FMAA s44, now PGPA s 15, 'proper use':

The Financial Management and Accountability Act (FMAA) was replaced by the Public Governance, Performance and Accountability Act  (PGPA)

Department of Finance administers the Act.

Resource Management glossary - proper use

Efficient, effective, economical and ethical use or management of public resources.

For the accountable authority of a non-corporate Commonwealth entity, proper use and management of public resources means behaving, taking action and making decisions in a way that is not inconsistent with the policies of the Australian Government in accordance with sections 15 and 21 of the PGPA Act.

Related glossary terms

economical

effective

efficient

ethical

Related PGPA Act provisions

8. The Dictionary

Section 15. Duty to govern the Commonwealth entity

Section 21. Non-corporate Commonwealth entities (application of government policy)

Last updated: 13 January 2016

Now Read This: Why the Munich Open Source Conversion won't be replicated in Australia.

Whichever side of the Open Source vs Proprietary Software debate you lie on, this article is a "must read". The headline take-away is: "Our goal was 'Freedom', to become independent."

How Munich rejected Steve Ballmer and kicked Microsoft out of the city, Steve Heath, 18th Nov, 2013.

National Security: Prevention and Strengthening Defences missing from Gillard Strategy

The Gillard government has released a new National Security strategy specifically including Cyber-Security. It updates a 2009 strategy released by the Rudd government:

Strong and Secure: A Strategy for Australia's National Security

The strategy is strong, competent and wrong...
Because what is outlined is incomplete:

They have failed to address the root cause of cyber-attacks: vulnerable and error-filled Operating Systems and poor Application Software. Fix the weakness, stop the compromises before they happen, spend the money on where it can do good, not support "Business As Usual".

Cleaning up the mess and containing damage after the fact is exactly wrong: it's attempting to catch the horse after its has bolted.

NBN: Coalition support for Free Markets vs Monopolies

Mr Turnbull wrote a recent commentary on a speech by the Chairman of NBN Co, entitled "Policy Choices in Project NBN".

[Long. 2850 words total, 2000 words of mine]

I made this comment on his blog:

Malcolm,
You keep on top of the debate and are continually moving it forward. Excellent work as both a Shadow Minister and prospective Minister.

I’m impressed with your criticisms of the NBN Co rollout. Informed and useful.

Here is not the place to nitpick the Coalition policy. You have one, have made promises that can be evaluated and have publicly committed to continuing a National Broadband Network.

Thanks for being so active in this debate and not allowing the incumbents to be complacent or go unchallenged. Well done.

regards
steve jenkin

Here are my criticisms of his blogpost.

The NBN as an Essential Strategic Defence for Cyber-warfare.

Whilst reading this piece today I 'had a thought'.

"Militarisation of cyberspace: how the global power struggle moved

online",  Nick Hopkins, guardian.co.uk, Monday 16 April 2012 15.00 BST

One argument in support of the NBN I've not heard is about Security, but not the "how to keep your bank account and credit card safe" kind - the usual direct theft or Identity Fraud talked about at Cyber-Security conferences.

The National Security kind that interest the Intelligence agencies and Military, a.k.a. "Cyber-warfare".

This is as far removed from normal Cyber-security as guarding bank vaults is from fighting a war. Attack, and hence Defence, is taken to a whole new level: because the resources employed and what is at stake is taken to a whole new level.

Business Metrics and "I.T. Event Horizons"

Is there any reason the "Public Service", as we call paid Government Administration in Australia, isn't the benchmark for good Management and Governance??

Summary: This piece proposes 5 simple metrics that reflect, but are not in themselves pay or performance measures for, management effectiveness and competence:

• Meeting efficiency and effectiveness,
• Time Planning/Use and Task Prioritisation,
• Typing Speed,
• Tool/I.T. Competence: speed and skill in basic PC, Office Tools and Internet tools and tasks, and
• E-mail use (sent, read, completed, in-progress, pending, never resolved, personal, social, other).

