September 24, 2025 • 38 mins
The way the New Zealand government buys technology is about to change in a big way.
A Cabinet paper from Judith Collins, the minister for digitising government, has outlined and approved a plan to centralise IT and digital-related government procurement decisions within the Department of Internal Affairs.
Facing up to $13 billion in planned technology spending, with only two-thirds of it funded, the DIA team knew something had to change.
“The underlying issue is fragmentation,” explained Paul James, the Government Chief Digital Officer and key architect of the procurement changes.
“We are very highly digitised as a public service. But they’ve digitised in a way that leaves us very fragmented. Each agency has got their own systems, their own applications, and their own points of connection with a customer. So it’s fragmented for New Zealanders, and it’s expensive, as a result,” he told me on this week’s episode of The Business of Tech, where we were joined by Myles Ward, who will assume the new role of Chief Technology Officer for the government.
We also talk about AI's adoption across government, digital driver's licences, and how the digital trust framework in development could underpin a youth social media ban here.
Listen to the full conversation on episode 118 of The Business of Tech powered by 2degrees Business, streaming on iHeartRadio and wherever you get your podcasts.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Welcome back to the Business of Tech powered by two
Degrees Business. I'm Peter Griffin and in this episode, I'm
looking at a major shakeup signal this week in how
IT procurement is done across government. Yes, the government is
embarking on what could be the most transformative overhaul of
digital procurement, IT spending and public service delivery in decades.
Speaker 2 (00:26):
The goal to save up to three.
Speaker 1 (00:28):
Point nine billion dollars over the next five years, bring
modern services to everyone's smartphone, and finally crack that fragmentation
problem that's plagued government ICT for decades. At Business Desk,
we've unfortunately documented a number of failed government IT project
in recent years, cost blowouts, delayed launches, in some cases
(00:52):
projects just digit entirely. This is all hard earned taxpayer
dollars that goes up in smoke. Approach to procurement was
obviously needed. One less about big bespoke IT systems that
take a long time to build and deploy, more about
modular systems, more agile delivery off them, and greater use
(01:15):
of off the shelf solutions hopefully provided by New Zealand
startups and tech companies. In theory, centralizing IT procurement through
the Department of Internal Affairs should stop the wasteful duplication
and put everyone finally on the same page. It could
also enable things like the All of Government app that's
(01:37):
in the works, including a digital wallet for verifying identity
and age for government and private services, a digital driver's
license even, and also the rollout of AI services across government.
Joining me this week or two of the key architects
behind this mission, Paul James, the Government Chief Digital Officer,
(01:59):
and Miles Ward, the Deputy Government Chief Digital Officer, both
of them from DEA. Miles is soon to step into
the role as Chief Technology Officer for the Government to
manage this new way of procuring IT and digital services.
It's a big change and one not without risks. But
with thirteen billion dollars in government IT spending on the
(02:22):
roadmap over the next five years, but only two thirds
of it funded, it's one that really needs to work
out well.
Speaker 2 (02:29):
So here's Paul.
Speaker 1 (02:30):
James and Miles Ward on their big plan to do
government IT procurement a hell of a lot better. Paul
and Miles Welcome to the Business of Tech. Great to
see and Paul, it's been a couple of years almost
since we last caught up a lot of water under
(02:52):
the bridge on all things digital and tech related in government.
And probably the biggest thing really is is the real
rise of artificial intelligence generative AI is everywhere you've put out,
in conjunction with NBA, a strategy national strategy for AI.
So you've laid your cards on the table. There are
light touch raging for AI. Is what you're pursuing in
(03:17):
New Zealand. Tell us where we're at, trusting in terms
of public sector adoption of AI, where are we at?
Speaker 3 (03:24):
Thanks Bet, great to be back, really delighted to have
the chance to talk a bit more about all things
digital and the public service and AI is a great
place to start. So look, our real focus has been
to say to the public service, AI is here.
Speaker 4 (03:37):
It's only a growing significance and importance.
Speaker 3 (03:39):
We've got to get our heads around it and we've
got to start building our capability around it. So our
focus has been public sector adoption of AI. Started with
some initial guidance. We've got out of framework to support
public sector adoption. We've built a community of practice to
connect public servance across the public service around AI. We've
been running some development and training. What we really want
is a leadership teams in the public service to be
(04:01):
thinking about AI, what does it mean for the services
they are responsible for, what do they need to be doing.
Speaker 4 (04:07):
We think it's still quite.
Speaker 3 (04:07):
A new emergent technology really in terms of its impact
and implications, but we need to start now to build
our capability and start thinking about what will it mean
and what can we do right.
Speaker 1 (04:17):
It's been around for a long time and there are
some notable examples I think in acc and others where
AIS being used. In terms of the generative AI, I
think you've rolled out co pilot across most government departments,
so for productivity, email presentations, and now a lot of
public servants who are using it. You're seeing any interesting
(04:37):
use cases emerging for generative AI beyond that productivity stuff.
Speaker 4 (04:41):
Yeah, well, it's a great question.
Speaker 3 (04:42):
We've just completed our annual survey of AI uptake across
public sector. It's on our website digital dot gov, dot
z quick Sales patch there and two hundred use cases
across the core public service that we work with. Still
the majority are in if you like personal productivity and
call centers, etc. Really pleasingly a quarter of them are
(05:04):
gone past proof of concept or use cases and then
now into operation production, so we're starting to see bettered
and baked in use We think it's going to be
a little while before it really gets into direct customer interface.
We think the next best use cases are probably still
going to be in processing, back office processing information volumes
(05:25):
of information tends you into the tech itself, how tech
has managed, developed and supported, But we do need to
be thinking about that customer interface. Around general of AI,
we think it still keeps you a little way.
Speaker 1 (05:37):
Off any sort of sense of how productivity is being
impacted by the use of AI. In that productivity space,
people being able to summarize documents fast, to bring together reports,
respond to emails faster. Are you getting any baseline across
government about efficiency gains?
Speaker 3 (05:54):
Yeah, Look, it'd be a great thing to have probably
better data than we've got. But we know in the
call center example, that the transcription of a call is
happening instantaneous through the use of AI. It would have
used to take in a call center worker six to
ten minutes to transcribe that call, So there's an immediate
saving there. So we've got data that pulls together that picture.
(06:16):
But I think really trying to get into what is
that efficiency and productivity impact from AI and finding ways
to measure that. Miles and I were just in Singapore
last week and read a conversation about a dozen countries
we're with for a couple of days with Astraight about
how they think about measuring AI.
Speaker 4 (06:31):
Miles, you might want to talk.
Speaker 5 (06:32):
About Yeah, I think there's a big discussion at the
moment about the return on investment versus value, and what's
been seen is a lot of productivity gains in government.
You look at the value not only the private value,
but the public value. So there's a lot of discussions
around how to measure that. So for example housing, you
might have good processes around how you look at the
(06:55):
high use cases, but you look at the public value,
which is about well the impact on poverty.
Speaker 2 (07:01):
But when you look at the ROI, what.
Speaker 5 (07:03):
A lot of organizations are seeing is that actually the
ROI on that return on investment is quite difficult. Yes,
now that doesn't mean that everyone is at all in.
That just means it's probably the infancy stages where we're
still trying to develop where that return on investment, where
the cash is going to be coming out of the
system where the decreases are going to come from, but
(07:24):
that doesn't outweigh definitely the productivity gains.
Speaker 1 (07:27):
Yeah, and you sort of have to experiment responsibly government
to figure out pilot things. And I think that's all
the studies from the big consulting firms are saying that
we're struggling to get out of proof of concept phase
with generative AI, and that goes through the best private
companies for startups as well.
Speaker 4 (07:45):
Yeah. Look, we're in Singapore.
Speaker 3 (07:46):
We're put of a round table with private sector there
and the key message from them is most of the
use cases haven't worked.
Speaker 4 (07:52):
They've turned off more than they've kept going.
Speaker 3 (07:54):
But that's not deterring them because the things that are
working that can really see the.
Speaker 4 (07:58):
Promise of it.
Speaker 3 (08:00):
It aspects again to all the technology has been with
us for a little while, the maturity of it and
then the business impacts are still in the infancy, so
we've got to be across as a public service, we
have to be engaging with it. But I do think
the reality is it might take us a few more
years to really work out where is the big varia
for New Zealanders from the deployment of this across our services.
Speaker 1 (08:20):
Right and you put the guidance in place, it's pretty
clear what you can and can't do is a shadow
AI as they call it.
Speaker 2 (08:26):
Is that an issue and government?
Speaker 1 (08:27):
Are you finding that public services are going, Oh, I'd
just rather use chat GPT to do this and is
that a risk?
Speaker 5 (08:33):
I think if we look at the things that we've
got in place, so we have a community of practice,
and so the community practice is quite tight around how
we want to responsibly use it. So a lot of
the guidance and frameworks about responsibility, we've got a lot
of effort in terms of the policy, the frameworks, the guidance.
Is it going to be instances of where people use
(08:55):
chet GBT probably in a home sense on data debts
just to do with their own private but in terms
of public sector, I think there's a lot of self
awareness around what you can and can't do. I think
also there's a lot of if it being made around
the different types of AI, and so it's not just
(09:16):
the chat GBT, So we know these machine learning there's
lots of different types of AI, and we're looking at
all types to just make sure that we've got the
right tools. We want to be agnostic of the tools.
