NEW SOUTH WALESICT STATE OF PLAY

DIGITAL TRANSFORMATION

NOVEMBER 2016

22

Budget impacts & ICT initiatives

Budget impacts & ICT initiatives

NSW ICT contractingNSW ICT contracting

Transformation journey to date Transformation journey to date

3

Operating Surplus & Deficit

expectations

-$3

-$2

-$1

$0

$1

$2

$3

$4

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Bill

ion

s

2012-13 Budget 2013-14 Budget 2014-15 Budget

2015-16 Budget 2016-17 Budget

ICT Investment Shaping Forces

4

9.8

-0.1

5.4

4.2

0.6

3.9

-2

0

2

4

6

8

10

12

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Revenue Growth

Expenses Growth 2016-17NSW CPI 1.8AU CPI 1.3

Pe

rce

nta

ge (

%)

Mar-11 Mar-15Mar-19

Spending Appetite Set to Shrink

5

TAS

4.2

ACT

5.2

FTE/population ratio June 2015FTE/population ratio June 2015

Median 4.3

1.8%

1.3%

0.7%

1.8%

0.7%

-1.0% -1%-0.4%

2012 2013 2014 2015

FTE growth rates

Nurses, teachers and police Overall FTE growth

NSW Workforce Profile Reports, 2012-2015

*Nurses, teachers and police represent the majority of frontline FTE

*

Back Office Bears Brunt of FTE Reductions

6

2012-1329

2013-1440

2014-1551

2015-1634

2016-1726

Number of new ICT initiatives

*New ICT initiativesNewly announced in this budget. Are usually additional to ‘business as usual’ operating expenses allocated to agency. Often is multi-year

$359m

$160m

$277.4m

$264.3m

$561.5m

Total value of new

ICT initiatives* ($m)

Pre-election budget

New Initiatives as the Bellwether of Govt Attitude to ICT

7

<$5M $5M-$9.9M $10M-$49.9M $50M-$99.9M $100M+

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Mill

ion

s

2016-17 New

2015-16 New

2014-15 New

2013-14 New

2012-13 New

Light shaded bars represent existing initiatives

>$100m Projects Extinct in NSW?

E-ticketing System - Delivery $124 MSydney Water Corp IT Projects $61 M

Opal Card System $125 MDigital Train Radio $101 M

Sydney Water Corp IT Projects $57 MOpal Card System $133 M

Sydney Water CorpIT Projects $ 82 MNext Gen Info Systems $104 M

Sydney Water Corp IT Projects $21MNext Gen Info Sys $61M

8

2016-172015-162014-152013-142012-13$0

$20$40$60$80

$100$120$140$160$180

New ICT Initiatives Priorities By Sector

Transport for NSW –Business System Improvements $151.3M

Service NSW –Customer Service System Integration $33.9MNetwork Technology $21.1MDigital Channel Enhancements $19.0M

NSW Police –COPS Phase 3 Technical Migration $44.9MVoice Infrastructure Migration and Data Network Upgrade $20.5M

NSW Police – Technology Asset Replacement Program $45.0MDept. Justice – Justice Audio Visual Link Consolidation $40.0M

NSW Police –Greater Metro Area Radio Terminal/Network Refresh $56.7M

9Pareto Principle applies to New Initiative Allocations

$208.75m of total $264.3m is allocated to spend in 2016-17

10

Budget impacts & ICT initiatives

Budget impacts & ICT initiatives

NSW ICT contractingNSW ICT contracting

Transformation journey to date Transformation journey to date

11Key Points

Total contract value (TCV) for 2015-16 is $1.08B

The published value of a contract is allocated to the year in which the contract commences

Dataset understates the NSW ICT TCV because:

