Wednesday, November 10, 2010

Whether to reuse or build - government choices in a connected world

There's been discussion on Twitter over the last day about whether Australian government should be building online platforms, such as a video aggregation and distribution service, URL shortcut tools (which Victoria have done) or collective infrastructure for hosting and developing all government websites.

This has been an area of on-and-off discussion for over a year in the Government 2.0 context, with several Gov 2.0 Taskforce projects exploring potential opportunities for Australian governments to build systems such as these.

I expect this to continue to be a debate for many years. Choosing whether to build a service, or tap into a commercial one, can be a tough decision - even tougher online than it is in the physical world.

Why so tough a decision?

For starters, many of the services which government could use are hosted overseas, therefore posing some level of sovereign risk - whether that be,
  • a concern over whether the service will continue to provide what Australia needs (when foreign laws and business policies may change),
  • that personal or secure data might be accessed and misused by another jurisdiction (especially all those people who only use one password), or
  • that it might provide an entry point for hackers seeking confidential and secret government information.
On the other hand, existing online services are frequently cheap and fast to implement, plus several are the 'norm' that people use around the world (such as Google, YouTube and eBay).

In many cases government created systems could have to be developed to the extent where they are commercially competitive in order to attract the level of user traffic needed to justify their continued existence.

So how to reconcile these differing perspectives... There's no single answer in my view. Decisions need to be made case by case. What makes sense for some jurisdictions won't for others and decisions that are right for one type of service won't be for another.

In lieu of an easy answer, I offer up four tests that I believe these types of reuse or build choices need to consider.
  1. Will it reduce private sector competition?
    In other words, is the government competing directly against enterprise. If so there may be job and tax implications. Generally Australian governments shy away from entering commercial markets except when private enterprise is unwilling or unable to deliver the services to the entire population at a fair price.
  2. Will government deliver a superior outcome?
    This tests whether a government-run enterprise will provide a better outcome than a private sector organisation. Strange as it may seem, governments are better at providing some services and outcomes than private industry - particularly where equity or public value is an issue. If the government can deliver a superior outcome there is a strong case for stepping in - if private sector companies miss out then they need to look at whether they should have restructured.
  3. Will it attract a significantly large and appropriate audience?
    It is very important to consider whether a government-run service will attract enough users to make it worthwhile. For example, Facebook has build its audience over a number of years, holding on to them through being so useful that people cannot abandon it without damaging their social networks. If the bulk of the audience use Facebook, would they use 'Govbook' - a government equivalent service, even if it is a superior product? The answer may not always be yes - and without audience a government service may not achieve its goals.
  4. Is it sustainable?
    In asking this I mean will a government continue to support and run the service over an extended period of time - perhaps even transitioning it to a private concern. Or is it possible that funds will be cut to a level where the service is unable to continue to innovate and improve, thereby seeing the service slip into irrelevance. Funding maintenance alone is no longer sufficient to address the rate of development online.
Of course these tests are merely suggestions. As pointed out on Twitter they are more guidelines than rules.

However I think that applying these tests will support more effective, evidence-based decisions - particularly in light of the large number of demands on government resources and time.


  1. Hi Craig,

    I would like to propose a simple answer.

    Ask the commercial providers to provide a version of their product/service that covers off/addresses the bureaucracy's concerns.

    We all know that if we get a Government agency to design, specify, procure, roll out, and perhaps even utilise a new form of technology, then it takes several years and costs ten to twenty* times - or more - than what the current private sector offerings would cost (and many of the relevant services are currently available free as we well know). Government's are the worst organisations to be doing this. The private sector are the best.

    As an example - Ask YouTube (Google) to develop and deliver an online video hosting service that covers all the concerns and (real or perceived) barriers identified - such as where the material is hosted. Or ask to provide a modified and user specific URL shortening service. Specify the OUTCOME that is required, not the technology to be used, nor methodology to get to the end product. EG This Department/Government wants a video hosting service that can do X, Y and Z. Allow the proposer to come up with the solution - I can guarantee they will and it will be far cheaper, far more effective, efficient, interoperable, and will be far more user friendly, than anything that could be specified and design within a bureacracratic system such as the APS.