We just want to make sure we use the right
AI for the right reasons.
Speaker 3 (09:33):
For myself, Petter, We've got Copilot within department term Affairs,
which obviously I'm based on use that a bit, but
I do use on my personal phone different AI tools
as well, and I must admit to occasionally asking them
a work question.
Speaker 4 (09:47):
It's not any private information or anything.
Speaker 3 (09:49):
Like that, so I guess that reflects that, you know,
we don't want to import all those tools into our
environment yet, but I'm still interested in how do they work,
how do I compare them myself. I think that just
it's again to technology in the infancy. We will get
to a point where there's an approved tool set across
the public sector at some point, but it's just moving.
The technology is moving so fast, and that's one of
the real insights we see is that it is just
(10:12):
so quick. I mean, where we are now a year
ago you wouldn't have expected to be and it will
be the same again in another year's time.
Speaker 2 (10:18):
In terms of the AI strategy.
Speaker 1 (10:19):
A bit of pushback from the business community and particularly
from the academic community. You'll have seen that the letter
from Andrew Linsen and others really saying, look, we urgently
need to address regulation, and that was something that in
the strategy. So we're going to use existing legislation, will
tweak if need be, but definitely nowhere near as aggressive
(10:41):
as for instance, at EU and even parts of the
US by state, you know, they're doing a lot of regulation.
What was your take on that feedback?
Speaker 3 (10:50):
Yeah, Look, it's a life debate, clearly without a doubt.
So that strategy has been led by NB where we
were involved, our advice is entirely consistent with the strategy landed.
So our focus is the public sector. We don't need
law to regulate the public sector. We can regulate them
through our guidance, through the framework we've put in place.
So in effect we are regulating public sector use right,
but just not through law in terms of wider regulation
(11:12):
across the economy in terms of statute, you know. Fascinatingly again,
we're in Singapore last week talking to half dozen countries.
The move there is to move away from regulation because
what the find is the technology is moving so quick
you just can't do it as a statute. It's going
to be much more effective to do it in rules
and guidance. Than it is baking it into statue, and
most countries actually do have underpinning legal frameworks around privacy,
(11:33):
around security that work pretty effectively for a range of
different technologies, so potentially a better wait and see as well.
Speaker 1 (11:39):
The other I think criticism is no mention of sovereign
AI and the effort to not necessarily build our own
large language model. It's hugely expensive, but having more autonomy
over our AI systems in New Zealand so it reflects
our culture and our priorities and not just be put
onto cloud and in a big tech a center I
(12:01):
guess more MB's sort of department by any views on that, No.
Speaker 3 (12:06):
It's almost ours because we think about the public sector.
So what does the public sector need in terms of
those services to retain sovereign? And for us and sovereign,
it's really about the confidence of the public, the trust
and resilience to know that they can continue to operate.
So that's what we need to be mindful of. Look,
our thinking at this point is the main thing we
need to do to retain sovereignty is probably to retain
(12:27):
flexibility and agility, so not getting locked down overly committed,
because again the technology is moving so.
Speaker 4 (12:34):
Quickly, it's evolving very rapidly.
Speaker 3 (12:37):
I think retaining flexibility and agility, so building capability, but
retaining the ability about a move to use different tool
sets to make good choice about what's the right tool
set for the right issue.
Speaker 4 (12:48):
That's where we keep.
Speaker 3 (12:49):
Our sovereignty for now, and then at some point maybe
we need to think about whether back there is something
a bit more in terms of buy or build, etc.
But at this stage, retaining flexibility and agility as where
we're focused.
Speaker 1 (13:01):
Flexibility and agility, I think is central to this cabinet
paper that's just been released that is really central to
what DIA does. Fascinating stuff here that outlines the problem
which we've known about for a while. Thirteen billion dollars
of largely unfunded commitments to ICT projects over the next
five years in New Zealand. So where's the money going
(13:22):
to come for all of these really important IT projects.
Speaker 2 (13:25):
It's not really sustainable.
Speaker 1 (13:27):
So presumably you took that case to the minister and
to Cabinet and said, look, we've got to do something
about this. What has been approved, what has been decided
that DIA is going to do about this.
Speaker 3 (13:38):
Look, I'm delighted to speak about this and I'll just
preface it, but then I'll hand over it to Miles,
and I think what it say is the problem that
we saw and talked to Cabinet was a couple of
parts to it.
Speaker 4 (13:48):
What is affordability.
Speaker 3 (13:49):
So the twelve to thirteen billion plan spend over four
to five years, which about two thirds is funded, but
there's a big chunk still not funded, but really underlying
issues fragmentation.
Speaker 4 (13:58):
So we are very.
Speaker 3 (13:59):
Highlyized as a public service. In our public services compared
to the world. We've been successful. Agencies have digitized, but
the digitized in a way that leads us very fragmented.
Every agency has got their own set up, their own systems,
their own applications, and their own points of connection with
a customer. So it's fragmented for New Zealanders as customers,
and it's fragmented in terms of the technology, and it's
(14:19):
extensive we think as a result. So that's the preface
and the problem of statement that we've talked to government
and we've made proposal about some things to be done differently,
and we're grateful that Cabinet supported that. Miles maybe touched
on the big things that we're into.
Speaker 5 (14:33):
Yeah, look, I think it's an exciting opportunity, and I
think falls just absolutely underline why we need to do it.
A couple of other things that the footprint is way
too big, way too expensive, and when we start looking
at streamlining services, we need to connect up a lot more.
So we are looking at a at a target state,
(14:55):
and the target state is about navigating agencies toward week
government need to be. And that's about how we reuse systems.
We get modular systems, smaller systems, we're a lot more
agile in terms of how we deliver those services, but
we leverage of things like digital public infrastructure where we
have reusable assets. So instead of agencies building everyone building
(15:19):
a payment system where we have one, we look at
digital identity and we'll talk about the government app.
Speaker 4 (15:25):
We'll have one or a government app.
Speaker 5 (15:27):
We'll have one wallet, we'll have one issuance platform, we'll
have common capability that agencies will build to and utilize.
And so the target state just gives that direction of
travel and just enables those architects to be able to
move those agencies in line with what a joined up
government looks like. There's great things around how we look
(15:50):
at centralized investment, centralized procurement, and the great thing there
is about how we can start aggregating procurement, getting better
price points, getting the economy as a scar that we
should be looking at how we purchase once at ensuring
we're directing the traffic around what agencies are looking to
(16:10):
procure moving forward, but also in align with the technology
that we need, so bespoke becomes something that doesn't happen,
but rather we go to what is common and the
outcome there is to ensure we've got a joined up government.
Speaker 1 (16:25):
So that's a five year target state that will be
evaluated and then set again. And interestingly you put in
an estimate here in the cabinet paper up to potentially
three billion dollars you think you can say by taking
this approach.
Speaker 2 (16:40):
In the next five years.
Speaker 1 (16:42):
So that is through the changes in procurement, avoiding duplication
in terms of new systems that are rolling out.
Speaker 5 (16:49):
Yeah, there's a number of things so we don't all
have to buy the same pieces of tech. We know
therese better price points, we know there's licensing and over
time we know that the cost is going to be
going down. We know there's some procurement that we don't need,
so there's a combination of things. So I think that
we'll reach the target over that five year period.
Speaker 4 (17:11):
At the moment, we've got a couple of proof points.
Speaker 3 (17:13):
This one is the All Government Common Capabilities Portfolio that
we support, So the billion dollars went through that last
year across the public sector and there's one hundred million
dollars in savings from that, so there's a ten percent
saving in our existing procurement processes. So stepping that up,
we can see the pathway to that. The best example
we've got at the moment is we started a programmer
work a couple of years ago where we realized twenty
(17:34):
three agencies we're looking to replace their finance systems over the.
Speaker 4 (17:36):
Next five years. It's got to be a better way.
Speaker 3 (17:39):
So spinning out of the IR transformation, we bought the
Common Process Model license for New Zealand off them, and
the endpoint for us will be a panel of half
a dozen providers providing not just finance, but the AIRP
solutions are all configured to a common process model, so
it's simplified and standardized across the public sector, and public
sector agencies will just select one of those, so we're
forecasting that's one hundred and sixty million dollars over eight years.
Speaker 4 (18:01):
Through that process, what.
Speaker 3 (18:03):
We realize is we can't do that point by point
across a different functionality. So it took us eighteen months
two years to get that going. We've got to get
to change the system rather than and this is what
the Cabinet paper and the proposals and there is, we've
got to step beyond going individual lines of functionality to
actually changing the system of how government works around digital
and that's what we're aiming for.
Speaker 1 (18:21):
There'll be a Chief Technology Officer role to oversee all
of this, which will be miles.
Speaker 5 (18:26):
Yeah, I'll come under the GCDO function. The advantage of
that is and look, this isn't the command control side.
This is more bringing the government together being very clear
on the digital state. And you do need that CTO
to make the call at the end of the day
on what technology we're wanting.
Speaker 2 (18:45):
We do need to.
Speaker 5 (18:46):
Make the calls to say, these are the finance systems,
this is how we're going to be joining up the government.
This is how we're going to be sharing data, This
is how we're going to be maintaining privacy. This is
where AI is going to be used, so that functionality,
that CTO role is extremely important to determine what the
digital state is.
