Ownership Interests

Ownership Issues

69 Shared workspace involves a common software application to be used by all government agencies. This will not require a common technology platform across government, but will pose challenges with respect to interoperability that will have to be overcome if all departments are to be able to access and use the application. The use of a common government application for carrying out core business functions raises some serious questions about the ownership and management of government technology assets. These include how decisions will be made with respect to deployment and technical interoperability; who will fund the application; how it will be managed and upgraded; and who will take responsibility for evaluating its relevance, and ongoing applicability as a technology resource.

Governance / administration

70 The SSC and Treasury are considering the impact of e-government initiatives on public sector management, and this work will flow on to the governance and funding arrangements of a wide range of e-government projects. [Appendix 2: Links to other e-government projects] One of the central themes coming through from work on authentication, metadata, S.E.E. Mail, e-procurement and directory projects is that governance and funding arrangements need to be sorted out as quickly as possible if the Government vision for e-government is to become a reality.

71 For the shared workspace initiative, governance is concerned with:

• rules of membership including operational protocols, dispute resolution, and disciplinary action

• management of infrastructure interoperability across government

• funding

• supply contracts and licensing

• process and information policy re-engineering

• consideration of proposals to extend or use the system outside its planned scope

• marketing

• commissioning evaluation and examining ongoing applicability as a Government technology resource

• impact on other systems and applications.

72 The interoperability project is explicitly addressing the need for a single governance arrangement that will have the ability to make decisions on a range of e-government initiatives. It is therefore not appropriate for the Project Team to make explicit recommendations for a separate governance arrangement for the shared workspace initiative at this time.

73 It is worth noting however, that a clear governance structure is imperative to the successful implementation of a shared workspace application. If the project is to go to the implementation phase, it may be necessary to implement a temporary arrangement (in the interim the steering group overseeing the Secure Electronic Environment) to manage the initiative until a formal arrangement for the e-government programme is agreed. This will avoid unnecessary delays.

NOTE: Governance arrangements for e-government initiatives are currently under consideration by the E-Government Unit. To progress the shared workspace project it may be necessary to establish a temporary governance structure to resolve and manage issues of shared IT resources across government. The S.E.E. Steering Group should act in this role until a permanent governance structure is in place.

Funding

74 To implement a shared workspace application, some centralised resources will be required. While it is anticipated that funds already voted to the E-Government Unit will seed the initial 'start up' capital cost of modular application development, there will be other costs. These include those associated with implementation; the storage of project data; possibly a helpdesk service; and information management specialists as well as the ongoing development of the shared workspace technology applications and rollout. These central resources could either be owned by government, or purchased as a service from a service provider but how they are funded becomes a central issue to resolve.

75 The Project Team was not required to undertake any analysis of potential development costs. It did however, consider some high-level funding options ranging from central funding through to split funding of development costs. These are briefly discussed below:

Centralised funding of shared workspace development costs (e.g. the current NZGO model)

76 Centralised funding, either through a group of lead agencies or the Central Agencies, may be a useful approach at key points in the life cycle of the project. For example, initial technological specification and design, and/or pilot costs may benefit from the relative uncomplicated nature of central funding. At a later stage, software upgrade costs could also be centrally funded to encourage agencies to keep up with new versions. This option may be particularly viable if the cost of development is relatively low.

77 In addition, centralised funding is likely to have the advantage of encouraging voluntary uptake across government. Chief executives are likely to respond positively if application development, testing, maintenance and upgrade costs do not require a re-prioritisation of departmental budgets. Agencies would need to support the initiative by bearing the cost of licences, staff training, and the provision of technical support for operating the application in-house.

Club funding (e.g. the Management Development Centre model)

78 The history of club funding has been variable across government to date. The experience of the E-Government Unit is that often transaction costs are high, administration is difficult, and significant operational pressures can result. Club funding is most likely to be effective where the benefits directly accrue to the agencies involved, and non-participation excludes an agency from these benefits. NZGO for example, has been switched to a centralised funding model from club funding, in order to manage its growth effectively.

79 This option could however, be more appropriate to an initiative like shared workspace that will involve a significant change to the way policy staff do business across government. It may offer chief executives more control into the product and its development (e.g. Management Development Centre). There would need to be some form of administrative arrangement to ensure contribution, and procurement, are managed efficiently.

Pro-rata billing

80 A billing arrangement based on agency usage levels implies the need for close monitoring (most likely through additional electronic functionality), and an administrative body to manage the billing system. This is likely to be a high transaction cost option and difficult to administer. It may be more appropriate if the shared workspace application is owned and managed by an independent service provider or if the clear definition of the transactions add value. It is possible however, that the transaction costs may discourage private sector investment. Equally, government may lose control of the ability to restrict the transaction cost ceiling, and the application could increase in costs to run, over time.

Split funding of development costs

81 In this option each agency, or the service provider, bears a proportion of the capital costs of the application, and charges are on a per-user basis. Some form of split funding is implicit in all of the funding options.

82 The differentiation between the options is how the division of funding responsibilities is made, i.e. which proportion of the costs are borne by agencies, and what administrative arrangements are necessary for efficient funding management.

83 The division of funding responsibilities needs to ensure the application is protected from displacement by other agency priorities that may lead to a lack of uniformity of operation across government. This split funding option is likely to be so administratively complex that it would not be feasible to run efficiently.

Summary of funding options

84 It will be necessary in any follow-up phase to the project's work to develop a business case that will explore both the costs and benefits of an electronic shared workspace for crosscutting policy development. It is anticipated that the business case would also examine further options associated with funding the initiative including the potential for specifically seeking new money for ongoing development and implementation.

85 The business case will distinguish between funding for the development phase, which is likely to be different from funding an ongoing operation. While development is likely to be funded centrally, the business case will need to recommend whether ongoing costs will be covered centrally, or recovered from users.

86 Appendix 3 sets out a summary of the funding options.

Operation of a shared IT resource

87 If a shared workspace application is to be developed for government, a user needs and technical specification phase will have to take place, followed by a design and build. Before the application is implemented there are a set of ownership issues that need to be considered relating to the requirements for ongoing technical operation and support. This includes how the application is maintained and upgraded (refer 'Technical implementation' ).

88 These issues are dependent on the design and composition of the application. It is difficult to anticipate what arrangements might be necessary. Ongoing operation of the application needs to be specified in the business case.

NOTE: There is a range of potential funding models. The feasibility of those least challenging to current funding models may depend on the nature of the solution put forward, and therefore should be reconsidered at a future time.

The Project Team is of the view that in principle:

• a central group should bear the cost of shared workspace development;

• referential agencies should bear the cost of the development of component parts of the information portal (e.g. SSC - MOG manual; Treasury - estimates; PCO - legislation);

• individual agencies should bear internal operational costs including licenses, staff training, and internal technical support;

• ongoing costs will either be covered centrally, or recovered from users.

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