The white paper discusses the need for digital transformation in government and outlines strategies and challenges. It notes that digital channels are now the primary way people engage with organizations. Both the federal and Victorian governments have outlined "digital by default" strategies focusing on user-centered design and online services. However, implementation has been challenging due to issues like risk-averse procurement practices and lack of agility. The paper argues for a "Lego approach" using commercial off-the-shelf components and emphasizes simplicity, collaboration, leadership and technology focused on business needs. It provides the Australian Skills Quality Authority project as an example and promotes Hammond Street Developments as a partner with integration experience across government.

1. White Paper:
Delivering on Digital by Default
April 2015
White Paper:
Delivering on Digital by Default
April 2015

2. The Need for Digital Government Transformation
“The Internet is the most accessible, productive and cost efficient way for
government to deliver services to the public and for the public to engage with
government. Driven in large part by the ubiquity of smartphones and tablets, the
public expects to be able to engage with government seamlessly over the Internet.
If we are serious about promoting the benefits of innovation, government must
improve the quality and availability of its own services.”
Hon. Malcolm Turnbull MP, 29th January 2015
Digital channels are the first choice for how we engage with people and organisations.
There is no question that digital is ubiquitous, but many have noted that Australian
state, federal and local governments have been slow to implement digital
transformation initiatives.
There is now an imperative to change. Government expenditure on ICT currently
accounts for a third of all ICT spending in Australia. Two thirds of this spending is
operational providing considerable scope for savings to be realised through digital
transformational initiatives.1
Reports such as National Commission of Audit recommendations on e-Government2
encouraged government to accelerate the transition to online service delivery.
1
Supporting innovation by
transforming government service
delivery, 19 Jan 2015 http://
www.malcolmturnbull.com.au/
media/supporting-innovation-by-
transforming-government-service-
delivery
Recommendation 62: e-Government
e-Government services are often preferred by citizens, businesses and other government customers because they are more
convenient and generally cheaper and more accurate. The Commission recommends that the Government accelerate the
transition to online service delivery by:
a. setting an ambitious digital strategy that:
i. makes myGov the default means of engaging with government, supported by‘opt-out’provisions;
ii. sets concrete savings targets;
iii. removes legislative barriers; and
iv. strengthens the myGov online credential;
b. consolidating the e-Government effort through a single team under the leadership of a Chief Digital Officer; and
c. appointing a senior minister to champion the digital by default agenda.
2
Recommendations, National
Commission of Audit http://www.
ncoa.gov.au/report/phase-one/
recommendations.html
This recommendation is supported by research from overseas such as the Canadian
Auditor General’s report,3
which put the cost of an online government transaction at
0.4% of the cost of doing the same transaction in person, and just over 1% of doing
the same transaction on the telephone. Likewise, the UK Government Digital Strategy
Report4
(which the Australian Government’s Digital Strategy is heavily based on)
recommends delivering services digitally will result in annual savings of £1.7 to £1.8
Billion.
Apart from the economic rationale, citizens have significant expectations that they
should be able to engage with government agencies in the same way that they deal
with other large enterprises such as banks. It’s very clear, therefore, that back office
savings alone are insufficient when delivering digital initiatives. Investments into
large scale IT projects now need to address existing service efficiency goals whilst also
meeting the digital transformation imperative.
3
Chapter 2 - Access to Online
Services, 2013 Fall Report
of the Auditor General of
Canada http://www.oag-bvg.
gc.ca/internet/English/parl_
oag_201311_02_e_38796.html
4
Government Digital Strategy:
reports and research, UK
Government Cabinet Office
https://www.gov.uk/government/
collections/government-digital-
strategy-reports-and-research

