Australian Government ICT Trends Report 2014-15

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<ul><li><p>Australian Government ICT Trends Report </p><p>2014-15 </p><p> VERSION 1.0 | MARCH 2016 </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 1 </p><p> Australian Government ICT Trends Report </p><p>2014-15 </p><p> VERSION 1.0 | MARCH 2016 </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 2 </p><p>Contents </p><p>Contents 2 </p><p>1. Executive Summary 6 </p><p>2. Notes 7 2.1 Cohort definitions 7 2.2 Agency cohort composition 7 2.3 General notes 8 2.4 Applicable qualifications 9 </p><p>3. Metrics: ICT Spend 10 3.1 Total ICT spend as a proportion of total agency departmental spend 10 3.2 ICT spend as a proportion of total agency operating spend 11 3.3 Business as usual (BAU) ICT spend as a proportion of total ICT spend 12 3.4 ICT operating vs. ICT capital spend 13 3.5 Proportion of ICT spend by service tower 14 3.6 Proportion of ICT spend by cost element 15 </p><p>4. Metrics: ICT FTE 16 4.1 Total ICT FTE 16 4.2 Non-ICT personnel supported per ICT personnel 17 4.3 Internal ICT FTE 18 4.4 Internal ICT FTE vs. APS employees by pay grade 2014-2015 19 4.5 Internal and external ICT FTE by Business-as-usual (BAU) and Project 20 </p><p>5. Metrics: Infrastructure 21 5.1 Virtualisation 21 5.2 End user devices Mix (in percentage terms) of desktop, laptop, thin client and </p><p>tablet devices 22 5.3 Storage 23 </p><p>6. Appendix 24 6.1 Glossary 24 6.2 Definitions 24 </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 3 </p><p>Copyright </p><p>The Department of Finance is licensed to use, reproduce, adapt, modify, distribute and communicate the information contained in this report. </p><p>With the exception of the Commonwealth Coat of Arms, and subject to any copyright notices contained in individual documents, all material presented in this report is provided under a Creative Commons Australia Licence (Attribution-NonCommercial 3.0 Unported) (http://creativecommons.org/licenses/by-nc/3.0/). </p><p>To the extent that copyright subsists in a third party (such as in the material relating to the definitions of cost elements and service towers at pages 9 to 11), permission will be required from the third party to reuse the material. The document must be attributed: Australian Government ICT Trends Report 201415. </p><p>Use of the Coat of Arms </p><p>The terms under which the Coat of Arms can be used are detailed on the following website: http://www.itsanhonour.gov.au/coat-arms/. </p><p>Contact us </p><p>Inquiries regarding the licence and any use of this data are welcome at: </p><p>Investment, Capability and Assurance Branch </p><p>Efficiency, Assurance, and Digital Government </p><p>Governance and APS Transformation </p><p>Department of Finance John Gorton Building King Edward Terrace Parkes ACT 2600 </p><p>Email: ICTbenchmarking@finance.gov.au </p><p>http://creativecommons.org/licenses/by-nc/3.0/http://www.itsanhonour.gov.au/coat-arms/</p></li><li><p>Australian Government ICT Trends Report 2014-15 | 4 </p><p>ICT SPEND </p><p>END USER DEVICES </p><p>ICT FTEs </p><p>NON-ICT PERSONNEL SUPPORTED PER ICT PERSONNEL (2014-15) </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 5 </p><p>ICT SPEND BY COST ELEMENT </p><p>ICT SPEND BY SERVICE TOWER </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 6 </p><p>1. Executive Summary </p><p>The Australian Government introduced the ICT Benchmarking programme to facilitate better practice and rigour in monitoring the efficiency and effectiveness of ICT investments. The Australian Government ICT Trends Report 201415 (the Report) informs the general community and industry about Government ICT use and expenditure. </p><p>All Non-Corporate Commonwealth agencies participate in the annual ICT benchmarking exercise. Agencies provide data about their ICT costs, personnel and infrastructure. The Department of Finance (Finance) uses the data to assess the whole-of-Australian-Government ICT environment. </p><p>The Report provides aggregate figures on: </p><p> total ICT expenditure, breakdowns of expenditure by service tower, and by cost element; </p><p> ICT personnel, including by service tower, whether internal or external, and by level; and </p><p> ICT infrastructure deployed by agencies, including numbers of servers and desktop devices. </p><p>Key findings of the Report are: </p><p> in 2014-15, the Australian Government had ICT spend of around $5.6 billion; </p><p> compared to 2008-09, the total reported ICT spend has increased by 2.7 per cent (from $5.5 billion to $5.6 billion) while the total agency spend decreased by 10.6 per cent (from $63.9 billion to $57.1 billion). This has resulted in an increase of ICT spend as a proportion of total agency spend from 8.6 per cent to 9.9 per cent; </p><p> compared to 2013-14, the total reported ICT spend has increased by 6.8 per cent (from $5.3 billion to $5.6 billion) while the total agency spend increased by 5.9 per cent (from $53.9 billion to $57.1 billion). The proportion of ICT spend to total agency spend has remained stable (from 9.8 per cent to 9.9 per cent); and </p><p> business-as-usual ICT spend remains within 70 per cent of total ICT spend, indicating