---

ICT Productivity and the Failure of Australian Management

Prior Related Posts:
Quantifying the Business Benefits of I.T. Operations
The Triple Whammy - the true cost of I.T. Waste
Force Multipliers - Tools as Physical and Cognitive Amplifiers
I.T. in context

Alan Kohler and Robert Gottleibsen have been writing in "Business Spectator" about the relationship between jobs and Economic Productivity.

They note that the USA has improved productivity in the last year while in Australia it has declined (+4% and -3% respectively).  My take on this is: a gross Failure of Australian Management.

There is solid research/evidence that "ICT" is the single largest contributor to both partial and multi-factor Productivity, and is expected to be so for the next 20 years.  This is an big issue.

Why Yet Another ReOrganisation won't improve the Public Service

The Rt. Hon. Ken Rudd PM has suggested on the News that he'll be seeking to improve the Federal Public Service. There's talk of a special Centre at the ANU to train people up too.

Rudd might end up with a bunch of tests, metrics and new programs & processes, but I can guarantee it won't amount to a hill 'o beans. The one thing known about Bureaucracies is their ability to Resit Change.

Read C. N. Parkinson ("Parkinsons Law" etc) for a view from the 1950's and some definitive economic analysis of the ultimate Bureaucracy: The UK's Ministry of Defence. After WWI, ships and fighting men - the essence of the Navy - declined dramatically. The Bureaucracy 'running' them increased overwhelmingly...

Why? Because the primary purpose of Bureaucracies is themselves, not producing outcomes.

Finance, FMAA & ANAO and Good Management: Never any excuse for repeating known errors

In light of the Sir Peter Gershon's Review of the Australian Government’s use of Information and Communication Technology, here's an email I sent to Lindsay Tanner (Finance Minister) prior to the 24-Nov-07 election of the Rudd ALP government. Edited lightly, formatting only.

---

Date: Sun, 11 Nov 2007 15:02:40 +1100
From: steve jenkin 
To:  lindsay.tanner.mp@aph.gov.au
Subject: Finance, FMAA & ANAO - Good Management: Never any excuse for repeating known errors

Here is something very powerful, but simple to implement & run, to amplify your proposed review of government operations and can be used to gain a real advantage over the conservative parties. On 8-Nov I wrote a version via the ALP website.

---

Headline:

The Libs talk about being Good Managers, but they have been asleep at the wheel for the last 10+ years.

It's not "efficient, effective or ethical" to allow public money to be wasted by repeating known mistakes.

Nothing new needs to be enacted - only the political will to demand Good Governance from bureaucrats and the 'ticker' to follow through.

---

Quantifying the Business Benefits of I.T. Operations

Objectives (The What)

That "I.T. is done for a Business Benefit" seems axiomatic.

But where's the evidence after 50-60 years of computing? It's not coming out our ears - just the reverse.

Businesses understand the importance of hard data and it's through analysis for marketing, but don't apply the same techniques or management principles to their I.T. Operations.

I'd like to model and quantify the Business Benefits of I.T. Operations across multiple organisations to provide baselines, benchmarks and trend analysis. The impact of all aspects of I.T. is beyond the scope of a single researcher project.

Approach (The How)

Data is fundamental input for analyses. Leveraging what's available means the outputs can be commercially reproduced and aer within the project budget (zero cost).

Three separate data streams will be mined:

• Historic "ITSM" tool data from multiple organisations.
• Detailed I.T. accounting information from selected organisations.
• Primary research in one organisation to collect and report "FTE equivalents provided" by I.T.

[FTE = Full Time Employee. Otherwise, "virtual employees". What head count and cost would be needed to provide similar services with 1965 technology.]

