Public sector digital transformation: a quick guide

2 April 2019

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Produced by the Parliamentary Library’s Cyber and Digital Research Group
Philip Hamilton
Politics and Public Administration Section

Many governments around the world are undertaking digital projects.[1] However, there is debate about the extent to which government initiatives could be characterised as ‘digital transformation’.[2]

In broadly chronological order, this Quick Guide provides brief background information on a variety of recent and current initiatives in the Australian federal public sector associated with ‘digital transformation’, as well as links to relevant sources of information.

No assessments are made of the extent to which the initiatives meet the characteristics of ‘digital transformation’, as defined in the next section.

Digital transformation

What is ‘digital transformation’?

Although in relatively widespread use, the meanings of the terms ‘digitisation’, ‘digitalisation’ and ‘digital transformation’ are not precisely defined or agreed upon. The working definitions below have been adapted from Forbes media and the views of a senior information manager at the International Atomic Energy Commission.

Digitisation is the conversion of analog data (recorded on media such as paper, magnetic tape, or microfiche) into a digital form. Benefits of digital forms include: reduced storage costs; improved access, searchability, and transferability; and the possibility of further processing of data that was previously difficult to access or collate.

Digitalisation refers to the automation made possible by digital processes. Efficiencies can result when digital technologies enable previously separate processes to be linked and integrated, thereby lowering production costs, and creating options for new customer experiences (for example, providing customers with access to an online inventory or catalogue). As a generalisation, these services tend to augment or accelerate existing business operations without changing their fundamentals.

Digital transformation goes further, challenging the structure of an operation and its business model. Digital transformation enables services to be performed in completely new ways, or enables entirely new services to be devised and delivered. However, aspects of these transformative processes can pose challenges for employment and privacy arrangements developed in the pre-digital era. For example:

  • based on business models made possible by digital technology, AirBnB and Uber offer services that have profoundly changed the industries in which they operate and
  • internet-based platforms such as Google and Facebook have created new and still-evolving economic ecosystems in which data and its ‘shareability’ may be the main assets.

Australian federal public sector initiatives discussed in this Quick Guide

Initiatives covered in this Quick Guide include:

  • the Australian Government’s Digital Transformation Agenda
  • Digital Transformation Agency
  • Digital Transformation Strategy and government services
  • ICT procurement
  • Digital Continuity 2020 and Digital Records Transformation Initiative
  • Regulation as a Platform
  • Digital identity
  • data sharing by government entities and
  • cybersecurity in government entities

The Australian Government’s Digital Transformation Agenda

In 2014 the Government conducted an Audit of Australian Government ICT that reviewed investment over the previous three years on: business-as-usual ICT; and ICT projects.

Since the 2015–16 Budget the Australian Government has been progressing a Digital Transformation Agenda to ‘drive innovation and make it easier for individuals and businesses to access government services’.

The Cabinet’s Digital Transformation and Public Sector Modernisation Committee has oversight of the Digital Transformation Agenda. The Australian Digital Council (ADC), which is similar to a ministerial council of the Council of Australian Governments, performs an inter-governmental coordinating role and first met in September 2018. The ADC is responsible for ‘overseeing the development of Australia’s digital capability’ and its purpose is to ‘establish proposals for better cross-government collaboration on data and digital transformation to drive smarter service delivery and improved policy outcomes’.

Public Service Modernisation Fund

In a novel development for the Efficiency Dividend, the 2016–17 Budget provided that $500 million of projected savings would be reinvested in reforms ‘such as automation of public services and business re-engineering’. In 2016–17 funding was included in the forward estimates, but without specific details. Although not a formal component of the Digital Transformation Agenda, the Public Service Modernisation Fund outlined in the 2017–18 Budget is funding a number of initiatives expected to ‘deliver quality government services at lower cost and use leading technology and collaborative approaches to address complex problems facing society’. Over three years from 2017–18:

  • $350 million is for ‘transformation and innovation’, which comprises better use of data within government; streamlining and improving user access to government services; strengthening APS workforce capability; and more efficient corporate services and
  • $150 million is for ‘agency sustainability’, which aims to support ‘a number of agencies [in] their transition to more modern and sustainable operating models’.