a reasonable proportion of funds is directed to building new capability. </p><p>Finance, in consultation with agencies, has reviewed the programme. A revised framework is proposed to be phased in over the next two years, to provide increased transparency, analysis, and value to the Government and agencies. This will include changes to this Report. </p><p>Finance welcomes questions or feedback on this report via email at ICTbenchmarking@finance.gov.au. </p><p>mailto:ICTbenchmarking@finance.gov.au</p></li><li><p>Australian Government ICT Trends Report 2014-15 | 7 </p><p>2. Notes </p><p>2.1 Cohort definitions In 2014-15, agencies remains in the same cohort as in 2013-14 which were classified based on their ICT spend in the 2012-13 financial year. </p><p> Large agencies are defined as those that make up the top 85 per cent of ICT spend (above $42 million in ICT spend); </p><p> Medium agencies are defined as those that make up between 85 and 95 per cent (10 per cent) of ICT spend (between $42 million and $15 million in ICT spend); </p><p> Small agencies are defined as those that make up between 95 and 99 per cent (4 per cent) of ICT spend (between $15 million and $3 million in ICT spend); and </p><p> Micro agencies are defined as those agencies that contribute the bottom 1 per cent of total ICT spend (below $3 million in ICT spend). </p><p>2.2 Agency cohort composition The graph below shows the composition of the agency cohort based on ICT spend in 2014-15. </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 8 </p><p>2.3 General notes </p><p>The report should be considered in the wider context ICT spend and other metrics should be viewed in conjunction with other efficiency indicators and the Governments broader agenda. </p><p>The data underlying this analysis may change This analysis is based on the data presented to Finance, by agencies, as at 30 November 2015. The findings in this report is subject to the provision of any updated data by agencies after the date of this analysis. </p><p>Machinery of Government (MOG), incomplete data, and improvements in the quality of agency reporting makes comparison over time difficult Only agencies that have provided complete and valid data for the calculation of each metric, in all years, have typically been included in the analysis; this is assessed on a metric by metric basis. Data presented in previous iterations of the ICT trends reports may vary to those presented in this report, both as a result of these factors, and as a result of refinements to the data quality. These variations are generally of low significance in the context of whole-of-government reporting. </p><p>Agencies have been provided the opportunity to assure the accuracy of their data All data provided have been assessed using a standard statistical methodology; data points that were found to be statistically significant, or shown to have significant variations from data provided in previous years, have been identified to agencies. Agencies were then invited to confirm the accuracy of their data; as such all data included in this analysis are considered to be accurate and, where possible, all available data have been included in the analysis. </p><p>Total spend metrics excludes intra-government spending Intra-government spending is excluded from whole-of-government spend analysis to eliminate double-counting of spend. </p><p>Most of the data presented relates to Large and Medium cohort agencies Micro and Small Cohort agencies are excluded from some analyses as relevant data is not collected from them. </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 9 </p><p>2.4 Applicable qualifications The following qualifications apply to all the metrics presented in this Report (unless otherwise noted): </p><p> All ICT spend data exclude administered funds and non-reporting agencies. </p><p> All spend data are represented in real terms with the 2014-15 financial year base CPI indexation applied. </p><p> Estimation of non-reporting is quantified by applying a CPI indexation of data from relevant years as reported in the ICT benchmarking survey. </p><p> Data are inclusive of estimated spend for identified areas of non-reporting. </p><p> Data presented are for the Large, Medium, Small, and Micro cohorts and excludes military ICT spend. </p><p> Variations from previously reported figures may occur when agencies provide </p><p>updated information (including material adjustments to prior years figures) or when material misstatements were identified. Variations may also occur when methodological improvements have been implemented. </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 10 </p><p>3. Metrics: ICT Spend </p><p>3.1 Total ICT spend as a proportion of total agency departmental spend </p><p> This graph shows total ICT spend as a proportion of total agency spend. Total agency spend are the costs associated with departmental activities only. </p><p>Compared to 2008-09, the total reported ICT spend has increased by 2.7 per cent (from $5.5 billion to $5.6 billion in 2014-15) while the total agency spend decreased by 10.6 per cent (from $63.9 billion to $57.1 billion in 2014-15). This has resulted in an increase of ICT spend as a