed what the marketplace look like, you can find it here. But conceptually it is not a long way from eBay for government, with recommendation engines and reputation systems helping steer buyers and sellers to the best providers, and the best agencies to work for.
Like eBay, the marketplace is built to provide an end-to-end digital service that includes the payment system. It has built in functions for handling straight-forward transactions – like hiring a short-term skills contract – to more complex “outcomes-based” transactions.
Later this year the DTO is promising the launch of an ‘ideation’ platform (is there a more hideous word in the whole world?) that will host collaborative innovation efforts.
Ultimately it will lower cost, and strip complexity – and the unnecessary friction of the procurement overlords – from the system. It will also drive better services.
Mr Taylor told InnovationAus.com that “service providers can deliver a lot more to government than we are currently asking them to deliver.”
“There is an interactivity, transparency and openness to innovation that is not currently part of [government procurement] that will be a key feature of the marketplace,” he said.
The government has made much of the fact that the marketplace will be good news for smaller suppliers, who should be able to access government work at lower cost. It says this will open the door for more government work to local startups and SMEs.
That remains to be seen. For now, the 220 suppliers listed on the digital services panel range in size from giants like Deloitte, CSC and Accenture to the tiny operations of one-man providers and mid-tier digital specialists like Squiz in the middle.
Angus Taylor is excited that this digital marketplace, with its potential to drive whole-of-government change. He has been pressing a mantra lately that the Digital Transformation Office must be less about disruption and more aligned to collaboration and change management.
This was on display again at the marketplace launch as he surveyed the size of the opportunity for cultural change, and for improvements in service delivery for citizens.
“It’s incredibly important that we shoot for big targets and we work out whether we’re delivering those targets,” Mr Taylor said. “And that’s very important for any organisation that is trying to drive change.”
“It is important that the DTO be a disrupter, but it’s also important that it be a change manager,” he said.
“Our ability as an organisation, the ability of the DTO, to disrupt but also to manage a change process across the APS is critical and that means having a very good sense of where the benefits come from in a project and how we’re actually going to deliver those outcomes for government and most importantly for the citizens of Australia.”
Meanwhile, it is worth noting the change in tone from the DTO. When the Digital Marketplace project was first announced in March, the launch was held in Sydney at the fintech hub Stone & Chalk.
That was never going to happen second time around, such has been the gnashing of teeth about the DTO’s headquarters in Sydney and its cultural affiliations to StartupLand.
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