Speaker 1 (19:04):
And good to see more provisions around accountability here. So
there will be KPIs for each Chief Executive or each
government department to monitor their progress in line with that
target state. So it's good to see the Minister will
have power of veto over projects talk us through. Was
that something you suggested to them?
Speaker 3 (19:24):
Yeah, it was so. Look, we do want to be
much more coordinated. I think multi put it really lovely.
They're pulling the family of government together, but we're not
going to be total centralized commanding control.
Speaker 4 (19:33):
The strength of the nesign.
Speaker 3 (19:34):
Public service is the agility of individual agencies. But the
moment agencies buy or build technology for themselves in their
own requirements and it doesn't all add up to work
for the public service as a whole orphan new zionder
So that's what we've got to change. So we need
agencies to not just buy a build for themselves, but
to buy a build for the public service. That's the
(19:54):
target state, and so we'll be guiding that, we'll be
setting the direction. But yeah, we need KPIs, we need
the accountabilities and if we get to the point where
there's a tension between agency requirements and system requirements, we
need the ability for ministers to be exercise a decision.
Speaker 1 (20:08):
How has this gone down anecdotally with you know, as
you've socialized this with chief executives and now some would
say it's a bit of a paragraph BYDIA. Personally, I
think it's it's absolutely What we need is that realization
that because their budgets are tight, they realize they can
afford what's in the pipeline.
Speaker 4 (20:27):
Yeah, look, that's exactly right.
Speaker 3 (20:29):
So I might talk about ceas and or hand to miles,
you can talk about some of the CEO as well.
So look, I think c's recognized now is the time,
that's the feedback we've got. So they've got questions about
exactly how it will work, and so do we, and
we're going to answer those questions with them. So I've
got a session tomorrow with a bunch of cees to
work this through. We've got to see you retreat on Friday.
We'll be talking about this as well. So you know,
(20:49):
we work quite collectively in the New Zealand and Public Service,
and that's in practice what we'll be doing. Of course,
the cees see the need for the public service to evolve.
They know both the fiscal position, so we have to
do something differently. But actually technology has evolved and changed
so that offers opportunities to do things differently too. So
I think there is a broad consensus that this is
the right direction, this is the right thing to do,
(21:12):
with a few questions about actually how will it work
or what will it mean? And that's our job over
the next three to six months is to build that
out with.
Speaker 2 (21:18):
Them, right and presumably miles.
Speaker 1 (21:20):
You know, if an agency has a real specific use
case for something and they go, look what you've got
on the off the shelf products set doesn't suit us,
just that they can still argue the case for that.
Speaker 5 (21:30):
Yeah, I think pragmatism is a thing that underpins this. Pragmatism.
Pragmatism pragmatism. The idea of the target state is to
give that line of direction, so right at the start
people know where there's going to be a little bit
of difficulty, and that's where we have the discussion. The
first thing is not bespoke, reusable, repeatable, common off the shelf,
(21:51):
don't build, so the market is full of good solutions there.
Let's use the market and this is where the private
sector plays a key role.
Speaker 4 (21:58):
Zeting plays a key role.
Speaker 5 (22:00):
Modular states play a key role, lower cost projects faster.
So we're looking at the paraalim ships quite a bit
here to support where we want to hit the target state.
So it'll be definitely, by exception, by some pretty in
depth discussion. If someone wants to go outside the target state,
there might be some specialist need. The tax system is specialist.
(22:22):
There are some certain health systems. But when you look
at a CRM, well, a CRM is a CRM. We
want to make sure we get a single view of
the customer. So let's make sure we consolidate the CRMs.
Let's make sure the finance systems operate to a gl.
Let's consolidate the finance systems. So there's just some pragmatic
(22:42):
things that we do in terms of the reference groups.
We have the CIO reference groups, we have deputy CE groups,
and I think the feedback in these is that it's
a natural conclusion in terms of joining up government. So
there's a lot of support, a lot of buy in.
The big agencies very keen on this, mainly because we
can leverage some of those existing investments as key things
(23:07):
that we can reuse and share. So there is a
lot of buy in and you know, there's a lot
of maturity when you look at some of the set
sees and the DC is there.
Speaker 4 (23:17):
So pregmatism, pregmantism, pregmatism, Yeah, I think mind just picking
on a point miles is almost mentioned.
Speaker 3 (23:21):
But just to be clear, we're not proposing that gcdo
buy and build everything, you know very much for seeing
ourselves as conductor of the orchestra, we're not the lead
violinist or so. Some of the big agencies will build
things or buy things, but they'll do it for the
public service, but under a clear picture that we've built.
Speaker 1 (23:41):
So yeah, and the idea of smaller, faster, more modular.
So you know, the proturement rules were updated. You know
that economic benefit clauses is very front and center and
near this expectation at New Zealand companies will get some
of that work. Presumably that's only going to increase the
lif theihood that I startups and our own tech companies
(24:03):
can get into the procurement.
Speaker 4 (24:05):
Yeah, definitely.
Speaker 3 (24:05):
Look, we've got pretty good uptake by New Zealand firms
already of our procurement. So in terms of gcdo organized
common capabilities, about fifty five percent ghost of New Zealand
firms already. And when you go to marketplace, which is
our key channel, which is away from if you like,
some of the big infrastructure provision, it's about three quarters
of the spin through their ghost to New Zealand firms.
So we've got good channels and market engagement already. But yes,
(24:28):
this modular, more itterative, smaller should create great opportunities for
innovation and the vendor market in New Zealand as well.
Speaker 4 (24:35):
In terms of the public service.
Speaker 1 (24:36):
And myles, it looks as though this approach has already
been factored into this all of Government app that is
under development to New Zealand companies Dave Clike and ZED
and Matter are currently building that tell us about what
you're trying to achieve with the all of Government app.
Speaker 5 (24:52):
Sure, so if we start at digital identity, I think
that's a great point and we're had a look at
the paradigm shifts, and the paradigm shifts are the citizen,
the customer wants to be in control of their data.
We know that we want to go to a decentralized
way of how we manage a digital identity. We know
the private sector plays a big role when we start
(25:13):
looking at AMIL CFT lowering the compliance burden. We know
when we approve a document the costs are quite high,
the compliance costs are quite lengthy. So we looked at
all of that and that's what's moved us to as
well as the modular approach. So we've got a program
of work which looks at in all the government app
to enable the customer to be able to navigate services
(25:36):
a lot more effectively. Imagine a time when you can
go through the app and you can proactively look at
the services that you're entitled to. Imagine a time when
you can get the notifications and messaging through your mobile app,
can store your credential in your wallet, and so we've
got a good pathway around where we want to take
the app. I think it's an exciting journey where we
(25:56):
start moving the government to operate how the citizen and
how the customer wants to navigate these services. I mean,
we see it every day in the private sector banking, insurance.
People want to operate on their terms and that's what
we're doing. We're looking at how we operate to support
them and their life event in terms of their event
(26:19):
using the private sector getting the innovation there. This is
what the whole work program is all about. This is
no longer just a government thing. So sort of two
elements to it.
Speaker 1 (26:27):
There's the app where literally every government department, your interaction
with them, you can keep an eye on that. It
could be me paying my GSD to IOD for instance,
it could be social developments, so that'll be there. But
then there's the identity verification and while it aspect, it
offered as well and you can keep a credential in
(26:49):
there and that ties into this framework that was passed
into legislation that has been in development for the last
couple of years which underpins all of that a safe
and secure way identifying yourself and verifying your ID without
having to go to a central database. It's all done
essentially on your.
Speaker 2 (27:07):
Device, that's right.
Speaker 5 (27:08):
And what we did accelerate the market on is with
the new Zealand Verify app. So the market when quite ready,
so we developed the verification app that's going to definitely
help things around hospitality industry.
Speaker 4 (27:19):
It's going to help a number.
Speaker 5 (27:20):
Of different things The other thing that underpins it is
the international standards, so we know that cross jurisdictional work
is absolutely key. So when an international driver's license comes through,
we know we'll be.
Speaker 4 (27:32):
Able to verify it.
Speaker 5 (27:33):
So we're well advanced around, not only locally but internationally
as well.
Speaker 1 (27:37):
And Paul, so where are we at in the timeframe
on the ail of government app when you're likely to
see that launched?
Speaker 3 (27:44):
We make a good progress, I think keep an eye
on social media. I think you'll see Minister Collins demonstrating
talking about this over the.
Speaker 4 (27:50):
Next week or two about where we're up to, so
we'll have something built invisible by the end of the year.
Speaker 3 (27:56):
I think they're kind of migrating services to it will
take a bit more time. So whatever pipeline is services,
and I think it should be clear as well, we're
not planning to put all government services on one. Actually,
we don't think that's going to suit all New Zealanders.
So I think the app will work well for the
less complex, the more transactional services and the kind of
migration of certizens that we'll have to look at where
(28:17):
agency that are up to in terms of their renewal
cycle and their transformation processes as well, So we will
be building functionality in it over a period of time.
And what we really want to get to is feedback
groups from customers tope. So rather than just building it
and placing it out there in a monoethic way, actually
build it literated, start to join services up. See what
the feedback we can pick up from the customer interaction
(28:37):
with it is, what's working? What do we need to redesign?
So we want to see this more, if you like,
over time start to evolve further, and we're quite excited because.