    * Not quantifed - just used for effect!
    ** Need not be Google - could be any supplier of any service (and international, need not be an Australian solution that is the best fit in all circumstances.)

  2. THis comes back to a policy (almost a mantra) that I hear quoted way to often in Government (here in QLD). It's about Borrow, before Buy before Build.

    The expectation is that someone else has done it (Probably has, but the NIH (not invented here) demons come into play - I have seen government departments unaware of equivalent efforts in other states, and totally unaware of international standards that are extremely specific to their circumstances.

    In the middle of the spectrum is the "we will modify our business to comform to Generic software" - not a good idea.

    At the far end of the spectrum is the "build" you would think that this makes sense. This is government. It's not like they have competitors - they do have collaborators (other governments) but then they seem loathe to speak with them.

    Should government build Software - yes, or at least make the info etc available to the public to do so. Can the government build software. Let me first say, I am not a particular fan of Agile development - it leaves to many things to chance.I worked in the US in an OPerating Systems Development Group, and structure, processe and consistency are gods. But here I have seen government departments where a simple project, requires Program Directors, Program Managers, Project Directors, Project Managers, Enterprise Architects, Technocal Architects, Data Architects, Business Analysts, and not a Programmer in sight, because they outsourced that to Mumbai. (ANd the end product isn't working to spec...)

    The other gotcha with Government is there is ZERO learning from Mistakes. Often doomed to repeat them. It's almost as if it were politically incorrect to suggest that someone else didn't know what they were talking about, and got it wrong. (As a corollary, how my CV's have you seen for people that admit that they got something wrong, but managed to fix it. IF you trusted the resumes of the world, then everything is perfect...

  3. Hi Craig

    My understanding is the US Government has negotiated special service agreements with the likes of YouTube, Flickr and others to host US government agency content.

    See this link.

    My view is that AGIMO should be negotiating a similar agreement with the services to suit terms and conditions applicable for Australian government agencies to use these services. This is as of course where the client base already exists.

    I was amazed at how Hilary Clinton and the US State Department are use Facebook, Flickr, Twitter, You Tube and Google Maps to engage.

  4. Hi Craig,

    Great post. I guess there is a third way which is to encourage and utilise Australian commercial companies that host data here in Australia. This also addresses the issues of employment and taxes that you rightly raise.

    When we launched our online engagement, stakeholder management and collaborative document editing tools here we deliberately used an Australian hosting organisation for the reasons you outline.

    There are, of course, other commercial companies that do the same. Perhaps we need a register of Australian companies in this space who host their data here? Perhaps that could be an AGIMO initiative? (or an egovau one? ;) ).


  5. Thanks Craig, I like your tests – especially since I pass them!

    The reuse/buy/build approach is taken seriously. The Qld “mantra” @MisterQ refers to is here:
    [] (PDF). But awareness plays a big part in that equation. Reusing is great, but if you don’t know what you don’t know, participation in communities with your peers and industry is vital.

    In my experience, the use of third party technology is sometimes justified as augmenting existing approaches so as to comply with legislation and policy such as recordkeeping, security, privacy, accessibility, procurement for example. I expect such obligations make offering services that suit Government simply not financially viable. To pick up on @Robert’s point, I’ve seen international companies turn up their noses or simply ignore compliance requirements from jurisdictions as insignificant as Queensland. Perhaps an Australian Government-led initiative like the US GSA’s (thanks @pattozine) would have better leverage.

    However, my concern would be locking into a massive provider, with little capacity to influence, incurring a high cost of change, and no control over the service’s long term viability, while needing to assure the community of service continuity.

    @David, for me, provider locality is certainly a consideration. It’s always helpful to have phone support in the same time zone. Daylight saving is bad enough :-).

    Thanks for the post. As always the views expressed by me are my own and not those of my employer.