Digital Transformation Agency

Established in July 2015, the Digital Transformation Office (DTO) was an executive agency reporting to the Minister for Communications. The DTO’s inaugural leader, Paul Shetler, was recruited from the UK’s Government Digital Service. The role and function of the DTO was described as follows:

The DTO will comprise a small team of developers, designers, researchers and content specialists working across government to develop and coordinate the delivery of digital services. The DTO will operate more like a start-up than a traditional government agency, focussing on end-user needs in developing digital services.

The DTO was replaced, in November 2016, by the Digital Transformation Agency (DTA), an executive agency in the Prime Minister and Cabinet portfolio. At that time, the then-Minister for Human Services outlined the DTA’s new role:

  • provide strategic and policy leadership across the Government on ICT and digital service delivery, including ICT procurement policy
  • set standards for government ICT and digital service delivery projects
  • coordinate funding of ICT projects
  • lead an ICT program management office for the Government and
  • provide expertise and advice across Government on ICT and digital topics.

As noted by the Senate Finance and Public Administration References Committee in March 2018, the DTA’s role is broader than that of the former DTO:

The DTA has an oversight and advisory role. It has oversight of all ICT projects worth greater than $10 million that are either being developed, or that are going through a significant transition, or that provide a service that affects a significant number of Australians. The DTA will also become involved where it has been specifically asked to help build capability ... the DTA does not get involved with everyday expenditure and resourcing of ICT operations across government, including outages. (pp. 16–19)

The DTA’s oversight role was also discussed in detail at an Estimates hearing in May 2018 (pp. 148–161). As summarised in a media report, at an Estimates hearing in February 2019 discussion focused on whether the DTA was able to monitor major projects effectively, particularly in view of the premature termination of the Australian Criminal Intelligence Commission’s biometrics project, which was subsequently the subject of an Australian National Audit Office (ANAO) performance report.

Since July 2015 the DTO/DTA has experienced turnover of ministers, CEOs and senior staff. In June 2018, the Senate committee’s report documented changes over the preceding three years, including the departure of the inaugural CEO (Paul Shetler) in late 2016 and the subsequent resignation of another CEO after 13 months at the DTA (pp. 19–20). Also in June 2018, the executive responsible for monitoring ICT projects resigned after nine months at the DTA. The current CEO (since July 2018) is Randall Brugeaud.

Regardless of the outcome of the 2019 federal election, post-election there will be a new minister responsible for the DTA. The Minister for Human Services and Digital Transformation since December 2017, Michael Keenan, announced in January 2019 that he would not contest the 2019 election.

Digital Transformation Strategy and government services

In November 2018 the DTA published the Government’s Digital Transformation Strategy (DTS), Vision 2025: We will Deliver World-leading Digital Services for the Benefit of all Australians. The Minister’s speech and media release provide additional context. The DTS is supported by the Digital Service Platforms Strategy.

The DTS outlines three strategic priorities (‘Government that’s easy to deal with’, ‘Government that’s informed by you’, and ‘Government that’s fit for the digital age’), each with objectives to be achieved by 2025 (see Appendix A of this paper). Also included are examples of ‘what’s going to change’ for families, job-seekers, business owners, and government workers who deliver a service.

Rather than defining digital transformation, the Government’s focus is on its intended outcomes and benefits, as outlined, for example, by the Minister for Human Services and Digital Transformation:

Digital transformation will change how government does things for you. It will mean much less red tape and much more responsive policy. It means we can harness data to deliver social and economic benefits. It will mean the government can be there whenever you need us, but we will stay out of your way when you don’t, so you can go about your life with minimal interference.

A two-page ‘roadmap’ (timeline) lists major projects that will contribute to digital transformation over the next two years. The roadmap page on the DTA website provides more detail about projects, and enables projects to be filtered by the three strategic priorities.

The DTS commits the Government to: annual refreshment and enrichment of the roadmap; publication of yearly action plans; and a public dashboard of performance metrics to track progress (p. 45). Until the dashboard becomes available, a number of sources collate information about various ICT projects (see Appendix B).