Importance/Value (The Why)

There propositions are to be tested:

• I.T. is done for a Business Benefit.
• Business Benefits, tangible or intangible, should be measurable.
• Organisations these days are dependent on their I.T. Operations.
• I.T. cuts acros all segments of current organisations.
• I.T. defines the business processes and hence productivity of the whole organisation.
• What you don't measure you can't manage and improvve.
• Improving the effectiveness of I.T. Operations requires reliable metrics.
• Commin I.T. Reporting Standards, like the Accounting Standards, are necessary to contrast and compare the efficiency and effectiveness of I.T. Operations across different organisations or different units within a single organisation.

I.T. is a cognitive amplifier, it delivers "cheaper, better, faster, more, all-the-same", through the embedding of finely detailed business processes into electronic (computing) systems.

For simple, repetitive cognitive tasks, computers are 1-5,000 times cheaper than people in western countries.

From this ampflication effect, computers still provide the greatest single point of leverage for organisations. The underpin the requirement to "do more with the same", improving productivity and increasing profitability.

Subtle shifts in this whole-organisation amplification ratio (e.g. from 100:1 to 95:1 or 105:1) are impossible for isolated individuals to detect unaided. But they make very large differences to the 'global' organisation output and productivity.

In retail businesse, the gross margin is often around 2.5%. Reducing whole company productivity by 5% will destroy it's profitability, and without any metrics, will be impossible for any management team to identify and resolve.

The few studies of "IT Efficiency" that are available show that IT effectiveness is highly variable and unrelated to expenditure.
My proposition is that "intuitive management" of IT is stretched well beyond it's useful limits and needs to be replaced by evidence-based management.

The value-add to business is two-fold:

• manage downt he input costs of the I.t. infrastructure and,
• quantify the "cognitive amplifier" effects across the whole organisation to make informed decisions on optimum 'global' investment/expenditure on I.T. Operations.

[There's the 1990 HBS or MIT study into "White Collar Productivity" - reporting a decrease in the first decade of PC's]

Previous Work (What else)

There is a dearth of published material/research in this area.
The "State-of-Practice" is "NEVER DONE".
There is much opnion in the area, without substantive evidence: e.g. Nick Carr and "Does IT Matter?"

"Commonsense" IT Practitioner approaches, ITIL and COBIT (others?), do not address the measuring and managing of I.T. outputs and their business effects, ultilisation and effectiveness.

The McKinsey report/book on European Manufacturers and their I.T. expenditure versus financial performance shows there is no co-relation between effort (expenditure) and effect (financial peformance).

Jerrry Landsbaum's 1992 work included examples of their regular business reports - quantifiable and repeatable metrics of I.T. Operations phrased in business terms. This work seems entirely disregarded.

Hope to find (The Wherefore)

• Model I.T. Operations performance within and across similar organisations.
• generate tools usable within organisations to collect/report their own metrics.
• Define a set of useful I.T. Operations performance and Business Impact metrics.
• Model inputs to Business and Business Utilisation/Outcomes.

Report Outline

• Analyse ITSM tool data. Derive KPI's, Internal Baselines/Trends, Cross-section Benchmarks
• Annual I.T. Operations Report
• FTE Employee equivalents - Count and Cost
• Why IT Matters to the Business.
• Gaps in Service Management models - ITIL and COBIT
• Adding I.T. Operations to Management Theories.
• Advancing I.T. as a Profession
• Further Work and Research Questions

Execution Phases

Force Multipliers - Tools as Physical and Cognitive Amplifiers

The industrial revolution was about using Tools as Physical Amplifiers.

Prior to the steam engine, the oxen/bullock/horse/donkey/elephant was the dominat non-human power-source.

Humans can work at about 125-250W continuously (1/8 to 1/4 of a kilowatt, or 1/6 to 1/3 Horsepower). Elite athletes can produce 500W or more for short periods.

All biological systems have a short and medium term "duty-cycle" - our muscles get tired, non-linearly, and need short-term recovery and longer-term rest and recuperation. Sleep and recreation are about the nervous system/mind/brain.