Speaker 4 (28:46):
We're not entirely sure where it will get to it
in some.
Speaker 3 (28:48):
Way, but we do expect to see other channels maintain
and still to develop other channels as well. It won't
just be the single place for customers to go.
Speaker 1 (28:55):
To, and the digital identity framework underpinning it can be
lies by private organizations Totland as well.
Speaker 2 (29:02):
So how is that going?
Speaker 1 (29:04):
What's been the appetite to get accredited to be part
of that?
Speaker 3 (29:07):
Starting to really pick up momentum. We think over the
next twelve to eighteen months we'll get lots of interests.
Two great use cases for me. One is we've got
digital driver's licenses and Queensland. Now we'll have Queensland is
tuning up to a rental car company in New Zealand
with their digital driver's license. So that's the Verify app
that Males talked about. That will enable New Zealand businesses
to recognize and acknowledge an international digital driver's license. The
(29:28):
other use cases my young adult children wondering around town
with their passports on a Saturday night proven how old
are to get into the pub's terrifies men that carry
their passport around it. In the future, what they're about
to do is have their phone, which they never without,
and on their phone will be their proof of age
and their wallet, and they won't have to disclose where
they live, their middle name, everything that they can just
(29:49):
simply show who they are and how old they are.
And that's the power of that. And so I think
we'll see real interests from the private sector. We're actually
moles and I were invited to meet with the banker's
associate a couple of weeks ago, so seventy to eighteen
banks from across the country there took about digital identity.
So there is quite a lot of appetite in the
private sector and over the next twelve to two ten months,
(30:10):
I think the Zanders will start to see what that
looks like and see.
Speaker 2 (30:13):
A real impact and miles.
Speaker 1 (30:14):
Eventually, I guess this would replace real me which people
are using to apply for a passport, things like that
renewer passport online.
Speaker 4 (30:21):
Yeah.
Speaker 5 (30:21):
I think there's a moderate approach that we're looking to take,
so there'll be less reliance in terms of some of
the existing functionality. And as we move to the wallet,
that's where the movement for the credential will actually be.
Speaker 1 (30:35):
And you're talking about overseas driver's license in Queensland and
being able to show your driver's license on your phone,
So I guess the foundations are there to roll.
Speaker 2 (30:45):
That out for our own driver's licenses.
Speaker 5 (30:47):
That's the plan, and we definitely want to put as
many credentials in there. We could be certifications, it could
be a number of different things, so we'll have a
pipeline of activity.
Speaker 1 (30:57):
So potentially you know, in future a few a university
student for instance, and you've done a degree, so you
could have that credential in there.
Speaker 4 (31:07):
We want to credentialize everything. Yeah, so.
Speaker 3 (31:10):
We love the educational achievements to identity, proof of income,
your bank account, credentials that come from public sector and
private sector. For the New Zealand's are better carrying their
while and use when they need them as opposed to
getting on a call center and asking for a bit
of information to be emailed to them, which is actually
their information already.
Speaker 1 (31:28):
And look, this is going on around the world in
different ways. Australia's put a big amount of investment into
this and it's really perminent over there because of the
legislative changes they're making around age verification for websites that's
fast approaching December tenth. They want to have that system
in place for social media networks, you know the under
(31:49):
sixteen ban.
Speaker 2 (31:50):
You're also looking at.
Speaker 1 (31:51):
It for search engines, verifying your age when you log
into a search engine so you can't just search all
random violence and pornography and the line. And for adult
websites coming next year as well. We've seen that in
the UK several US states. That has been broached here
in parliament a member's bill. So is that something you
envisage if parliamentarians decide that's the way we want to
(32:14):
go In New Zealand, this is a system that could
in that age verification totally.
Speaker 3 (32:18):
The technology will enable that. So and you're quite right.
I mean there's a select but inquiry running at the moment.
Ministry of Education is leading some work. So government is
currently contemplating and they'll make some decision whether they want
to do it or not. And if they decide they
want to do it, then we'll make sure that there's
the enabling technology in place and able to support that.
Speaker 1 (32:34):
So, in terms of miles of the future of governments
and how the experience is going to change for a consumer,
I think people will love the convenience of being able
to open an app, even if it's only a subset
of government departments, if it's the ones that are really
pregnent to your life and keeping on top of your
personal admin, they love that. There will be because I
(32:57):
see you know, the Social Investment Agency is involved with this.
This as part of the data leadership for digital service
delivery that you're involved in and stewarding. They will have
input into that. A lot of people will be thinking
they're putting on my data in one place to surveil me.
So what do you say to people who have that concern?
Speaker 5 (33:16):
I think if we look at what underpins all of
this We know that a lot of jurisdictions have done
a lot of things.
Speaker 4 (33:21):
There's been a lot of challenges, and.
Speaker 5 (33:23):
What we want to do is left for off the challenges,
not reinvent anything, not trying to look at being the
most leading edge in terms of that, we're making it up.
So we're looking at leapfrogging and making sure we're learning
from the challenges. This isn't about a big brother thing.
This is about establishing what we've got now. It's respecting
the privacy. It's making sure that the citizen, the customer
(33:47):
is in control of their data. What they do with
it will be managed through the digital identity side, and
it puts the person into power of their data. And
that's the underlying principles of what we're aiming here.
Speaker 3 (34:00):
I mean, we certainly won't be able to monitor the
app in the sense of course we'll see where there's
a transaction point and a customer, but actually what people
are choosing to hold in their wallet, it's their information.
We weren't not going to look into their phone or
anything like that, so there'll be no surveillance. The reference
to Sia and the Chinet paper is really about they've
got a mandate to look at an investment approach across government.
They need information to better be pulled together and exchanged.
(34:22):
We need information to be able to be pulled together
in exchange to enable customers to access services.
Speaker 4 (34:26):
And the question is we.
Speaker 3 (34:28):
Probably don't need two competing forms of infrastructure to enable
that to happen. So we're to the interest a line
that when we think about the digital infrastructure and the
data standards, an approach that enable data to move around
the public sector, how do we do that together from
our perspective with customer consent in a privacy and secure way.
For SIA, I'm sure they'll be focused on those things too,
(34:48):
but for a different purpose.
Speaker 4 (34:49):
So just where we work together.
Speaker 1 (34:51):
And as you point out in the paper, Singapore, Estonia
in particularly has been a leader and centralizing this sort
of thing, and it has paid divid for those sort
of small advanced economies, isn't it.
Speaker 4 (35:02):
Yeah, definitely.
Speaker 3 (35:03):
Again, they were in Singapore with us last week, so
we've definitely been learning from them and I think the
Estonian's amazing what they've done. But we probably wouldn't just
build one thing again in the setup of our public
service and services, and so we might have multiple data
exchange infrastructure across different sectors, for example, the social sector
and the environment sector for lots of good reasons. But
(35:25):
we can still learn from them about how they've done
it in terms of how we might then do it.
Speaker 1 (35:29):
Yeah, well, a lot going on, some really positive changes happening,
and I think changes out hopefully would whether any change
of government as well. You get the sense that there
is bipartisan support for what you've proposed.
Speaker 4 (35:43):
Here, Yeah, certainly. I mean in the role.
Speaker 3 (35:45):
While I've been in the role, I've worked under both
Labour led administrations and national administrations and there has not
been a significant difference in terms of underlying approach. It's
really just been focused on speed and if we digitize things,
that should enable governments to make their policy choices more easy,
so that they should all sport digitalization and then they
can make the different passage choices across that. So as
(36:05):
we start to thinking about what services we pull together,
how we offer.
Speaker 4 (36:08):
Them in different ways.
Speaker 3 (36:09):
Different governments might prioritize different services, whether it's services for
businesses or services in the social sector, but the underpinning
digital should be agnostic of both of those people and
costing us a lot less fingers crossed.
Speaker 1 (36:22):
Yes, Paul Miles, thanks so much for coming on the
Business of Tech and good luck for all this change
that's underway.
Speaker 4 (36:29):
Core. Thanks be always a pleasure, So thanks to.
Speaker 1 (36:37):
Paul James and Miles Ward for talking through some of
the changes that are coming to IT, procurement and government.
Since I recorded this episode, there's been some interesting feedback
to the cabinet paper, which I'll link to in the
show notes. Some good discussion on my LinkedIn post about this,
people positive about it, but also pointing out the risks
of a one size fits all approach to IT systems
(37:00):
and services, which is a valid concern.
Speaker 2 (37:03):
As Paul and Miles pointed out.
Speaker 1 (37:06):
Is still scope for agencies to argue the case for
particular technologies. You know. It's really aimed at the stuff
that's common to every department, customer relationship management, software, Hayroll,
enterprise resource planning. The duplication around some of this stuff
in recent years has been mind boggling. Ben Read, a
(37:26):
regular guest on the Business of Tech, posed a couple
of interesting questions which I didn't get to in the
interview other than talking about the AI sovereignty issues, but
I'll follow up with DIA on them. For instance, he
asked how much IT procurement going forward will mandate open
source and data portability rather than proprietary and locked in
(37:46):
platforms and applications. And what about the all of government
IT architecture underpinning all of this is a fully open
common API or application programming interface to all of government
services even been considered in all of this.
Speaker 2 (38:02):
Really good questions here from Ben.