Commenting on the DTS, the former CEO of the DTO, Paul Shetler, expressed concerns about how well the DTS sets out how its aims will be achieved. Another commentator considered that although the DTS has an ‘appropriate coherence [this] fundamental redesign of Australia’s public sector ... will need ... the imprimatur of a department of state, a Department of Digital Government, to succeed’.

ICT procurement

ICT Procurement Taskforce

In a statement prior to the 2016 election, Policy for Better and More Accessible Digital Services, the Coalition committed to ‘accelerat[ing] the digitisation of government services and driv[ing] innovation in government by ... establishing a taskforce in the Prime Minister’s Department to reform government ICT procurement policies’. Established in October 2016, the ICT Procurement Taskforce reported in May 2017 that government agencies ‘are concerned that they are being left behind in adopting new and innovative technologies to deliver services’.

As part of its proposed solutions, the Taskforce linked innovation with the participation of Small and Medium Enterprises (SMEs) in ICT procurement. Taskforce recommendations included that government ICT procurement should be ‘structured in a way that enables SMEs to compete fairly to directly provide components of significant ICT projects’.

In its response, the Government accepted and committed to the substance of all recommendations, and has implemented the following measures that are intended to increase opportunities for SME participation in ICT procurement.

SMEs and ICT procurement

The Department of Finance continues to be the lead agency on whole-of-government general procurement policy. However, in November 2016 responsibility for ICT procurement policy was transferred to the DTA.  The DTA manages an ICT procurement portal, which facilitates buyers’ access through whole-of-government arrangements to digital products and services, including: hardware; software; mobile products and services; cloud services; data centres; telecommunications; and volume sourcing arrangements with suppliers such as IBM, Microsoft, SAP and Concur.

The Government expects SME opportunities to be increased through participation in the Digital Marketplace and the Hardware Marketplace, and as a result of an announcement in August 2017 on capping contracts:

From today, Government IT contracts will be capped at a maximum value of $100 million or three years’ duration. This is to allow small and medium sized businesses the opportunity to bid for smaller components of larger projects.

Procurement and contract management: potential areas of risk for digital transformation

Capping contracts at a maximum value of $100 million or three years duration, and increasing the number of SME participants in ICT procurement, will likely tend to increase the number of ICT-related procurements, projects and contracts. By extension, however, this could also increase opportunities for corruption, fraud, or contract mismanagement—areas of risk that have been highlighted in recent reports:

Addressing the perceived risks, the ICT Procurement Taskforce recommended the development of ‘a medium-term strategy for building the Australian Public Service’s ICT procurement capability and culture’.

Addressing the Taskforce’s recommendation, the DTA is collaborating with the Australian Public Service Commission (APSC). The Digital Marketplace was expanded to include ‘approved sellers of digital skills and expertise’, and the DTA offers services to build digital skills across government. ICT procurement capability is not readily identifiable in the suite of options, but the DTA provides assistance in the form of model contracts and other tools. In December 2018 the DTA publicised the completion of programs by more than 120 apprentices, cadets and graduates. The training offered by the APSC includes leading digital transformation and procurement essentials and contract management.

Digital Continuity 2020 and the Digital Records Transformation Initiative

Recordkeeping by Commonwealth government entities is governed by the Archives Act 1983 (Cth):

... the [National Archives of Australia] has the authority to issue standards for Commonwealth records, and to preserve and make accessible the archival resources of the Commonwealth.

Under the Act, ‘Commonwealth records’ cover all information in digital and non-digital formats that is created, used or received as part of government business.

Issued in October 2015, Digital Continuity 2020 is a whole-of-government approach to digital information governance that ‘aims to support efficiency, innovation, interoperability, information re-use and accountability by integrating robust digital information management into all government business processes’.

Through the Public Service Modernisation Fund, the 2017–18 Budget allocated $10.7 million over the forward estimates to ‘develop a whole-of-government digital records management solution to modernise the common function of record-keeping across the APS’. The Digital Records Transformation Initiative (DRTI) aims to support ‘the development of modernised digital records and information capability across Australian Government non-corporate commonwealth entities’. As outlined by the Department of Finance, the four key outcomes of the DRTI are to:

  • make effective use of the smart technology that has emerged, but not yet been incorporated, into records management practices;
  • improve productivity through the use of automation;
  • increase the re-use of information assets across Government; and
  • increase compliance with regulations for the management of Australian Government records.