From chapters of Taylor's book Scientific Management here's proof you get more out of people by making them rest! He improved average output from 12 tons/day to 47 tons/day through careful (psychological) selection and enforcing rest periods. Counter-intuitive, but well-researched.

For example, when pig iron is being handled (each pig weighing 92 pounds), a first-class workman can only be under load 43 per cent of the day.
He must be entirely free from load during 57 per cent of the day.
And as the load becomes lighter, the percentage of the day under which the man can remain under load increases.
So that, if the workman is handling a half-pig, weighing 46 pounds, he can then be under load 58 per cent of the day, and only has to rest during 42 per cent.
As the weight grows lighter the man can remain under load during a larger and larger percentage of the day, until finally a load is reached which he can carry in his hands all day long without being tired out.

For an 8-hour day at 125W, a total of 1KwHr (kilowatt hour) useful work is done, ignoring rest breaks.
Animals are heat engines as well. We 'burn' fuel with oxygen, releasing Carbon Dioxide and some useful work. For that 8-hour day, the energy input is probably 10,000KJ (kilo joules) [or 2500 (kilo)'calories']

Electricity sells for ~20c/KwHr in the western world. The minimum wage in Australia is ~$100/day now.
The raw "Physical Amplification" on a cost basis is ~500:1

A 500 HP bulldozer is controlled by one operator. There's a 3000:1 amplification. But machines are under 50% effective at converting their output to 'work done' compared to people.
On a cost-basis, the bulldozer might costs $150/hour to operate (40-50L of fuel, Wages, Maintenance, Depreciation).
Or 10c/hour/person-equivalent. Probably 400:1 ratio based on the operator wages.

Cognitive Amplifiers

The same comparison calculations as with Physical Tools and Machines can be done for humans and computers.

The human brain runs at ~50 watts - with around a 4MJ total energy input (1000 'calories') per day.
Like muscles, it has a "duty cycle' and requires rest and recuperation, as well as sleep and longer-term "recreation" and holidays. There appear to be no studies of "Human Response to Cognitive Workload". [Looking for the wrong thing?]

Directly comparing the human brain's I/O bandwidth, processing and storage capacity with electronic computers is difficult because they are organised so differently and probably complementary. The are best at different tasks.

45 years of "Aritifical Intelligence" research tells us that we don't understand in fine detail our brain processes and capabilities or the fully appreciate the complexity of "ordinary tasks". To recognise, not understand, human speech takes around a 1.5Ghz CPU and 256Mb of RAM - plus a very large, complex training dataset. Recognising speech, without understanding it is the equivalent of talking gibberish.

For repetitive cognitive processes that humans do poorly - computers with their methodical exactness, excel.

A $5,000 computer system that costs $10,000 over a 5-year life (excluding software) can run an accounting systems that processes 25,000 transactions/hour and is able to store, summarise and report on perhaps a decades' worth of data.

The equivalent human processing using mechanical 'tabulators', themselve 5-10 times faster than pen-and-journal, would take 250 operators just for data-entry. Consolidating and reporting the accounts requires another largish group (25?).

The yearly wages bill for the operators would be ~$4M. On-costs, leave, recruitment and training - say $25M for 5 years.
A 2500:1 amplification on a cost basis.

Cognitive Amplifiers

I.T. Systems benefits are "cheaper, better, faster, more, all-the-same".

I.T. systems embed the business processes used and their interfaces, performance and reliability define the productivity possible across the whole organisation.

The Triple Whammy - the true cost of I.T. Waste

Background

There's a report around at the moment that says spending on I.T. is 3-4 times more effective than anything else. [Link to come]

In the first couple of decades of commercial computing, all the "low hanging fruit" - the best returns - for I.T. were exploited. That's when 'the books', financial information and large internal databases (assets, employees, stockholders, vendors, customers, ...) were computerised.