1. It excludes contracts under $150,000; and

2. NSW agencies may be failing to report relevant contracts in a timely manner.

Contracts often difficult to categorise because of very poor descriptions

122015-16: the Year Vapourware Became Cloud

$25.6 M

$146.0 M

$ K

$20 M

$40 M

$60 M

$80 M

$100 M

$120 M

$140 M

$160 M

2014-15 2015-16

2015-16 Cloud market YOY increase: 470%

FaCS: $53.6m• Accenture - SAP as a Service Solution

Justice: $35.3m• Accenture - ERP System/SAP As a Service

Solution

Transport for NSW: $19.7M• SAP - SAP ARIBA Cloud Services for S2C

13

$1.1 Billion

$120.4 M

1081

2522

0

500

1000

1500

2000

2500

3000

$ K

$200 M

$400 M

$600 M

$800 M

$1 Billion

$1 Billion

Over 150k Under 150k

Nu

mb

er

of

Co

ntr

acts

Tota

l Co

ntr

act

Val

ue

Total Contract Value

Intermedium Estimate

Real market is in contracts worth more than $150,000

TCV of reported contracts

142015-16 decrease in TCV correlates to budget investment

$59.1 M

$163.1 M

$153.1 M

$318.3 M

$621.4 M

$78.9 M

$125.4 M

$137.4 M

$216.6 M

$529.7 M

Labour Hire

Hardware

Telecommunications

Software

IT Services

2015-16 2014-15

2014-15 new initiatives = $561m

2015-16 new initiatives = $160m

15

SI Services50.38%

IT Managed Services38.55%

Business Consulting7.73%

Unspecified2.31%

Training1.02%

SI Services50.18%

IT Managed Services38.22%

Business Consulting6.75%

Unspecified4.59%

Training0.25%

$0.5B NSW IT services 2015-16

Federal IT Services 2011-16 - average

IT Services contracting

16

Transport and Infrastructure $391.6 M 299 36.1%

Health $298.9 M 528 27.6%

Family and Community Services $141.1 M 41 13.0%

Finance, Services & Innovation $80.0 M 113 7.4%

Justice $49.3 M 20 4.5%

Education $44.3 M 28 4.1%

Treasury $35.7 M 4 3.3%

Industry, Skills & Regional Development $28.6 M 27 2.6%

Planning and Environment $10.5 M 10 1.0%

Premier and Cabinet $3.2 M 11 0.3%

Contract Value Contract Number Market ShareAgency cluster

2015-16 NSW contracts by cluster

172015-16 Supplier Leaderboard

1 UXC LIMITED 113.30 M 1 10.46%

2 TELSTRA 102.14 M 31 9.43%

3 ACCENTURE 90.05 M 4 8.31%

4 CERNER CORP 38.76 M 13 3.58%

5 DIMENSION DATA 36.96 M 33 3.41%

6 SALESFORCE.COM 31.37 M 3 2.90%

7 PWC 30.04 M 4 2.77%

8 ORACLE 29.48 M 31 2.72%

9 IBM 26.55 M 8 2.45%

10 DELOITTE 25.09 M 12 2.32%

11 SAP 21.00 M 5 1.94%

12 METRONODE 18.80 M 1 1.74%

Contract Value Contract Number Market ShareSupplier Rank

182015-16 Supplier Leaderboard

13 DATA#3 GROUP 15.73 M 36 1.45%

14 HEWLETT-PACKARD 15.10 M 19 1.39%

15 NEC AUSTRALIA 13.37 M 13 1.23%

16 DE LAGE LANDEN 12.93 M 2 1.19%

17 LENOVO 12.21 M 4 1.13%

18 UXC RED ROCK 11.99 M 13 1.11%

19 UXC CONNECT 11.13 M 14 1.03%

20 PAXUS 10.45 M 43 0.96%

21 FUJITSU 10.19 M 22 0.94%

22 SQUIZ 10.15 M 3 0.94%

23 RISKMAN INTERNATIONAL 8.69 M 2 0.80%

24 HEALTH COMMUNICATION NETWORK 8.42 M 1 0.78%

25 ROUTEMATCH SOFTWARE 8.37 M 1 0.77%

Contract Value Contract Number Market ShareSupplier Rank

19

Supplier Rank ValueAgency Contract Title

1 UXC LIMITED Transport for NSW NGIS Managed Network Services Agreement (RFP2014/052) $113.30 M

2 ACCENTURE Family & Community Services SAP as a Service Solution Agreement $53.61 M

3 TELSTRA Transport for NSWNext Generation Infrastructure Services (NGIS) Fixed Voice & Mobile Services $41.27 M

4 ACCENTURE Department of Justice ERP System/SAP As a Service Solution Agreement $35.34 M

5 PWC NSW Treasury Prime Implementation $25.50 M

6 CERNER CORP HealthShare NSW Operational Management Services (OMS) $23.92 M

7 IBM Transport for NSW TfNSW NGIS Hardware Purchase $20.92 M

8 SAP Transport for NSW SAP ARIBA Cloud Services for S2C $19.66 M

9 SALESFORCE.COM Family & Community Services ChildStory Deployment Phase - Salesforce Professional Services $19.22 M

10 METRONODE Finance, Services & Innovation GovDC Monthly Provisioning Payments $18.80 M

11 DELOITTE Transport for NSW RMS Systems Integration $18.03 M

12 TELSTRA Department of Education Telecoms - Voice and Mobile $17.81 M

13 TELSTRA Family & Community Services Fixed Voice & Mobile Services $13.00 M

2015-16 Top 25 Contracts

20

14 DIMENSION DATA Transport for NSWMicrosoft Enterprise Agreement (Desktop O365 Services) 2015-18 $12.40 M

15 LENOVO Roads & Maritime Lenovo Contract Variation: Execution of option to extend $10.72 M

16 DE LAGE LANDEN HealthShare NSW Server and Cloud Agreement 062014 $9.64 M

17 TELSTRA Service NSW Telecommunications Data Services Contract $8.67 M

18HEALTH COMMUNICATION NETWORK HealthShare NSW Standing Order - Not Applicable $8.42 M

19 ROUTEMATCH SOFTWARE Transport for NSW Centralised Trip Allocation and Booking System $8.37 M

20 SICE Roads & MaritimeDesign, Supply, Installation and Maintenance if the Trip Reconstruction and Rating Module (TRARM) $8.23 M

21 C3 BUSINESS SOLUTIONS Family & Community Services ChildStory Deployment Phase - EYC3 Professional Services $8.20 M

22 SALESFORCE.COM Service NSW Customer Service Systems Technology $7.35 M

23 SQUIZ Family & Community Services ChildStory Deployment Phase - Squiz Subscription Services $7.25 M

24 MULESOFT Family & Community Services ChildStory Deployment Phase - Mulesoft Subscription Services $7.07 M

25 NEC AUSTRALIA Family & Community Services Consolidated Call Centre Platform $6.71 M

2015-16 Top 25 Contracts (Cont.)

