Every debt, eventually, has to be repaid.
Right now, the day of reckoning is fast approach for one of the most crippling – but least discussed – debts burdening government across Australia – technical debt.
Technical debt is the cost and burden of the accumulation of investments in outdated and inadequate technology infrastructure and systems.
Often, these investments are made because they seem like the fastest solution to getting a new function or service in place. Other times they are driven by the sheer weight of sunk investment.
This sunk investment is not just in actual systems. It is also the impact of the number of people, advisers, embedded technology partnerships and ongoing operating costs associated with the established ways of doing things.
As the debt grows larger and larger, it is becoming harder and harder to retire.
Old disparate systems are delivering mission critical services across Australia. From securing borders to managing payment and revenue systems, these cannot only not be turned off, but they require constant and growing maintenance.
Technology debt is not only creating a financial deficit but discouraging decision makers from embracing the new. The risk of failure is so great, that sticking to what they know seems to be the only safe option.
Years of budgetary pressures have driven departments and government agencies to double down on investing more in systems they first bought a generation ago. This is compounded by the lucrative deals consulting firms and system implementers have signed, which sees them bill hourly to patch up these old systems. They are effectively incentivised to keep them going for as long as they can.
The Australian Government, understandably, is demanding departments and agencies prioritise spending on programs to reduce the burden on citizens during economically tough times, not on running themselves.
But more and more of scarce internal IT budgets are being consumed keeping old systems supporting critical services from falling over, making it impossible to pay for new systems to replace them.
Apart from the rising risk of failure, the financial burden of servicing government technical debt is reaching a point where policy makers may be left with little choice.
This debt is becoming increasingly costly to the budget at a time when fiscal discipline is demanded by the twin crises of inflation and cost of living.
The first step is to reduce both the cost and the risk of transitioning to new systems. That sits in large part with the technology industry.
On the demand side, ministers and agency heads need to step in and push the industry to embrace innovation, while also questioning how they can reduce their own internal change management costs and simple resistance to change.
As the Productivity Commission found in its major review of national productivity, the cost of retraining staff to adopt new processes – even those that increase efficiency – are barriers to change.
Again, though, assessments of these costs may be inflated if they are based on history. Newer business applications are learning from online consumer services by becoming more intuitive and embedding training and self-help. Providing training and professional development opportunities enables government employees to embrace new technologies, drive innovation and effectively manage technical debt.
By taking decisive action to tackle technical debt head-on, the government can leverage technology to enhance efficiency, foster innovation and improve citizen-centric service delivery, positioning Australian government as a leader in the digital era.