1991 - the first IT recession - marked the end of this era. For the first time, IT staff were laid off in an economic downturn. Previously other staff could be displaced by automating their jobs with I.T.

The 2000 I.T. recession - which we are only just starting to recover from - was industry backlash (and rightfully so) to "Y2K" and the "Dotcom Bust"). The general I.T. justification before then was: "We need this, trust us". After 2000, business needed to be convinced...

Controlling Waste in Government I.T. - An Immodest Proposal

The Standish Group has researched and released the CHAOS report since 1994. What's special about Yet Another Expensive Industry Report?

The fact that nobody else does it, they have 50,000 detailed case studies of I.T. projects, and their results are consistent year to year (but they would make it that way, wouldn't they?).

Do we believe their claims the US spends $250Bn/year on IT applications development? That $81Bn of that is on cancelled projects and anothe $59Bn on over-runs? Or that only 16.2% of projects finish on time and within 130% of budget? That "For every 100 projects that start, there are 94 restarts"?

To scale that back to Australia, about one fifteenth the size, there'd be A$21Bn/year on just applications development. Which doesn't gel with estimates from the ABS that the I.T. sector here is about A$20Bn in total. (The ABS only reports accurately the ICT sector - grossly inflated by 'Communications' i.e. phone et al.) If the Australian I.T. sector is 5% of GDP, it would be around $50Bn and employ 500,000 people. Not unbelievable.

Either the US does a lot more AppDev that us, they pay a lot more, the survey is wrong - or the ABS survery figures are out.
To cut through the questions, all that's needed is a 'scale factor' - to convert the numbers from Standish into believable figures for Australia. Taking the ABS survey figure as a lower bound and guessing that half I.T. budgets go on AppsDev, or $10Bn, then that's a scale factor of 25:1.

So the Waste in Australia on cancelled AppDev projects is at least $3.25Bn/yr. The ABS also state that 40% of I.T. expenditure is by Government - half by the Federal Govt. The Government is wasting $1.5Bn - $3Bn of public monies yearly.

The only reliable figure for 'waste' is cancelled projects. Standish do say 52.7% of projects will cost 189% of their original estimates. But that could just be deliberate low estimates, optimisum or ineptitude of the IT areas - which after 50+ years of commercial I.T. you'd have thought management might have recognised and addressed.

It's over 10 years since Standish started their CHAOS reports - so why hasn't any section of the Australian Government looked at the problem here? Some possibilities:

• There is no problem here. [Nope, glorious failures like ADCNET abound]


• We don't have figures, so nothing could be wrong.


• It's too trivial a figure


• Nobody here knows the Standish work. [That's either negligence or incompetence.]


• It's nobody's job? How about:
  
  
  • Australian Audit Office?
  
  
  • Senate Estimates Committee and Expenditure Review Board?
  
  
  • AGIMO, NOIE, GOI, ...
  
  
  • FMA Act & Finance - "Efficient, Effective, Ethical expenditure of public monies"
  
  
  • Department Heads [see FMAA]
  
  
  • I.T. Heads

There is a tried, proven model for controlling 'waste' - and the government knows it well:
Aviation.

Two independent bodies are needed: An investigator and an enforcement/compliance agency.
In Aviation, they are "BASI (Bureau of Air Safety Investigation)" and "CASA (Civil Aviation Safety Authority)".
CASA creates real 'consequences' for people and organisations - negligence and incompetence are cause for temporary or permanent disbarment from the industry.

BASI looks to find the causes of 'incidents', how to avoid them in future and promulgates the information to everyone that should know.

For about $30M/year, roughly the budget of the ANAO, the Federal Government could start to define and address the problem of I.T. waste. This is an area where the Government can lead the Private Sector - the same companies and people contract for the public and private sector. The Government can be seen to be impartial and transparent, and their is no legal impediment for a government "right to practice" list.

Spending $30M to save $3,250M - that sound like a good deal to me. Why not to the Government?