proportion of total agency spend from 8.6 per cent to 9.9 per cent. </p><p>Compared to 2013-14, the total reported ICT spend has increased by 6.8 per cent (from $5.3 billion to $5.6 billion) while the total agency spend increased by 5.9 per cent (from $53.9 billion to $57.1 billion in 2014-15). The proportion of ICT spend to total agency spend has remained stable (from 9.8 per cent to 9.9 per cent). </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 11 </p><p>3.2 ICT spend as a proportion of total agency operating spend </p><p> This graph created by the Australian Department of Finance based on Gartner research. *International benchmarks source: Gartner IT Key Metrics Data 2016: Key Industry Measures: Government -- National and International Analysis: Multiyear (December 2015). </p><p>ICT spend as a proportion of total agency operating spend is another view of ICT investment levels in terms of the role ICT plays in overall spending patterns. Typically, a high proportion of ICT spend to total operating spend indicates that the organisation considers ICT as a strategic enabler. </p><p>Australian Government ICT spend as a proportion of total agency operating spend has been trending upward since 2012-13 (from 10.3 per cent to 12.2 per cent). Over the same time period, international governments benchmark has been trending downward (from 9.1 per cent to 8.6 per cent). </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 12 </p><p>3.3 Business as usual (BAU) ICT spend as a proportion of total ICT spend </p><p> This metric provides an overview of BAU ICT spend as a proportion of total ICT spend. BAU ICT spend is defined as all ICT related costs outside of projects. </p><p>Since 2008-09, ICT investments on BAU remain within the recommended target (70 per cent) set by the Review of the Australian Governments Use of Information and Communication Technology1. </p><p>1 http://www.finance.gov.au/publications/ICT-Review/ </p><p>http://www.finance.gov.au/publications/ICT-Review/</p></li><li><p>Australian Government ICT Trends Report 2014-15 | 13 </p><p>3.4 ICT operating vs. ICT capital spend </p><p> ICT operating and capital spend and their respective proportion of total agency operating and capital spend have fluctuated over the last seven years. However, in 2014-15 they have mainly returned to the levels of 2008-09. </p><p>Since 2013-14, ICT operating spend has increased by 10 per cent (from 4.0 billion to 4.3 billion) while total agency operating spend has remained at a similar level (around $46 billion). This has resulted in an increase of ICT operating spend as a proportion of total agency operating spend from 8.6 per cent to 9.4 per cent. Over the same period ICT capital spend has remained stable (around $1.3 billion) while total agency capital spend has increased by 40 per cent (from $7.8 billion to 10.9 billion). This has resulted in a decrease of ICT capital spend as a proportion of total agency capital spend from 17.0 per cent to 11.8 per cent. </p><p>Traditionally, capital spend is viewed as initiating a return on investment; whereas operating spend refers to the day-to-day ICT costs. However, if agencies move to outsourcing, a decline in capital spend and an increase in operating spend would be expected. Associated scalability and flexibility provide additional efficiencies. For example, the take-up of external cloud computing means agencies only pay for what they use, and reduce capital costs by investing that money in projects or business as usual. </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 14 </p><p>3.5 Proportion of ICT spend by service tower </p><p> This graph shows breakdown of ICT spend by service tower. </p><p>Applications is the highest area of ICT spend, being more than three times as high as the second-largest service tower (being End User Infrastructure). Applications, End User Infrastructure, and ICT Management together made up around 60 per cent of total ICT spend in 2014-15. </p><p>Since 2008-09, the following service towers have increased their shares of total ICT spend: Applications (from 34 per cent to 37 per cent), ICT Management (from 9 per cent to 11 per cent), Midrange (from 8 per cent to 9 per cent) and Other (consisting of Storage, Gateways, LAN &amp; RAS, Helpdesk, and Facilities) (from 12 per cent to 16 per cent). Meanwhile, the following service towers have decreased their shares of total ICT spend: End User Infrastructure (from 15 per cent to 12 per cent), Mainframe (from 7 per cent to 5 per cent), Voice Services (from 7 per cent to 5 per cent) and WAN (from 9 per cent to 7 per cent). </p></li><li><p>Australian Government ICT Trends Report 2014-15 | 15 </p><p>3.6 Proportion of ICT spend by cost element </p><p> This graph shows the breakdown of ICT spend by cost element. </p><p>Spend on Internal Personnel and Services Outsourced to External Providers together made up over 51 per cent of total ICT spend in 2014-15. </p><p>Since 2008-09, the following cost elements have increased their shares of total ICT spend: Internal Personnel (from 24 per cent to 25 per cent), Services Outsourced to External Providers (from 21 per cent to 26 per cent), and Software (from 16 per cent to 17 p...</p></li></ul>