Supplier Rank ValueAgency Contract Title

212015-16 IT Services TCV - top 10 agencies’ market share

27%

22%18%

7%

6%

5%

4%

2%2%

4%Transport for NSW

Department of Family and Community Services

HealthShare NSW

Department of Justice

Department of Finance, Services and Innovation

NSW Treasury

Roads and Maritime Services

Department of Education

Sydney Trains

Service NSW

Other Agencies

Total ITS market $0.5 B

22

21%

16%

6%6%5%

4%3%

2%2%

33%

UXC LIMITED

ACCENTURE

SALESFORCE.COM

PWC

CERNER CORPORATION

DELOITTE

METRONODE

DE LAGE LANDEN

SQUIZ

HEALTH COMMUNICATION NETWORK

Other Suppliers

2015-16 IT Services TCV - top 10 suppliers’ market share

Total top 10 market value $0.3 B

Total ITS market $0.5 B

23

Budget impacts & ICT initiatives

Budget impacts & ICT initiatives

NSW ICT contractingNSW ICT contracting

Transformation journey to date Transformation journey to date

24

Four scenarios for the year 2025

Adapted from Figure 1 of Queensland’s Digital Marketplace for Public Services: Four Scenarios in the Year 2025 (DSITI, Data61)

Digital Transformation means institutional and technological changeScenario 1 –

Heritage

Scenario 2 –New Order

Scenario 4 –Stargate

Scenario 3 –Turbocharge

Substantial

Shallow Deep

Limited

25

Digital Government Maturity

Automation

Digitising current procedures ‘as is’

Hybrid

Simplifying & redesigning current processes before digitising

Institutional Change

Rethinking & redesigning entire administrative systems

26

$51.2MTechnology for Learning & ICT Department of

Education

$56.7M Greater Metro Area

Radio Network & Terminal Refresh

NSW Police

$31.8M Building Digital Capability &

Transition of Agency Transactions Service NSW

$20M Ambulance Radio

Network Replacement Ministry of Health

$45.03MCritical Communications Enhancement Program

NSW Government Telecommunications Authority

Transformation Initiatives Institutional Change

Hybrid

Business as Usual

Business as Usual

Business as Usual

$10M Whole-of-System

Digital Reform Ministry of Health

Institutional Change

27Digital Government Readiness

Rate of Change: July 2015 – July 2016

28NSW – The National Leader

0 1 2 3 4 5 6 7 8 9 10

Jul-16

Mar-16

Jul-15

NSW DGRI Score: July 2015, March 2016, July 2016

ICT Strategy ICT Policy

ICT Governance Service Delivery Key Agencies

Procurement Policy Cross-Jurisdictional Cooperation

8.9

9.4

9.1

29Leaderboard

1 NSW 8.9 NSW 9.1 NSW 9.4

2 QLD 6.8 QLD 7.0 QLD 7.4

3 VIC 6.4 Federal 6.6 SA 7.4

4 SA 6.3 SA 6.5 VIC 7.3

5 Federal 6.2 VIC 5.9 Federal 6.9

6 TAS 4.5 ACT 5.2 WA 6.1

7 NT 4.5 TAS 4.5 ACT 5.1

8 ACT 3.8 NT 4.5 TAS 4.8

9 WA 3.5 WA 4.4 NT 4.1

ScoreRank ScoreJuly 2016Score March 2016July 2015

30Drill Down: ICT Strategy

ICT Strategy Score (as a %)

40%

100% +

55%

94%

26%

0% 20% 40% 60% 80% 100%

NT

ACT

TAS

Federal

WA

SA

VIC

QLD

NSW

Common strategy elements across Australia

• Frameworks to promote coordinated aaS adoption • WofG data analytics integration• WofG digital platforms• Emergence of WofG “Chief Digital Officer”

(with variances)

31Drill down: ICT policies

Privacy Data Retention

Open Data

Cyber Security

VIC

NSW

Federal

SA

QLD

ACT

WA

NT

TAS

ICT Policy Score (as a %)

50%

14%

100% +

8%

7%

0% 20% 40% 60% 80% 100%

TAS

NT

WA

ACT

QLD

SA

Federal

NSW

VIC

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33Contact us

T: (02) 9955 9896

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Judy HurditchPrincipal Analyst