Speaker 1 (38:04):
Let me know what you think of the tech procurement shakeup.
Will it unlock innovation and improve digital services whilst saving
us money? Or is it potentially creating a new set
of headaches for us?
Speaker 2 (38:14):
Get in touch.
Speaker 1 (38:15):
You'll find me on LinkedIn or email me. I'm on
Peter at Petergriffin dot co dot m Z. That's it
for this episode. Thanks for tuning in. Catch you next
week on iHeartRadio or via your favorite podcast app with
another episode of the Business of Tech.
Speaker 2 (38:30):
Till then, have a great week.
Welcome back to the Business of Tech powered by two
Degrees Business. I'm Peter Griffin and in this episode, I'm
looking at a major shakeup signal this week in how
IT procurement is done across government. Yes, the government is
embarking on what could be the most transformative overhaul of
digital procurement, IT spending and public service delivery in decades.
Speaker 2 (00:26):
The goal to save up to three.
Speaker 1 (00:28):
Point nine billion dollars over the next five years, bring
modern services to everyone's smartphone, and finally crack that fragmentation
problem that's plagued government ICT for decades. At Business Desk,
we've unfortunately documented a number of failed government IT project
in recent years, cost blowouts, delayed launches, in some cases
(00:52):
projects just digit entirely. This is all hard earned taxpayer
dollars that goes up in smoke. Approach to procurement was
obviously needed. One less about big bespoke IT systems that
take a long time to build and deploy, more about
modular systems, more agile delivery off them, and greater use
(01:15):
of off the shelf solutions hopefully provided by New Zealand
startups and tech companies. In theory, centralizing IT procurement through
the Department of Internal Affairs should stop the wasteful duplication
and put everyone finally on the same page. It could
also enable things like the All of Government app that's
(01:37):
in the works, including a digital wallet for verifying identity
and age for government and private services, a digital driver's
license even, and also the rollout of AI services across government.
Joining me this week or two of the key architects
behind this mission, Paul James, the Government Chief Digital Officer,
(01:59):
and Miles Ward, the Deputy Government Chief Digital Officer, both
of them from DEA. Miles is soon to step into
the role as Chief Technology Officer for the Government to
manage this new way of procuring IT and digital services.
It's a big change and one not without risks. But
with thirteen billion dollars in government IT spending on the
(02:22):
roadmap over the next five years, but only two thirds
of it funded, it's one that really needs to work
out well.
Speaker 2 (02:29):
So here's Paul.
Speaker 1 (02:30):
James and Miles Ward on their big plan to do
government IT procurement a hell of a lot better. Paul
and Miles Welcome to the Business of Tech. Great to
see and Paul, it's been a couple of years almost
since we last caught up a lot of water under
(02:52):
the bridge on all things digital and tech related in government.
And probably the biggest thing really is is the real
rise of artificial intelligence generative AI is everywhere you've put out,
in conjunction with NBA, a strategy national strategy for AI.
So you've laid your cards on the table. There are
light touch raging for AI. Is what you're pursuing in
(03:17):
New Zealand. Tell us where we're at, trusting in terms
of public sector adoption of AI, where are we at?
Speaker 3 (03:24):
Thanks Bet, great to be back, really delighted to have
the chance to talk a bit more about all things
digital and the public service and AI is a great
place to start. So look, our real focus has been
to say to the public service, AI is here.
Speaker 4 (03:37):
It's only a growing significance and importance.
Speaker 3 (03:39):
We've got to get our heads around it and we've
got to start building our capability around it. So our
focus has been public sector adoption of AI. Started with
some initial guidance. We've got out of framework to support
public sector adoption. We've built a community of practice to
connect public servance across the public service around AI. We've
been running some development and training. What we really want
is a leadership teams in the public service to be
(04:01):
thinking about AI, what does it mean for the services
they are responsible for, what do they need to be doing.
Speaker 4 (04:07):
We think it's still quite.
Speaker 3 (04:07):
A new emergent technology really in terms of its impact
and implications, but we need to start now to build
our capability and start thinking about what will it mean
and what can we do right.
Speaker 1 (04:17):
It's been around for a long time and there are
some notable examples I think in acc and others where
AIS being used. In terms of the generative AI, I
think you've rolled out co pilot across most government departments,
so for productivity, email presentations, and now a lot of
public servants who are using it. You're seeing any interesting
(04:37):
use cases emerging for generative AI beyond that productivity stuff.
Speaker 4 (04:41):
Yeah, well, it's a great question.
Speaker 3 (04:42):
We've just completed our annual survey of AI uptake across
public sector. It's on our website digital dot gov, dot
z quick Sales patch there and two hundred use cases
across the core public service that we work with. Still
the majority are in if you like personal productivity and
call centers, etc. Really pleasingly a quarter of them are
(05:04):
gone past proof of concept or use cases and then
now into operation production, so we're starting to see bettered
and baked in use We think it's going to be
a little while before it really gets into direct customer interface.
We think the next best use cases are probably still
going to be in processing, back office processing information volumes
(05:25):
of information tends you into the tech itself, how tech
has managed, developed and supported, But we do need to
be thinking about that customer interface. Around general of AI,
we think it still keeps you a little way.
Speaker 1 (05:37):
Off any sort of sense of how productivity is being
impacted by the use of AI. In that productivity space,
people being able to summarize documents fast, to bring together reports,
respond to emails faster. Are you getting any baseline across
government about efficiency gains?
Speaker 3 (05:54):
Yeah, Look, it'd be a great thing to have probably
better data than we've got. But we know in the
call center example, that the transcription of a call is
happening instantaneous through the use of AI. It would have
used to take in a call center worker six to
ten minutes to transcribe that call, So there's an immediate
saving there. So we've got data that pulls together that picture.
(06:16):
But I think really trying to get into what is
that efficiency and productivity impact from AI and finding ways
to measure that. Miles and I were just in Singapore
last week and read a conversation about a dozen countries
we're with for a couple of days with Astraight about
how they think about measuring AI.
Speaker 4 (06:31):
Miles, you might want to talk.
Speaker 5 (06:32):
About Yeah, I think there's a big discussion at the
moment about the return on investment versus value, and what's
been seen is a lot of productivity gains in government.
You look at the value not only the private value,
but the public value. So there's a lot of discussions
around how to measure that. So for example housing, you
might have good processes around how you look at the
(06:55):
high use cases, but you look at the public value,
which is about well the impact on poverty.
Speaker 2 (07:01):
But when you look at the ROI, what.
Speaker 5 (07:03):
A lot of organizations are seeing is that actually the
ROI on that return on investment is quite difficult. Yes,
now that doesn't mean that everyone is at all in.
That just means it's probably the infancy stages where we're
still trying to develop where that return on investment, where
the cash is going to be coming out of the
system where the decreases are going to come from, but
(07:24):
that doesn't outweigh definitely the productivity gains.
Speaker 1 (07:27):
Yeah, and you sort of have to experiment responsibly government
to figure out pilot things. And I think that's all
the studies from the big consulting firms are saying that
we're struggling to get out of proof of concept phase
with generative AI, and that goes through the best private
companies for startups as well.
Speaker 4 (07:45):
Yeah. Look, we're in Singapore.
Speaker 3 (07:46):
We're put of a round table with private sector there
and the key message from them is most of the
use cases haven't worked.
Speaker 4 (07:52):
They've turned off more than they've kept going.
Speaker 3 (07:54):
But that's not deterring them because the things that are
working that can really see the.
Speaker 4 (07:58):
Promise of it.
Speaker 3 (08:00):
It aspects again to all the technology has been with
us for a little while, the maturity of it and
then the business impacts are still in the infancy, so
we've got to be across as a public service, we
have to be engaging with it. But I do think
the reality is it might take us a few more
years to really work out where is the big varia
for New Zealanders from the deployment of this across our services.
Speaker 1 (08:20):
Right and you put the guidance in place, it's pretty
clear what you can and can't do is a shadow
AI as they call it.
Speaker 2 (08:26):
Is that an issue and government?
Speaker 1 (08:27):
Are you finding that public services are going, Oh, I'd
just rather use chat GPT to do this and is
that a risk?
Speaker 5 (08:33):
I think if we look at the things that we've
got in place, so we have a community of practice,
and so the community practice is quite tight around how
we want to responsibly use it. So a lot of
the guidance and frameworks about responsibility, we've got a lot
of effort in terms of the policy, the frameworks, the guidance.
Is it going to be instances of where people use
(08:55):
chet GBT probably in a home sense on data debts
just to do with their own private but in terms
of public sector, I think there's a lot of self
awareness around what you can and can't do. I think
also there's a lot of if it being made around
the different types of AI, and so it's not just
(09:16):
the chat GBT, So we know these machine learning there's
lots of different types of AI, and we're looking at
all types to just make sure that we've got the
right tools. We want to be agnostic of the tools.
We just want to make sure we use the right
AI for the right reasons.
Speaker 3 (09:33):
For myself, Petter, We've got Copilot within department term Affairs,
which obviously I'm based on use that a bit, but
I do use on my personal phone different AI tools
as well, and I must admit to occasionally asking them
a work question.
Speaker 4 (09:47):
It's not any private information or anything.