3. Digital by Default is the Goal: The policy response
Whilst there is agreement that Digital by Default is the objective, the policy response
has differed between State and Federal levels. Policy responses need to ensure that a
lowest common denominator approach is not taken, but rather that digital initiatives
respond to a deep understanding of what citizens are demanding from government
digital platforms.
Federal: The Digital Service Standard
The Australian Government’s Interim Digital Transformation Office recently announced
the first Digital Service Standard5
for Australian Government digital services. The stan-
dard, which is currently in alpha phase, is adapted from the UK Government’s Digital by
Default Service Standard.
The standard is prescriptive and describes not just outcomes, but build methodology
and approach such as a focus on‘agile, iterative and user-centred design methods’and
the use of common or open solutions.
The Criteria
Government agencies will be expected to:
1. Understand user needs, conduct research to develop a deep knowledge of who the service users are and what that
means for digital and assisted digital service design​
2. Establish a sustainable multi-disciplinary team that can design, build, operate and iterate the service, led by an
experienced service manager​
3. Adopt a user-centred design approach​
4. Establish benchmarks to measure user satisfaction, digital take-up, completion rates and cost per transactions and
report performance publicly​
5. Evaluate what data, tools and systems will be used to build, host, operate and measure the service and how to adopt,
adapt or procure them
6. Assess what personal user data and information the service will be providing, using or storing and put in place
appropriate measures to address security risks, legal responsibilities and privacy considerations​
7. Build the service using agile, iterative and user-centred methods
8. Build the service with common look, feel, tone and function that meets the needs of users​
9. Use web service APIs, open standards and common government solutions where possible and make all new source code
open and reusable where appropriate
10.Test the service on all common browsers and devices, using dummy accounts and selecting representative samples of
users
11. Integrate the service with any non-digital interactions​
12. Put appropriate assisted digital support in place that’s aimed towards those who genuinely need it
13. Consolidate or phase out existing alternative channels where appropriate​
14. Undertake ongoing user research and usability testing to continuously inform service improvement​
15. Use data and analytics tools to collect and report performance data; informing continual service improvements​
16. Provide ongoing assurance, supported by analytics, that the service is simple and intuitive enough that users succeed
first time unaided
5
Digital Service Standard, Interim
Digital Transformation Office, Aus-
tralian Government https://www.dto.
gov.au/standard

4. Victoria:“Customer-Driven, Digital First”
The Victorian Government has been ahead of the federal government in publishing a
Digital Strategy with a‘Digital by Default’focus. Their“Customer-Driven, Digital First”
strategy6
was published in December 2013, with an ambitious target to have all State
Government agencies abiding by the plan within 18 months. 6
Victorian Government Digital
Strategy http://www.digital.vic.gov.
au/wp-content/uploads/2014/06/
Victorian-Government-Digital-Strate-
gy-December-2013.pdf
The Foundation principles
The government’s Digital Strategy is based on seven foundation
principles.The principles are of equal importance and will
underpin the management, presentation and delivery of the
government’s information and services via its digital channels.
1. Reduce customer effort
2. Engage customers through the digital channel first
3. Organise information and services by customer needs, not
agencies
4. Make content and features convenient, easy to find, use
and act upon
5. Improve productivity for customers and government
6. Interact with customers and learn from them
7. Provide an accessible and secure online experience
Digital Strategy Vision
What hampers the move to digital first?
Despite the digital imperative presented by both citizen demand and government
policy and strategy, in practice Government agencies have been either slow to respond
or have had limited success in implementing digital transformation projects that
address the factors highlighted by Federal and State Government digital strategies. In
some cases this is a symptom of ICT project issues such as those highlighted recently
by the Victorian Auditor General;7
however, it is important to note that four areas in
particular have hampered the move towards digital transformation;
Project Process
Digital projects benefit from a more agile and flexible approach which may include the
use of Agile methodologies such as scrum, but more importantly require user-centred
approaches which consider form and function, rather than function and efficiency in
isolation.
Technology Options
Often digital platforms that are suited to the defined problem or situation are not
considered due to not being in Government’s standard suite. An open-minded
consideration of products and platforms is required.
Governance
Waterfall hierarchical governance approaches don’t encourage dynamic digital activity.
Rather an‘engaged governance’approach is required where key stakeholders are
involved and committed to the process.
Procurement
Digital project success requires partnering with the‘right’companies rather than
the‘big’companies. This is due to the fact that success depends on partnering with
a vendor that is dynamic and flexible enough to work with you to achieve often
changing digital objectives. Responding to a predefined statement of work with a
fixed price will often not produce optimal results due to the discovery that occurs
during digital projects and the changing context. Organisations need to assess and
mitigate risk rather than being risk averse.
7
Digital Dashboard: Status Review
of ICT Projects and Initiatives, April
2015 http://www.audit.vic.gov.au/
publications/20150415-Digital-dash-
board/20150415-Digital-dashboard.
pdf