In November 2018 a DRTI discussion paper sought views on ‘the most effective and efficient way to source modernised digital records solutions’. In early 2019 a ‘next steps’ document noted ‘the importance of aligning with the policies of the National Archives of Australia, in particular ... Digital Continuity 2020’.

Regulation as a Platform

A business unit of the Commonwealth Scientific and Industrial Research Organisation, Data61, undertakes data-focused research and development. Regulation as a Platform (RaaP) is a proof-of-concept project that ‘aims to maximise the value of regulation, as the key data set of government’:

The ultimate aim is to provide free and open access to legislation and regulation via public APIs [Application Programming Interfaces], which will allow users to access the database of endorsed logic rules and a reasoning engine to process rules and data into accessible digital logic.

A diagram outlines the architecture of RaaP. RaaP is a multi-stage process that involves:

  • Converting regulatory rules into machine-readable logic that capture’s the intent and operation of regulation
  • Quality checking these rules and endorsing them for publication on an open platform;
  • Enabling anyone to leverage the regulation data via an open platform API to allow anyone to develop tools and services to simplify end-user interactions with regulation to reduce costs, time and complexity.

Digital identity 

One of the objectives of the Government’s Digital Transformation Strategy is that by 2025 people ‘will be able to choose a secure and easy to use digital identity to access all digital government services’.

The Government is undertaking a review of national arrangements for the protection and management of identity information. However, it was reported in January 2019 that the inquiry is ‘more than two months behind schedule as the Coalition mulls a new iteration of the National Identity Security Strategy’.

The DTA also has a role through its development of the Trusted Digital Identity Framework (TDIF). In late 2018 the Australian Strategic Policy Institute published Introducing Integrated e-government in Australia, the main points of which, and the DTA’s response, were summarised in a media reportA subsequent media report summarised a privacy impact assessment of the TDIF.

Data sharing by government entities 

The website of the Department of the Prime Minister and Cabinet (PM&C) outlines initiatives in relation to public data (i.e. ‘information collected or generated by the Australian Government’).

In March 2016 the Government asked the Productivity Commission (PC) to undertake an inquiry into ‘the benefits and costs of options for increasing availability of and improving the use of public and private sector data by individuals and organisations’. The PC published its report on data availability and use in May 2017. Released in early 2018, the Government’s response adopted the three key features of the PC’s proposed framework, and the 2018–19 Budget provided a total of $65.1 million over 2018–22 for the new arrangements:

In relation to data sharing and release, the following measures have been undertaken:

  • A consultation paper on the Data Sharing and Release Bill was released in July 2018, and the submissions received are available on the PM&C website.
  • In March 2019 the Minister for Human Services and Digital Transformation released Sharing Data Safely guidelines and a best practice guide to assist government agencies on ‘how to best share and release government data in an appropriate manner’ in accordance with five key Data Sharing Principles. The interim NDC has advised that initially the guidance will complement agencies’ existing legislative data protection obligations, with the proposed Data Sharing and Release legislation expected to provide a statutory basis for the Data Sharing Principles.

Cybersecurity in government entities 

The latest version of the Protective Security Policy Framework (PSPF) came into effect in October 2018. The PSPF assists Australian Government entities to ‘protect their people, information and assets, at home and overseas’. Under the PSPF, government entities seek to achieve information security through attention to four key areas: sensitive and classified information; access to information; safeguarding information from cyber threats; and robust ICT systems. Entities are guided by the Australian Government Information Security Manual and an online hub for cyber security information, both produced by the Australian Cyber Security Centre within the Australian Signals Directorate.

The ANAO conducts performance audits of selected entities’ cyber resilience and cybersecurity arrangements. After the ANAO reports, the Joint Committee of Public Accounts and Audit (JCPAA) conducts inquiries into entities’ cyber resilience and cybersecurity arrangements, for example in 2017 and 2019. The scope of the 2019 inquiry includes the cyber resilience of the Department of Parliamentary Services (DPS). In February 2019, there was a malicious intrusion into the Parliament House computer network operated by DPS.