Speaker 3 (09:49):
Like that, so I guess that reflects that, you know,
we don't want to import all those tools into our
environment yet, but I'm still interested in how do they work,
how do I compare them myself. I think that just
it's again to technology in the infancy. We will get
to a point where there's an approved tool set across
the public sector at some point, but it's just moving.
The technology is moving so fast, and that's one of
the real insights we see is that it is just
(10:12):
so quick. I mean, where we are now a year
ago you wouldn't have expected to be and it will
be the same again in another year's time.
Speaker 2 (10:18):
In terms of the AI strategy.
Speaker 1 (10:19):
A bit of pushback from the business community and particularly
from the academic community. You'll have seen that the letter
from Andrew Linsen and others really saying, look, we urgently
need to address regulation, and that was something that in
the strategy. So we're going to use existing legislation, will
tweak if need be, but definitely nowhere near as aggressive
(10:41):
as for instance, at EU and even parts of the
US by state, you know, they're doing a lot of regulation.
What was your take on that feedback?
Speaker 3 (10:50):
Yeah, Look, it's a life debate, clearly without a doubt.
So that strategy has been led by NB where we
were involved, our advice is entirely consistent with the strategy landed.
So our focus is the public sector. We don't need
law to regulate the public sector. We can regulate them
through our guidance, through the framework we've put in place.
So in effect we are regulating public sector use right,
but just not through law in terms of wider regulation
(11:12):
across the economy in terms of statute, you know. Fascinatingly again,
we're in Singapore last week talking to half dozen countries.
The move there is to move away from regulation because
what the find is the technology is moving so quick
you just can't do it as a statute. It's going
to be much more effective to do it in rules
and guidance. Than it is baking it into statue, and
most countries actually do have underpinning legal frameworks around privacy,
(11:33):
around security that work pretty effectively for a range of
different technologies, so potentially a better wait and see as well.
Speaker 1 (11:39):
The other I think criticism is no mention of sovereign
AI and the effort to not necessarily build our own
large language model. It's hugely expensive, but having more autonomy
over our AI systems in New Zealand so it reflects
our culture and our priorities and not just be put
onto cloud and in a big tech a center I
(12:01):
guess more MB's sort of department by any views on that, No.
Speaker 3 (12:06):
It's almost ours because we think about the public sector.
So what does the public sector need in terms of
those services to retain sovereign? And for us and sovereign,
it's really about the confidence of the public, the trust
and resilience to know that they can continue to operate.
So that's what we need to be mindful of. Look,
our thinking at this point is the main thing we
need to do to retain sovereignty is probably to retain
(12:27):
flexibility and agility, so not getting locked down overly committed,
because again the technology is moving so.
Speaker 4 (12:34):
Quickly, it's evolving very rapidly.
Speaker 3 (12:37):
I think retaining flexibility and agility, so building capability, but
retaining the ability about a move to use different tool
sets to make good choice about what's the right tool
set for the right issue.
Speaker 4 (12:48):
That's where we keep.
Speaker 3 (12:49):
Our sovereignty for now, and then at some point maybe
we need to think about whether back there is something
a bit more in terms of buy or build, etc.
But at this stage, retaining flexibility and agility as where
we're focused.
Speaker 1 (13:01):
Flexibility and agility, I think is central to this cabinet
paper that's just been released that is really central to
what DIA does. Fascinating stuff here that outlines the problem
which we've known about for a while. Thirteen billion dollars
of largely unfunded commitments to ICT projects over the next
five years in New Zealand. So where's the money going
(13:22):
to come for all of these really important IT projects.
Speaker 2 (13:25):
It's not really sustainable.
Speaker 1 (13:27):
So presumably you took that case to the minister and
to Cabinet and said, look, we've got to do something
about this. What has been approved, what has been decided
that DIA is going to do about this.
Speaker 3 (13:38):
Look, I'm delighted to speak about this and I'll just
preface it, but then I'll hand over it to Miles,
and I think what it say is the problem that
we saw and talked to Cabinet was a couple of
parts to it.
Speaker 4 (13:48):
What is affordability.
Speaker 3 (13:49):
So the twelve to thirteen billion plan spend over four
to five years, which about two thirds is funded, but
there's a big chunk still not funded, but really underlying
issues fragmentation.
Speaker 4 (13:58):
So we are very.
Speaker 3 (13:59):
Highlyized as a public service. In our public services compared
to the world. We've been successful. Agencies have digitized, but
the digitized in a way that leads us very fragmented.
Every agency has got their own set up, their own systems,
their own applications, and their own points of connection with
a customer. So it's fragmented for New Zealanders as customers,
and it's fragmented in terms of the technology, and it's
(14:19):
extensive we think as a result. So that's the preface
and the problem of statement that we've talked to government
and we've made proposal about some things to be done differently,
and we're grateful that Cabinet supported that. Miles maybe touched
on the big things that we're into.
Speaker 5 (14:33):
Yeah, look, I think it's an exciting opportunity, and I
think falls just absolutely underline why we need to do it.
A couple of other things that the footprint is way
too big, way too expensive, and when we start looking
at streamlining services, we need to connect up a lot more.
So we are looking at a at a target state,
(14:55):
and the target state is about navigating agencies toward week
government need to be. And that's about how we reuse systems.
We get modular systems, smaller systems, we're a lot more
agile in terms of how we deliver those services, but
we leverage of things like digital public infrastructure where we
have reusable assets. So instead of agencies building everyone building
(15:19):
a payment system where we have one, we look at
digital identity and we'll talk about the government app.
Speaker 4 (15:25):
We'll have one or a government app.
Speaker 5 (15:27):
We'll have one wallet, we'll have one issuance platform, we'll
have common capability that agencies will build to and utilize.
And so the target state just gives that direction of
travel and just enables those architects to be able to
move those agencies in line with what a joined up
government looks like. There's great things around how we look
(15:50):
at centralized investment, centralized procurement, and the great thing there
is about how we can start aggregating procurement, getting better
price points, getting the economy as a scar that we
should be looking at how we purchase once at ensuring
we're directing the traffic around what agencies are looking to
(16:10):
procure moving forward, but also in align with the technology
that we need, so bespoke becomes something that doesn't happen,
but rather we go to what is common and the
outcome there is to ensure we've got a joined up government.
Speaker 1 (16:25):
So that's a five year target state that will be
evaluated and then set again. And interestingly you put in
an estimate here in the cabinet paper up to potentially
three billion dollars you think you can say by taking
this approach.
Speaker 2 (16:40):
In the next five years.
Speaker 1 (16:42):
So that is through the changes in procurement, avoiding duplication
in terms of new systems that are rolling out.
Speaker 5 (16:49):
Yeah, there's a number of things so we don't all
have to buy the same pieces of tech. We know
therese better price points, we know there's licensing and over
time we know that the cost is going to be
going down. We know there's some procurement that we don't need,
so there's a combination of things. So I think that
we'll reach the target over that five year period.
Speaker 4 (17:11):
At the moment, we've got a couple of proof points.
Speaker 3 (17:13):
This one is the All Government Common Capabilities Portfolio that
we support, So the billion dollars went through that last
year across the public sector and there's one hundred million
dollars in savings from that, so there's a ten percent
saving in our existing procurement processes. So stepping that up,
we can see the pathway to that. The best example
we've got at the moment is we started a programmer
work a couple of years ago where we realized twenty
(17:34):
three agencies we're looking to replace their finance systems over the.
Speaker 4 (17:36):
Next five years. It's got to be a better way.
Speaker 3 (17:39):
So spinning out of the IR transformation, we bought the
Common Process Model license for New Zealand off them, and
the endpoint for us will be a panel of half
a dozen providers providing not just finance, but the AIRP
solutions are all configured to a common process model, so
it's simplified and standardized across the public sector, and public
sector agencies will just select one of those, so we're
forecasting that's one hundred and sixty million dollars over eight years.
Speaker 4 (18:01):
Through that process, what.
Speaker 3 (18:03):
We realize is we can't do that point by point
across a different functionality. So it took us eighteen months
two years to get that going. We've got to get
to change the system rather than and this is what
the Cabinet paper and the proposals and there is, we've
got to step beyond going individual lines of functionality to
actually changing the system of how government works around digital
and that's what we're aiming for.
Speaker 1 (18:21):
There'll be a Chief Technology Officer role to oversee all
of this, which will be miles.
Speaker 5 (18:26):
Yeah, I'll come under the GCDO function. The advantage of
that is and look, this isn't the command control side.
This is more bringing the government together being very clear
on the digital state. And you do need that CTO
to make the call at the end of the day
on what technology we're wanting.
Speaker 2 (18:45):
We do need to.
Speaker 5 (18:46):
Make the calls to say, these are the finance systems,
this is how we're going to be joining up the government.
This is how we're going to be sharing data, This
is how we're going to be maintaining privacy. This is
where AI is going to be used, so that functionality,
that CTO role is extremely important to determine what the
digital state is.
Speaker 1 (19:04):
And good to see more provisions around accountability here. So
there will be KPIs for each Chief Executive or each
government department to monitor their progress in line with that
target state. So it's good to see the Minister will
have power of veto over projects talk us through. Was
that something you suggested to them?
Speaker 3 (19:24):
Yeah, it was so. Look, we do want to be
much more coordinated. I think multi put it really lovely.
They're pulling the family of government together, but we're not
going to be total centralized commanding control.
Speaker 4 (19:33):
The strength of the nesign.