5. Levers to drive digital transformation
8
Want to change your culture? Start
with your projects, Colin Ellis, CIO
Magazine http://www.cio.com.au/
article/565363/want-change-your-
culture-start-your-projects/
9
Digital Dashboard: Status Review
of ICT Projects and Initiatives, April
2015 http://www.audit.vic.gov.
au/publications/20150415-Dig-
ital-dashboard/20150415-Digi-
tal-dashboard.pdf
Digital transformation requires cultural change within organisations. However, unlike
many organisational change initiatives, successful digital transformation is technology
project driven. The nature of digital projects inherits many of the challenges of enterprise-
wide ICT projects coupled with the organisational change dynamic.
Seven levers have been identified that are critical to the success of digital transformation
projects.8
These levers consider that projects to implement digital transformation by their
nature transform the organisation’s service approach (internally and externally) and their
engagement with stakeholders.
Agility
Many organisations, especially those where
technology plays a significant role, have agility as an
aim; however, the understanding of what being agile
actually means is often unclear. Whilst Agile methods
may be a key component in becoming more agile, this
is often seen as being risky for government agencies
where more traditional phase-based approaches such
as Prince2 are more prevalent. The Victorian Auditor
General9
found that just 7% of ICT projects in Victoria
utilised Agile methodologies. Hybrid methodologies
that ensure good governance whilst capitalising on the benefits of Agile methods should
be utilised to mitigate and manage risk.
Behaviours
Government agencies don’t necessarily have to adopt the approaches utilised by
corporations. Critical to any organisational change is acknowledgement that regardless
of the objective focus on systems and processes, people are involved. Ensuring that the
benefits of digital transformation are communicated to staff; that they are engaged, and
can see how they will share in the benefits will increase the likelihood of success. It is
important that staff also know what is expected of them during, and post the change
in order to mitigate any misunderstandings and therefore conjecture about the digital
transformation agenda.
Leadership
Digital transformation projects need engaged champions in order to succeed. This
includes exemplifying leadership within and external to the organisation. A culture of
pride coupled with an empowered project team enables the inevitable obstacles that
arise to be overcome. Transparency is also important - Firstly, in order to enable the wider
organisation to be part of the journey to digital transformation; and secondly to show
the community and corporate Australia a better way to engage with stakeholders whilst
demonstrating the benefits of digital initiatives.
Innovation
Government digital strategies explicitly state innovation as an aim. This is a reflection on
the need to improve on the past performance of government ICT projects. Innovation
within the government sector does not mean disregarding the past - rather the learnings
of the past 20 years of delivering ICT projects for Government should be applied to new
technologies and approaches. By giving due respect to the past, projects can benefit from
past experience and deliver improvements that consider previous failings and successes.
Collaboration
Digital projects require elevated levels of collaboration especially with vendors. The
focus on a shared outcome requires the sometimes adversarial relationship between
client and vendor be put aside. Procurement models need to be reviewed to ensure
that collaborative rather than servant/master relationships exist between vendors and
agencies.

