Published On: Mon, Jun 1st, 2015

The Barouch Feature: Malcolm Turnbull’s Digital Transformation Office must open doors for small tech firms

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Jonathan-Barouch---Portrait-#2The formation of the Digital Transformation Office (DTO) within Malcolm Turnbull’s communication portfolio creates a lot of opportunities both for Australian technology companies and citizens alike.

Adding imagination and a digital culture to the public service can only be a good thing. Smarter application of digital technology should result in better government services being delivered at lower cost. As Malcolm Turnbull pointed out, governments in Australia make up roughly one-third of the economy, so efficiency gains in the public sector have a substantial impact on the broader economic bottom line. For this reason alone, the ambitions of digital transformation in government are worth pursuing.

But the hidden opportunity, I believe is for the DTO to connect government with the local technology sector and the broader tech-enabled digital ecosystem.

For the public sector, digital transformation is a re-imagining of the way government interacts with citizens, the way it delivers government services and – if you buy into Malcolm Turnbull’s vision – the creation of government interfaces as beautiful as Uber or Netflix. For tech companies, successfully engaging with the DTO could become critical to gain entry to what is a ground floor opportunity.

However, my fear is that while the DTO has lofty ambitions, it will not control the government purse strings (procurement policy stays with the Department of Finance). Unless the challenges around government procurement are addressed at the same time, this initiative – however well intentioned – won’t be able deliver on its vision.

The reality is that smaller companies find it more difficult to deal with government than larger companies. This is doubly the case for small Australian companies who expend significant resources to respond to lengthy government RFPs.

At the DTO launch last week, smaller, and equally innovative, Australian technology companies were nowhere to be seen while the large US software firms were all represented.

There were some excellent presentations about the challenges of cultural change at the DTO launch – including great insights from Salesforce.com executive vice-president Vivek Kundra, Telstra chief operations officer Kate McKenzie and Westpac CIO Dave Curran – but very little about how the DTO will operate, or how it is structured.

So the question remains, how do you smash open the procurement barriers and let smaller Australian tech companies get access to government supply chains?

There is a lot we can learn from the US and Israel as both boast successful tech industries and start-up ecosystems. Both countries’ governments have a willingness to engage with small innovative companies on a project basis, to help fund new ways of doing things. They have shown themselves willing to take manageable risks with small innovators – and they operate within a procurement regulatory framework that allows for and encourages this kind of engagement.

The benefits for the industry are profound. A small company that has successfully carried out an innovative project for government can come out the other side of that engagement not only with a product to commercialise, but with a rock-solid reference customer to take to market.

I am not a protectionist. I believe in open markets and competition. I don’t favour preferential treatment for Australian companies. But equally, I do believe we can make government projects easier for smaller local companies to respond to and in doing so level the playing field.

Vivek Kundra has provided a template from his time as the US government’s first CIO. By creating a public dashboard that provided continuous disclosure of government ICT projects, he made public servants more accountable than ever. For the first time, it was possible to see which projects were on time, which weren’t, which ones were delivered on budget and which ones ran over.

The dashboard alone is thought to have saved the US government billions of dollars in its first years of operation. Could we have a similar dashboard in Australia that rewards public servants who chose to engage with Australian startups to create innovative solutions to their problems.

In the coming weeks I would hope to see direct engagement strategies from the DTO around how they can connect startup innovators with government departments. How cool would it be to see a high-profile government hackathon – where departmental secretaries acted as judges (or even teams members) – to encourage some new thinking around difficult government issues.

Overall, the DTO is a necessary and worthwhile initiative: I absolutely believe this program has the potential for turbo-charging engagement with the private sector.

And it will be private sector influence that ultimately drives the kind of disruptive, citizen-centric changes that will transform government. It’s a tough job, but an important one. I, for one, would be happy to give them a hand.

 

Jonathan Barouch is founder and CEO of location-based social analytics company Local Measure. Local Measure is headquartered in Sydney with international offices in Singapore, London and the US.

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