Speaker 3 (19:34):
Public service is the agility of individual agencies. But the
moment agencies buy or build technology for themselves in their
own requirements and it doesn't all add up to work
for the public service as a whole orphan new zionder
So that's what we've got to change. So we need
agencies to not just buy a build for themselves, but
to buy a build for the public service. That's the
(19:54):
target state, and so we'll be guiding that, we'll be
setting the direction. But yeah, we need KPIs, we need
the accountabilities and if we get to the point where
there's a tension between agency requirements and system requirements, we
need the ability for ministers to be exercise a decision.
Speaker 1 (20:08):
How has this gone down anecdotally with you know, as
you've socialized this with chief executives and now some would
say it's a bit of a paragraph BYDIA. Personally, I
think it's it's absolutely What we need is that realization
that because their budgets are tight, they realize they can
afford what's in the pipeline.
Speaker 4 (20:27):
Yeah, look, that's exactly right.
Speaker 3 (20:29):
So I might talk about ceas and or hand to miles,
you can talk about some of the CEO as well.
So look, I think c's recognized now is the time,
that's the feedback we've got. So they've got questions about
exactly how it will work, and so do we, and
we're going to answer those questions with them. So I've
got a session tomorrow with a bunch of cees to
work this through. We've got to see you retreat on Friday.
We'll be talking about this as well. So you know,
(20:49):
we work quite collectively in the New Zealand and Public Service,
and that's in practice what we'll be doing. Of course,
the cees see the need for the public service to evolve.
They know both the fiscal position, so we have to
do something differently. But actually technology has evolved and changed
so that offers opportunities to do things differently too. So
I think there is a broad consensus that this is
the right direction, this is the right thing to do,
(21:12):
with a few questions about actually how will it work
or what will it mean? And that's our job over
the next three to six months is to build that
out with.
Speaker 2 (21:18):
Them, right and presumably miles.
Speaker 1 (21:20):
You know, if an agency has a real specific use
case for something and they go, look what you've got
on the off the shelf products set doesn't suit us,
just that they can still argue the case for that.
Speaker 5 (21:30):
Yeah, I think pragmatism is a thing that underpins this. Pragmatism.
Pragmatism pragmatism. The idea of the target state is to
give that line of direction, so right at the start
people know where there's going to be a little bit
of difficulty, and that's where we have the discussion. The
first thing is not bespoke, reusable, repeatable, common off the shelf,
(21:51):
don't build, so the market is full of good solutions there.
Let's use the market and this is where the private
sector plays a key role.
Speaker 4 (21:58):
Zeting plays a key role.
Speaker 5 (22:00):
Modular states play a key role, lower cost projects faster.
So we're looking at the paraalim ships quite a bit
here to support where we want to hit the target state.
So it'll be definitely, by exception, by some pretty in
depth discussion. If someone wants to go outside the target state,
there might be some specialist need. The tax system is specialist.
(22:22):
There are some certain health systems. But when you look
at a CRM, well, a CRM is a CRM. We
want to make sure we get a single view of
the customer. So let's make sure we consolidate the CRMs.
Let's make sure the finance systems operate to a gl.
Let's consolidate the finance systems. So there's just some pragmatic
(22:42):
things that we do in terms of the reference groups.
We have the CIO reference groups, we have deputy CE groups,
and I think the feedback in these is that it's
a natural conclusion in terms of joining up government. So
there's a lot of support, a lot of buy in.
The big agencies very keen on this, mainly because we
can leverage some of those existing investments as key things
(23:07):
that we can reuse and share. So there is a
lot of buy in and you know, there's a lot
of maturity when you look at some of the set
sees and the DC is there.
Speaker 4 (23:17):
So pregmatism, pregmantism, pregmatism, Yeah, I think mind just picking
on a point miles is almost mentioned.
Speaker 3 (23:21):
But just to be clear, we're not proposing that gcdo
buy and build everything, you know very much for seeing
ourselves as conductor of the orchestra, we're not the lead
violinist or so. Some of the big agencies will build
things or buy things, but they'll do it for the
public service, but under a clear picture that we've built.
Speaker 1 (23:41):
So yeah, and the idea of smaller, faster, more modular.
So you know, the proturement rules were updated. You know
that economic benefit clauses is very front and center and
near this expectation at New Zealand companies will get some
of that work. Presumably that's only going to increase the
lif theihood that I startups and our own tech companies
(24:03):
can get into the procurement.
Speaker 4 (24:05):
Yeah, definitely.
Speaker 3 (24:05):
Look, we've got pretty good uptake by New Zealand firms
already of our procurement. So in terms of gcdo organized
common capabilities, about fifty five percent ghost of New Zealand
firms already. And when you go to marketplace, which is
our key channel, which is away from if you like,
some of the big infrastructure provision, it's about three quarters
of the spin through their ghost to New Zealand firms.
So we've got good channels and market engagement already. But yes,
(24:28):
this modular, more itterative, smaller should create great opportunities for
innovation and the vendor market in New Zealand as well.
Speaker 4 (24:35):
In terms of the public service.
Speaker 1 (24:36):
And myles, it looks as though this approach has already
been factored into this all of Government app that is
under development to New Zealand companies Dave Clike and ZED
and Matter are currently building that tell us about what
you're trying to achieve with the all of Government app.
Speaker 5 (24:52):
Sure, so if we start at digital identity, I think
that's a great point and we're had a look at
the paradigm shifts, and the paradigm shifts are the citizen,
the customer wants to be in control of their data.
We know that we want to go to a decentralized
way of how we manage a digital identity. We know
the private sector plays a big role when we start
(25:13):
looking at AMIL CFT lowering the compliance burden. We know
when we approve a document the costs are quite high,
the compliance costs are quite lengthy. So we looked at
all of that and that's what's moved us to as
well as the modular approach. So we've got a program
of work which looks at in all the government app
to enable the customer to be able to navigate services
(25:36):
a lot more effectively. Imagine a time when you can
go through the app and you can proactively look at
the services that you're entitled to. Imagine a time when
you can get the notifications and messaging through your mobile app,
can store your credential in your wallet, and so we've
got a good pathway around where we want to take
the app. I think it's an exciting journey where we
(25:56):
start moving the government to operate how the citizen and
how the customer wants to navigate these services. I mean,
we see it every day in the private sector banking, insurance.
People want to operate on their terms and that's what
we're doing. We're looking at how we operate to support
them and their life event in terms of their event
(26:19):
using the private sector getting the innovation there. This is
what the whole work program is all about. This is
no longer just a government thing. So sort of two
elements to it.
Speaker 1 (26:27):
There's the app where literally every government department, your interaction
with them, you can keep an eye on that. It
could be me paying my GSD to IOD for instance,
it could be social developments, so that'll be there. But
then there's the identity verification and while it aspect, it
offered as well and you can keep a credential in
(26:49):
there and that ties into this framework that was passed
into legislation that has been in development for the last
couple of years which underpins all of that a safe
and secure way identifying yourself and verifying your ID without
having to go to a central database. It's all done
essentially on your.
Speaker 2 (27:07):
Device, that's right.
Speaker 5 (27:08):
And what we did accelerate the market on is with
the new Zealand Verify app. So the market when quite ready,
so we developed the verification app that's going to definitely
help things around hospitality industry.
Speaker 4 (27:19):
It's going to help a number.
Speaker 5 (27:20):
Of different things The other thing that underpins it is
the international standards, so we know that cross jurisdictional work
is absolutely key. So when an international driver's license comes through,
we know we'll be.
Speaker 4 (27:32):
Able to verify it.
Speaker 5 (27:33):
So we're well advanced around, not only locally but internationally
as well.
Speaker 1 (27:37):
And Paul, so where are we at in the timeframe
on the ail of government app when you're likely to
see that launched?
Speaker 3 (27:44):
We make a good progress, I think keep an eye
on social media. I think you'll see Minister Collins demonstrating
talking about this over the.
Speaker 4 (27:50):
Next week or two about where we're up to, so
we'll have something built invisible by the end of the year.
Speaker 3 (27:56):
I think they're kind of migrating services to it will
take a bit more time. So whatever pipeline is services,
and I think it should be clear as well, we're
not planning to put all government services on one. Actually,
we don't think that's going to suit all New Zealanders.
So I think the app will work well for the
less complex, the more transactional services and the kind of
migration of certizens that we'll have to look at where
(28:17):
agency that are up to in terms of their renewal
cycle and their transformation processes as well, So we will
be building functionality in it over a period of time.
And what we really want to get to is feedback
groups from customers tope. So rather than just building it
and placing it out there in a monoethic way, actually
build it literated, start to join services up. See what
the feedback we can pick up from the customer interaction
(28:37):
with it is, what's working? What do we need to redesign?
So we want to see this more, if you like,
over time start to evolve further, and we're quite excited because.
Speaker 4 (28:46):
We're not entirely sure where it will get to it
in some.
Speaker 3 (28:48):
Way, but we do expect to see other channels maintain
and still to develop other channels as well. It won't
just be the single place for customers to go.
Speaker 1 (28:55):
To, and the digital identity framework underpinning it can be
lies by private organizations Totland as well.
Speaker 2 (29:02):
So how is that going?
Speaker 1 (29:04):
What's been the appetite to get accredited to be part
of that?