6. Simplicity Technology
The final two levers are the most important when implementing digital transformation projects: Simplicity and
Technology. These factors are the most important as they are the factors that differentiate digital transformation
projects from other ICT or organisational change projects.
Simplicity
Digital projects succeed when they are simple. Simple in terms of reduced or managed technical complexity and
simple where the business rules and processes are simplified.
Organisations should take a‘Lego approach’: Utilise pre-built components and assemble them together. Rather than
making investments in customising components, re-engineer business processes to maximise the value of digital
investments. Also, organisations should partner with organisations with recognised skills in application integration.
The integration of systems allows significant value to be extracted from existing systems especially in terms of process
efficiency and business intelligence, with data quality and auto-completion of forms a benefit for end-users.
Technology
Whilst obviously critical to digital projects, it is important to see technology as a response to a business problem. Too
often projects are initiated for which the objective is the implementation of a technology product or system.
The selection of technology serves the other six levers already discussed.
Organisations should continue the prevailing trend of selecting Commercial-off-the-shelf components and plug
them together‘lego style’to achieve the required outcomes. This approach stresses the importance of application
integration and enables a more rapid, less costly project with reduced risk.
The‘Lego Approach’in Action
The‘Lego Approach’ has been utilised by a number
of state and federal government agencies to architect
their enterprise systems to meet the digital imperative.
The Australian Skills Quality Authority (ASQA) recently
commenced an enterprise-wide project to establish
new core systems to support their role as the national
regulator for Vocational Education and Training. (VET)
The project has a wide range of often disparate
objectives but utilises a range of projects including:
• Microsoft Dynamics CRM - Core business
application
• Intelledox Infiniti - Smart forms platform
• Microsoft Server - Web Application Server
• Microsoft SQL Server - Database Server
• Microsoft Dynamics NAV - Chart of Accounts
• Objective EDRMS - Document Management
• Web services
ASQA is meeting the digital transformation challenge
by engaging a vendor with experience and expertise in
application integration. ASQA’s objective is to establish
systems that can meet the digital imperative while
being positioned to meet future business requirements
and user expectations.

7. Partnering for Success
HSD: People, Process and Technology
Project success depends on a variety of factors, some of which have been introduced in this paper. Utilisation of the
‘Lego approach’as discussed enables the flexibility and agility required for successful digital transformation projects
whilst mitigating many of the risks associated with ICT projects.
Selection of a vendor to partner with is critical. Ensure that the vendor/s you choose have the following:
• Has a range of Commercial Off The Shelf product knowledge and experience
• Has significant and recognised application integration experience
• Is the‘right size’to partner with your organisation
• Has a project management approach suited to digital transformation projects
• Can support your strategy rather than just being an implementer
• Has cloud, on-premise and hybrid infrastructure, application and integration expertise
Making a considered vendor choice will give your project the best opportunity for success.
HSD provides systems development, integration, implementation and support services to a wide range of govern-
ment, enterprise and not-for profit customers across Australia.
HSD also provide specialist software engineering services for complex requirements including lawful interception and
transaction processing systems.
All developments can be hosted and supported by our Managed Systems team enabling HSD to deliver systems that
are managed through the complete system and software lifecycle.
As a Microsoft Gold Application Integration partner, we have been recognised for our expertise in utilising the‘Lego
approach’to integrate industry-leading commercial software platforms from vendors such as Microsoft and Intelledox
to deliver systems for a range of Australian state and federal government departments.
HSD utilise a range of processes including PASS, our hybrid project management methodology based on PRINCE2,
Agile and Microsoft Sure Step approaches.
HSD is a trusted partner supporting the digital transformation objectives of many organisations.
Whole of Government
Cloud Services Panel
HSD is a member of the
whole-of-government panel
for the provision of cloud and
SaaS services to Australian
Government agencies.
Panel membership recognises
HSD’s experience and
capabilities in the following
specialist services:
• Microsoft Dynamics
CRM configuration and
integration
• Cloud based Smart Forms
• Cloud Reporting System

8. Hammond Street Developments
Level 1, 296 Whitehorse Road
Nunawading VIC 3131
Phone: 03 9875 5900
www.hsd.com.au