The agency’s tender to hire a consultant to build internal capability on core IT projects could result in seismic cultural change in the organisation … if it really does it.
The Australian Digital Health Agency has put out a tender for between $250,000 to $500,000 for an appropriate consultant to help them develop a strategy to, essentially, fire as many of their outsourced consultants as they can moving forward.
The tender is a little more polite in its wording, describing the work as helping the Agency develop “a set of principles, a framework, an operational model and a proposed roadmap for insourcing products and services”.
Beneath the significant irony of the Agency having to get help to get rid of the help is a potentially seismic change in how the Agency and, likely, the federal government through the Department of Health and Aged Care, builds and delivers vital national digital health infrastructure moving forward.
Setting aside the polite wording and government tender-speak, the intention of the tender is clear: the Agency, and presumably DOHAC, want to have most of the core operational and strategic IT capability sitting within the organisation, not outside of it.
A spokesperson for the Agency put this way:
“The Agency is reshaping and evolving the national digital health infrastructure, including considering the optimal delivery model for this complex information technology services portfolio.
“The intent is to ensure the Agency has appropriate capability to support and complement any external partners to maintain a consumer focused, safe and sustainable national digital health infrastructure now and into the future”.
But no matter how you pitch it, the idea behind this tender has huge operational and cultural implications for an organisation like the ADHA.
If it does it right, it will understand the real issues of what it is attempting far more intimately, potentially be able to make better decisions around IT, and in a more timely manner – again, if it gets it right.
One important implication of such a move is you can no longer point to your consultant and use the old “we hired IBM” excuse. It will significantly increase internal accountability within the Agency at the highest level, and when you do that it tends to have a cascade effect through an organisation. Everyone has to be in a line and well led if you are where the buck stops on getting things right or wrong on such vital projects for a country.
It’s a massive change.
If you’re Accenture, which has the annual contract to keep the increasingly creaking My Health Record infrastructure up and running for about $100 million per year, you would have to be little bit upset this week.
The tender lists what IT infrastructure and projects are immediately in play and the list is not good for the likes of the big global consultants and some of global platform providers. It includes the My Health Record, My Health App, Application Programming Interface Gateways, Infrastructure/data centres, Healthcare Information Provider Service, Real Time Prescription Monitoring System, Provider Connect Australia and Electronic Prescribing.
That list is nearly everything the ADHA does in terms of IT infrastructure and if you match up the external providers to the list there are lot more consultants and tech providers outside of Accenture who will be running about their office apoplectic this week trying to work out if they are in scope of getting fired and if so when.
The tender reads like all of them are in scope.
The problem likely will be the timeframe and the ability of the Agency to do such a massive transformation of their operational and management capability.
The tender, which is only open for one month (closes 30 July at 2pm), says that the Agency would like to start implementing its new in-house capabilities as early as the last quarter of this year.
That seems wildly optimistic, but there might be a reason for the rush – some of the Agency’s biggest external contracts are due to expire pretty soon (see below).
It’s hard to see how it might be feasible in any way to be started on such a big project this year, other than the Agency having in place protocols and an agreed plan moving forward. Notwithstanding the tender does suggest that the whole project is going to take be between two and five years.
But is that enough time for such a massive organisational transformation?
A big issue with timing is what the Agency might be going to do with some big external contracts that are up for renewal in the not too distant future.
The biggest is probably the contract with Accenture to keep the My Health Record switched on and running. It expires 30 June 2025 (AusTender contract notice CN3902911)
Another largish contract with Deloitte Consulting for “building a health information gateway that will replace the My Health Record’s Oracle API gateway”, expires on the 4 July 2025 (AusTender contract notice CN3791712)
The fact is the Agency until now outsources just about everything it does in IT, and they do it with either the big consultants or big US software giants. If you look at the tender list, it even says “infrastructure/data centres” are in scope … Microsoft and Amazon, perhaps.
The tender raises a lot of questions we haven’t had time to get answered by the time we went to press, but here are some we will try get to.
We’ve asked the ADHA to provide us a full list of all their external IT suppliers, what their contracts are for, and when they are up. That’s going to be interesting, but it looks like that might be north of $150 million per annum’s worth of external work that the Agency is going to have a serious look at taking in-house.
The next question is for the government.
If it is going to make the ADHA undertake such a massive transformation in how it operates, then it surely couldn’t expect the ADHA to do it without some significant new money directly going to the Agency over the period of the transformation. The idea of such a move is not just to change culture and operational effectiveness, it’s to save a lot of money.
If you’re spending something like $150 million now on external consultants each year to do your IT work, how much of that is the government going to swap back into the ADHA budget over time to compensate?
Good IT leadership and talent is not cheap, and in such a giant transformation there will surely be a lot of hit and miss before things settle down.
Then there is a bigger issue of culture change and leadership capability.
Anyone who has run an organisation with a lot of smart IT people in it will know that the ADHA might be in for a bit of shock. IT people are smart, headstrong because they’re so smart, and, what most people don’t realise, they are very creative people. Some would make great artists.
You couldn’t ask for a bigger change to the culture of an organisation than trying to bring in talent like this and corral it well enough moving forward to do transformation national IT health projects. It’s going to be great if the Agency can do it, but very, very hard to get it right.
An ADHA that does strategy, administration and then outsources its core operational capability to consultants is a very different beast to an ADHA that does most of everything in-house, including core strategy development.
In essence the leadership and management of the ADHA will have to transform itself over time to be able to run such a different organisation. And inevitably there will need to be new leadership within the Agency because as good as the leadership might be now, this tender is proposing a very different beast moving forward.
Organisational change of the nature implied in this tender, if the government and the ADHA are really serious about doing what this tender is implying, is seismic.
I wonder how much thought the leadership inside the ADHA has given to the implications of such significant change to how the organisation is run and managed day to day going forward?
I guess a good consultant could help them with that.
Note: The Agency is hosting an industry information session on Monday 15 July in Canberra where technology providers, clinical, terminology and standards peak bodies and key stakeholders are invited to learn about the next wave of digital health infrastructure transformation. You are invited to attend by registering here.