1. Local Government Finance Professionals Conference
Alan Hansell IBRS Pty Ltd
19/10/17

2. IBRS Local Government Finance Professionals
My Objective
Help you to:
Contribute to digital and business transformation programs in Council
Establish business partnership arrangements with the IT department in Council
Better understand IT management concerns as the function reports into CFO or Corporate Service function
Sources:
Survey responses - interviews with senior ICT and business managers in a cross section of Councils - NSW, Victoria, ACT, SA and Qld. in 2016 / 17
Survey report published July, available on ibrs.com.au
IBRS Local Government Finance Professionals

3. IBRS Local Government Finance Professionals
Agenda
Survey - Major Issues and Priorities
Demand and Supply Roles
Council Case Histories 1 - 3
IT and Finance – Why Cloud et al?
Take Away or Do Differently
IBRS Local Government Finance Professionals

4. Issues and Concerns Identified
IT Management’s Current Priorities are:
1 Providing a secure environment
2. Enabling (digital) transformation of business processes
3. Attracting and Retaining skilled IT and business professionals, eg in regional councils
4. Implementing business solutions on time and within budget
IBRS Local Government Finance Professionals

5. Issues and Concerns Identified
Respondents stated Transformation (Digital) was being driven by in ranking order:
1. IT management
2. The Executive and IT management jointly
3. The Executive
4. Shared Business and IT management responsibility
Take away: IT managers claim business managers, including CFOs, are not participating in the transformation program.
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6. Issues and Concerns Identified cont’d.
Unable to get funding to
Improve service delivery and
Implement digital / business transformation
For instance IT Spending to revenue:
Large councils it was as high as 6% pa – Transformation feasible
Average IT Spend to Revenue = 3.5% pa – Transformation slow
In most regional councils it was 1.5% pa – Transformation impracticable
But: Some Victorian councils have set aside $1m+ pa * 4 years to transform
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7. IBRS Local Government Finance Professionals
Demand and Supply side roles for Enterprise Information Systems - Simplified
Supply
Demand
CIO
Business
Managers
IT Resource
Allocation
Business Managers
Identify ‘information
on demand’ needed by clients
Sell and justify solutions
Define requirements
Track and publish benefits
CIO / ICT Managers:
Shape client expectations
Supply integrated systems, eg:
Process transactions
Provide management reports
Manage data security program
Comment: ‘IT is an enabler only’ ie business professionals must lead not IT staff
- Director Corporate Services - large NSW Council
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8. Council Merger & Transformation # 1
CIO and Executive specified phased transformation program
CIO and Business Transformation Director report to CEO
Defined new business operations processes for merged council
Identified ‘best fit’ Finance and business systems from each council
Installed latest version of best fit systems
Defined new Chart of Accounts for merged council
Implemented new systems (Phase 1), eg Finance ERP, on schedule
Used business change coaches for process and systems assimilation
In Phase 2 of transformation program including Payroll, Fleet and Asset
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9. Transformation Leader # 2 – Case History Synopsis
Cultural Transformation program components:
Major ERP implemented – Finance, Budgeting, Supply Chain, Assets, Performance
Field operatives trained by business analysts at 6.30 am on site to process work orders, raise defects, capture asset changes
Service request raised on line – workload of counter staff and service lag reduced
No hard copy incoming / outgoing mail - EDRMS workflow implemented
Property Development Applications now tracked online by owners
Mini-university in-house created for IT staff
Gradually migrating all business systems to Software as a Service
Now in Phase 2 Transformation Program
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10. Transformation Leader # 3 – Case History - Ballarat
Digital Transformation team in CEO’s office initiated projects such as:
Rationalised Telstra invoicing from 1 per site to 1 invoice covering all sites
Conducting hackathons (Lean Thinking approach) to rationalise Waste Management that:
Reduced kilometres travelled, ie 3% pa for landfill and 9% for green waste
Increased average collection loads
Obviated need for Saturday waste collection shift
Improved handling of missed bin collection
Reduced contractor spend pa
Freed capacity to grow service without increasing costs for next 2 years
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11. IT – on premises or Cloud – For Finance A Nuanced Picture
Why Cloud
Against Cloud
Transfer assets off books
Fewer IT staff
Provider takes capital risks, ie no Capex only Opex
Capacity available on demand, eg NSW Rural Fire Service
Provider keeps software current
Data sovereignty (offshore) issues
Lose control, ie now external
Hidden costs, eg billing admin.
Consumption based services billing impacting cash flow forecasting
No sunset clauses in SaaS contracts
Cost of migrating data, designing hybrid cloud and exiting is high
** Most survey respondents are ‘dipping their toe’ into the water (Cloud). Others staying on premises for now.
IBRS Local Government Finance Professionals

12. IBRS Local Government Finance Professionals
Finance Management – Take Away or Do Differently
Encourage finance professionals to rotate through IT department for cross training, eg as business analysts (#1 skill in demand)
Include Total Cost of Service (not Ownership) approach in business case for Cloud solutions
Include Finance professionals in hackathons for transformation program to sanity check opportunities, eg for Virtual Closes
Apply for funds for transformation program stating planned initiatives
IBRS Local Government Finance Professionals

13. IBRS Local Government Finance Professionals
Finance Management – do differently cont’d.
Establish Finance / IT business partnership agreement to enhance service delivery
Support IT management in their bid to increase funding above average for LGAs, ie 3.5% pa to invest in transformation
Provide helpful feedback, when apt, to IT management and staff
Conduct business benefits study from transformation program and report results, eg Ballarat
Expect staff resistance to transformation programs. Develop mitigation strategies, eg appoint change coaches
IBRS Local Government Finance Professionals

14. IBRS Local Government Finance Professionals
What does IBRS do?
Cyber security & risk
IT & business management
Enterprise networking
Economics & productivity
Outsourcing deals
Future workspaces
Design thinking
IT as a Service
Enterprise infrastructure
IT strategy & governance
IBRS is a local IT and business research advisory firm.
IBRS Local Government Finance Professionals