ICT Cost Planning for Queensland State Government Agency
Does your team have the right data to manage cost?
GLG Consulting has helped the ICT division of the Public Safety Business Agency improve value for money for Queensland Police, Fire and Ambulance services.
The Client Situation
The Queensland State Government is a massive consumer of ICT services ranging from telecommunications through to the maintenance of large custom designed software solutions for critical services like police ambulance and fire services. After a series of funding restructures, new services and growth in demand, it was becoming increasingly difficult for our client to plan and manage cost.
How We Became Involved
GLG Consulting formed an initial relationship with this client in 2015, working with over 60 managers in the business to develop a 12 month action plan designed to focus on providing staff with the right tools to continue improving frontline services. Through this process it was identified that more work was required to properly understand recurrent cost commitments, and we were asked to help improve the team’s understanding of costs.
The large number of multi-year service and software maintenance contracts and accounting treatments for these were creating great confusion for cost centre managers. A complex mix of prepayments, monthly accruals and a sub-optimal cost centre structure were making it extremely hard to properly ascertain how money was being spent. We approached the problem in four steps:
1. Analyse cost history and which costs represented ongoing commitments
2. Address any systemic issues that prevented visibility of costs
3. Design and build monthly cost manager reports
4. Work with cost centre managers to improve their understanding and ability to manage cost
Our team worked directly with over 100,000 underlying transactions from the client’s financial systems to create a comprehensive understanding of recurring and one off cost commitments. We then classified costs into 600 material and significant cost categories that made sense to both cost centre managers and the government agencies providing funding.
Once we had established this baseline understanding,we were able to recommend some simple cost centre structure changes that would improve clarity of manager responsibilities. we also recommended consistent rules for handling multi-year prepayments and cost recoveries, and performed some additional work to apportion costs to services and customers to better support funding requests.
These changes then enabled the development of a bottom-up forward cost plan and monthly variance reporting for each major cost centre manager.
F&DS team now how full visibility of all business as usual cost commitments and the ability to created a forward plan reaching out multiple years into the future.
The reports developed by GLG consulting are now used for the development of both forecast and budget information, and every cost centre manager is now better equipped to actively manage their costs within budget. Improved visibility of cost has identified multiple cost savings opportunities, and our client has identified over $3 million of cost savings.
The forward plan also provides the vendor contact management unit with improved visibility of contract renewal timelines, allowing them to better prepare for contract renegotiations.