Driving government digital transformation through smarter procurement and product-based approaches

David Heacock, Spokesperson and Coordinator, Australian Digital Delivery Alliance, highlights the critical need for smarter procurement practices and a shift to a product-based funding approach to fix long-standing issues in government IT spending at CIO Edge.

David explains that traditional procurement models—dominated by large vendors—often lead to massive cost blowouts.  

Government projects, initially budgeted at $50 million, can easily blow out to hundreds of millions due to inefficiencies in vendor contracts and a lack of accountability.  

David advocates for a more level playing field that allows smaller consultancies to deliver targeted work, creating flexibility and bringing down costs. 

A key issue in government spending, according to David, is the reliance on waterfall funding models that focus on short-term projects with clear beginnings and ends.  

He suggests moving towards a product-based approach, like major companies like Telstra, which focuses on long-term value and continuous improvement.  

This would not only help control costs but also improve the overall quality of government services for citizens. 

Despite the challenges, David remains optimistic that, with steady leadership and policy change, governments can make real progress in digital transformation. 

Key Takeaways: 

• Smarter Procurement: David pushes for reform in government procurement, shifting away from large vendors to smaller consultancies for more targeted project delivery. 
• Product-Based Approach: David suggests adopting a product-based funding model, prioritising long-term value and continuous improvement over short-term projects. This could lead to better service outcomes for citizens. 
• Leadership and Accountability: The success of these changes relies on strong leadership from both government and industry. David emphasises the importance of ongoing executive support to keep product-based teams moving forward and prevent setbacks.