In March 2019 the DTA announced a Whole-of-government Hosting Strategy. The new Digital Infrastructure Service aims to ‘reduce data sovereignty, ownership and supply chain risks ... ensure government hosting services are more efficient and cost-effective [and] provide certainty on the Australian Government hosting operating environment for industry and agencies’.

The implementation of new technologies—recent reports, reviews and cases

A number of recent reports, reviews and cases have examined aspects of the Commonwealth public sector’s implementation of new technologies.

ANAO reports

Reports by the ANAO often examine, among other matters, ICT projects and digital transformation.

Government reviews—APS, PGPA Act and blockchain

Current review of the APS

In May 2018 the Government commissioned a major review of the Australian Public Service (APS), led by David Thodey. The review’s terms of reference state that ‘to ensure the APS is fit-for-purpose for the coming decades’ its capabilities must include ‘understand[ing] and deploy[ing] technology and data to drive improvement’. The DTA’s submission to the review proposed that ‘changing some current settings will allow for a more contemporary, digital public sector into the future’.

In March 2019 the APS Review published several documents outlining its preliminary conclusions and directions. In Priorities for Change, the APS Review observed that ‘a move to networked and common arrangements would facilitate greater mobility and collaboration, build digital capability, and make the most of automation and AI in service delivery’. Trade media has summarised the ICT-related aspects of Priorities for Change.

The review is scheduled to report to the Government in the first half of 2019.

Review of the Public Governance, Performance and Accountability Act 2013 and associated Rule

In September 2018 the Department of Finance published the report of the independent review of the Public Governance, Performance and Accountability Act 2013 and associated Rule (co-authored by David Thodey). The report warned that ‘risk aversion in the face of new opportunities to use technology to improve service delivery will mean that new opportunities are not taken, or taken later than they could have been’. An earlier (2015) Independent Review of Whole-of-government Internal Regulation included recommendations about cloud computing, data centres, and whole-of-government ICT and procurement arrangements (the Parliamentary Library has published two brief overviews of the review’s major recommendations).

DTA evaluation of blockchain

In February 2019 a DTA report evaluating blockchain technology as a possible tool for government concluded that ‘when applied to various pilots or considered against alternative technologies, gaps become evident across both the technical and business facets of its implementation’. The DTA has also released Blockchain Overview: Australian Government Guide. In October 2018 the DTA observed:

... blockchain is good for low trust engagement where you don’t know who you’re dealing with, you have low trust in that person or business, but you have a series of ledgers that can give you some validation. [However] generally speaking when government is engaging with someone, we want to have a trusted relationship with them.

Parliamentary reviews

In June 2018 the Senate Finance and Public Administration References Committee tabled the report of its inquiry into digital delivery of government services. The DTA’s submission outlined achievements and priorities as at September 2017.

The JCPAA is currently conducting an inquiry into Australian government procurement contract reporting. As outlined in its Complementary submission guidance, the Committee’s ‘five areas of focus’ include the APS’ capability and capacity.

Select recent cases

Automated decision-making and communication of decisions

The Australian Public Law website summarised a recent case in the Federal Court of Australia concerning automated decision-making and communication:

[A] taxpayer received a computer-generated letter from the Australian Taxation Office (ATO) ostensibly waiving most of the general interest charge (GIC) on a tax debt. The ATO subsequently advised the taxpayer that he was, in fact, liable to pay additional GIC as the letter had been issued in error. ... On appeal, the majority of the Full Federal Court found that no decision had been made as the automated letter was not accompanied by the requisite mental process of an authorised officer.

An application by the taxpayer to the High Court of Australia for special leave to appeal the decision was refused. One law firm observed  that the outcome could ‘breed uncertainty in the minds of taxpayers and their representatives when such correspondence is received from the ATO’ and that ‘taxpayers potentially losing trust in the ATO’s decision making processes undermines the integrity of the whole system’.

Automated decision-making was the subject of a media report in July 2017, which noted that ‘Australian law explicitly allows computers to make important decisions previously made by the ministers or staff of at least 11 federal government departments’.