Speaker 3 (29:07):
Starting to really pick up momentum. We think over the
next twelve to eighteen months we'll get lots of interests.
Two great use cases for me. One is we've got
digital driver's licenses and Queensland. Now we'll have Queensland is
tuning up to a rental car company in New Zealand
with their digital driver's license. So that's the Verify app
that Males talked about. That will enable New Zealand businesses
to recognize and acknowledge an international digital driver's license. The
(29:28):
other use cases my young adult children wondering around town
with their passports on a Saturday night proven how old
are to get into the pub's terrifies men that carry
their passport around it. In the future, what they're about
to do is have their phone, which they never without,
and on their phone will be their proof of age
and their wallet, and they won't have to disclose where
they live, their middle name, everything that they can just
(29:49):
simply show who they are and how old they are.
And that's the power of that. And so I think
we'll see real interests from the private sector. We're actually
moles and I were invited to meet with the banker's
associate a couple of weeks ago, so seventy to eighteen
banks from across the country there took about digital identity.
So there is quite a lot of appetite in the
private sector and over the next twelve to two ten months,
(30:10):
I think the Zanders will start to see what that
looks like and see.
Speaker 2 (30:13):
A real impact and miles.
Speaker 1 (30:14):
Eventually, I guess this would replace real me which people
are using to apply for a passport, things like that
renewer passport online.
Speaker 4 (30:21):
Yeah.
Speaker 5 (30:21):
I think there's a moderate approach that we're looking to take,
so there'll be less reliance in terms of some of
the existing functionality. And as we move to the wallet,
that's where the movement for the credential will actually be.
Speaker 1 (30:35):
And you're talking about overseas driver's license in Queensland and
being able to show your driver's license on your phone,
So I guess the foundations are there to roll.
Speaker 2 (30:45):
That out for our own driver's licenses.
Speaker 5 (30:47):
That's the plan, and we definitely want to put as
many credentials in there. We could be certifications, it could
be a number of different things, so we'll have a
pipeline of activity.
Speaker 1 (30:57):
So potentially you know, in future a few a university
student for instance, and you've done a degree, so you
could have that credential in there.
Speaker 4 (31:07):
We want to credentialize everything. Yeah, so.
Speaker 3 (31:10):
We love the educational achievements to identity, proof of income,
your bank account, credentials that come from public sector and
private sector. For the New Zealand's are better carrying their
while and use when they need them as opposed to
getting on a call center and asking for a bit
of information to be emailed to them, which is actually
their information already.
Speaker 1 (31:28):
And look, this is going on around the world in
different ways. Australia's put a big amount of investment into
this and it's really perminent over there because of the
legislative changes they're making around age verification for websites that's
fast approaching December tenth. They want to have that system
in place for social media networks, you know the under
(31:49):
sixteen ban.
Speaker 2 (31:50):
You're also looking at.
Speaker 1 (31:51):
It for search engines, verifying your age when you log
into a search engine so you can't just search all
random violence and pornography and the line. And for adult
websites coming next year as well. We've seen that in
the UK several US states. That has been broached here
in parliament a member's bill. So is that something you
envisage if parliamentarians decide that's the way we want to
(32:14):
go In New Zealand, this is a system that could
in that age verification totally.
Speaker 3 (32:18):
The technology will enable that. So and you're quite right.
I mean there's a select but inquiry running at the moment.
Ministry of Education is leading some work. So government is
currently contemplating and they'll make some decision whether they want
to do it or not. And if they decide they
want to do it, then we'll make sure that there's
the enabling technology in place and able to support that.
Speaker 1 (32:34):
So, in terms of miles of the future of governments
and how the experience is going to change for a consumer,
I think people will love the convenience of being able
to open an app, even if it's only a subset
of government departments, if it's the ones that are really
pregnent to your life and keeping on top of your
personal admin, they love that. There will be because I
(32:57):
see you know, the Social Investment Agency is involved with this.
This as part of the data leadership for digital service
delivery that you're involved in and stewarding. They will have
input into that. A lot of people will be thinking
they're putting on my data in one place to surveil me.
So what do you say to people who have that concern?
Speaker 5 (33:16):
I think if we look at what underpins all of
this We know that a lot of jurisdictions have done
a lot of things.
Speaker 4 (33:21):
There's been a lot of challenges, and.
Speaker 5 (33:23):
What we want to do is left for off the challenges,
not reinvent anything, not trying to look at being the
most leading edge in terms of that, we're making it up.
So we're looking at leapfrogging and making sure we're learning
from the challenges. This isn't about a big brother thing.
This is about establishing what we've got now. It's respecting
the privacy. It's making sure that the citizen, the customer
(33:47):
is in control of their data. What they do with
it will be managed through the digital identity side, and
it puts the person into power of their data. And
that's the underlying principles of what we're aiming here.
Speaker 3 (34:00):
I mean, we certainly won't be able to monitor the
app in the sense of course we'll see where there's
a transaction point and a customer, but actually what people
are choosing to hold in their wallet, it's their information.
We weren't not going to look into their phone or
anything like that, so there'll be no surveillance. The reference
to Sia and the Chinet paper is really about they've
got a mandate to look at an investment approach across government.
They need information to better be pulled together and exchanged.
(34:22):
We need information to be able to be pulled together
in exchange to enable customers to access services.
Speaker 4 (34:26):
And the question is we.
Speaker 3 (34:28):
Probably don't need two competing forms of infrastructure to enable
that to happen. So we're to the interest a line
that when we think about the digital infrastructure and the
data standards, an approach that enable data to move around
the public sector, how do we do that together from
our perspective with customer consent in a privacy and secure way.
For SIA, I'm sure they'll be focused on those things too,
(34:48):
but for a different purpose.
Speaker 4 (34:49):
So just where we work together.
Speaker 1 (34:51):
And as you point out in the paper, Singapore, Estonia
in particularly has been a leader and centralizing this sort
of thing, and it has paid divid for those sort
of small advanced economies, isn't it.
Speaker 4 (35:02):
Yeah, definitely.
Speaker 3 (35:03):
Again, they were in Singapore with us last week, so
we've definitely been learning from them and I think the
Estonian's amazing what they've done. But we probably wouldn't just
build one thing again in the setup of our public
service and services, and so we might have multiple data
exchange infrastructure across different sectors, for example, the social sector
and the environment sector for lots of good reasons. But
(35:25):
we can still learn from them about how they've done
it in terms of how we might then do it.
Speaker 1 (35:29):
Yeah, well, a lot going on, some really positive changes happening,
and I think changes out hopefully would whether any change
of government as well. You get the sense that there
is bipartisan support for what you've proposed.
Speaker 4 (35:43):
Here, Yeah, certainly. I mean in the role.
Speaker 3 (35:45):
While I've been in the role, I've worked under both
Labour led administrations and national administrations and there has not
been a significant difference in terms of underlying approach. It's
really just been focused on speed and if we digitize things,
that should enable governments to make their policy choices more easy,
so that they should all sport digitalization and then they
can make the different passage choices across that. So as
(36:05):
we start to thinking about what services we pull together,
how we offer.
Speaker 4 (36:08):
Them in different ways.
Speaker 3 (36:09):
Different governments might prioritize different services, whether it's services for
businesses or services in the social sector, but the underpinning
digital should be agnostic of both of those people and
costing us a lot less fingers crossed.
Speaker 1 (36:22):
Yes, Paul Miles, thanks so much for coming on the
Business of Tech and good luck for all this change
that's underway.
Speaker 4 (36:29):
Core. Thanks be always a pleasure, So thanks to.
Speaker 1 (36:37):
Paul James and Miles Ward for talking through some of
the changes that are coming to IT, procurement and government.
Since I recorded this episode, there's been some interesting feedback
to the cabinet paper, which I'll link to in the
show notes. Some good discussion on my LinkedIn post about this,
people positive about it, but also pointing out the risks
of a one size fits all approach to IT systems
(37:00):
and services, which is a valid concern.
Speaker 2 (37:03):
As Paul and Miles pointed out.
Speaker 1 (37:06):
Is still scope for agencies to argue the case for
particular technologies. You know. It's really aimed at the stuff
that's common to every department, customer relationship management, software, Hayroll,
enterprise resource planning. The duplication around some of this stuff
in recent years has been mind boggling. Ben Read, a
(37:26):
regular guest on the Business of Tech, posed a couple
of interesting questions which I didn't get to in the
interview other than talking about the AI sovereignty issues, but
I'll follow up with DIA on them. For instance, he
asked how much IT procurement going forward will mandate open
source and data portability rather than proprietary and locked in
(37:46):
platforms and applications. And what about the all of government
IT architecture underpinning all of this is a fully open
common API or application programming interface to all of government
services even been considered in all of this.
Speaker 2 (38:02):
Really good questions here from Ben.
Speaker 1 (38:04):
Let me know what you think of the tech procurement shakeup.
Will it unlock innovation and improve digital services whilst saving
us money? Or is it potentially creating a new set
of headaches for us?
Speaker 2 (38:14):
Get in touch.
Speaker 1 (38:15):
You'll find me on LinkedIn or email me. I'm on
Peter at Petergriffin dot co dot m Z. That's it
for this episode. Thanks for tuning in. Catch you next
week on iHeartRadio or via your favorite podcast app with
another episode of the Business of Tech.
Speaker 2 (38:30):
Till then, have a great week.
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