Public servants’ personal use of social media

In a complex case currently before the High Court, a former employee of the previous Department of Immigration and Citizenship used her personal Twitter account to post anonymous tweets critical of the Department. Depending on how the case proceeds, it may, among other matters, clarify public servants’ use of social media, particularly in the context of the APS Code of Conduct in section 13 of the Public Service Act 1999 (and possibly the implied freedom of political communication in the Constitution).

Unanticipated levels of access to data

In September 2018 it was reported:

The South Australian Government has shut down guest access to the land titles registry website after it discovered a single IP address had harvested the information en masse. ... While there is no suggestion it was a data breach — the website was working exactly as designed — it was not the Government's intention to make the information so easily available.

An expert in networks and security from the University of Sydney observed that ‘it would’ve been very simple [for the agency to have included a feature] to limit the number of accesses to some small number per minute’. Speculating on the motive for the mass download, the expert observed:

... maybe they were after data that would help them in terms of social engineering, making cold calls to people ... On the more nefarious end of the spectrum you could possibly argue that this data could be linkable to other data that is acquired somewhere else, like health data or some financial data.

The incident provides an example of the range of scenarios that must be considered by government agencies and contractors when planning and implementing digital transformation initiatives, in this case access controls for publicly-available data.

Appendix A: Digital Transformation Strategy (2018)

In November 2018 the DTA published the Government’s Digital Transformation Strategy (DTS), Vision 2025: We will Deliver World-leading Digital Services for the Benefit of all Australians. The DTS outlines three strategic priorities, each with subsidiary objectives to be achieved by 2025:

1. Government that's easy to deal with

To make government easy to deal with, you need simple and intuitive services that support your needs and life events, while eliminating the need to deal with multiple agencies or layers of government.

Our digital services must also be secure and convenient to access using the devices of your choice.

  • You will be able to access all government services digitally.
  • You will have seamlessly integrated services that support your needs and life events.
  • You will be able to choose a secure and easy to use digital identity to access all digital government services.
  • You will have access to alternatives if you are unable to access services in a digital way.

2. Government that's informed by you

We will harness the power of data to improve services and make better and faster decisions.

We will use data analysis to make sure our services meet your needs, to understand better what people and businesses expect from the government and to improve future services. In doing this, we will ensure that you retain control over your information.

  • Services will be smart and adapt to the data you choose to share
  • Policy and services will draw on data and analytics
  • Advanced technologies will improve decision-making and be transparent and auditable
  • Earn your trust through being strong custodians of your data

3. Government that’s fit for the digital age

Australians expect government to be easy to deal with and to provide smart and convenient services.

We will grow our digital skills and partner with innovative businesses to deliver the right outcomes. Where we use new platforms they will be efficient and sustainable. Finally, we must be accountable for delivering digital transformation.

To deliver on these expectations and achieve our 2025 vision, we need to uplift our digital skills and capabilities and partner with innovative organisations to deliver the right outcomes.

  • Equip our people and Australian businesses with the skills necessary to deliver world‑leading digital services
  • Adopt better ways of working that bring people together quickly and efficiently and reduce risk
  • Collaborate with other sectors, including small and medium‑sized enterprises, community organisations and academia
  • Develop sustainable platforms that we can share across government
  • Deliver value for people and businesses by managing costs and risk

Appendix B: sources of collated information about ICT projects

The Digital Transformation Strategy (DTS), launched in November 2018, promises a public dashboard of performance metrics to track the progress of DTS-related projects (p. 45). Until the dashboard becomes available, a number of sources collate information about various ICT projects:

The DTA monitors all digital and ICT initiatives with a budget of more than $10 million and not classified as secret or top secret. However, only limited information has been made public:

[1].   The website provides resources for public servants, including The Digital Government Atlas, which comprises links to ‘digital government’ guides and resources from many countries.

[2].   A submission to a recent Senate committee inquiry into digital delivery of government services provides an introduction to this debate. The submission contends that, notwithstanding that ‘around the world there are many highly regarded government information web sites and cases where online transactions have hugely improved processes’, the ‘dominant “government as a service industry” paradigm has led e-government (digital government, or whatever is the current term) down a blocked path’.


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