Sunday, 21 October 2012 - 10:42am

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Published by Matthew Davidson on Sun, 21/10/2012 - 10:42am

A friend asked what I thought of the Council's initiative to look into the possibility of outsourcing services, particularly IT services, from outside the Coffs Local Government Area. Here's my typically long-winded response:

There are a couple of big issues here. On the more general one - of council cost-cutting via outsourcing to businesses based outside the Coffs LGA, I can't imagine how this would be anything but a very bad idea.

The justification for such policies is often by inappropriate and misleading analogy to business or (worse) household management. Of course government isn't a business. A business is run for the benefit of it's owners on a "one dollar (or share), one vote" basis. Family households are run, if memory serves, as a "Because I said so, that's why!" dictatorship. A government has obligations to all of it's citizens (or residents) equally, as well as to other levels of government, and external interests via inter-governmental agreements. Try running a business like that, and you'll get the sack.

People who make these analogies are arguing that just as business or household debt or deficits are to be avoided, so governments should never accumulate debt or run deficits. This idea has an immediate appeal, which evaporates after a moment's consideration. Anybody arguing that businesses or households should never go into debt, or at any time spend more than they earn would immediately be dismissed as a crackpot. Indeed more celebrated and conservative thinkers than yours truly have called the failure of governments to deficit spend during times of economic crisis like our present one "economic suicide" and "just insane".

There is I think a significant parallel between the failure of governments elsewhere in the world to apply the lessons of the 1930s depression to our current one, and the Coffs council, after losing money in financial speculation with Lehman Brothers no less, considering likewise "punishing the victims" by exporting jobs from a region which even in good times has traditionally suffered one of the highest rates of unemployment in the country. That a tinpot influence peddler like Keith should thereby seek to retain, and even enlarge, his discretion to dispense largesse from the community's coffers to favoured mates, while the community's "most valuable asset, its human capital, is being wasted and even destroyed" is nothing short of scandalous.

In the specific case of software services which, as you correctly observe, appear to constitute the bulk of Civica's products, the case for outsourcing is perhaps weaker than in any other domain. Here we have an industry where the only barrier to entry is possession of a computer, an Internet connection, and a bit of expertise; and the product is something pretty much everybody uses (whether they know it or not); and there is no chance we'll be using any less of it any time soon. If a council is looking to support local industry, the fruit doesn't hang any lower than this.

When shopping for software systems (the issues in the case of hardware are broadly similar but a bit more complex), governments (or indeed any organisation or individual) should ask the following two questions:

(In the case of Civica, cursory investigation turns up no evidence that the answer for both these questions is anything other than "no" for all their products. In fact their website contains no technical information about any of their products, beyond the promise that their National Sales Team can provide more information, which should ring alarm bells.)

If the software that council uses is free software, support for the software, including bugfixes, improvements, and customisation can in principle be provided in-house, or from any software developer willing to take on the job. Even if the initial provision of the software is contracted out to a non-local business, this does not preclude the future in-house or other local provision of services related to the software. In the case of non-free (or "proprietary") software, the only party entitled to offer these services (or at most to extend this entitlement to approved business partners) is the copyright holder of the software. This leads to - at best - monopoly pricing, or - at worst - users stuck with software that can't be fixed, improved, or customised to suit their needs if it is not in the business interests of the copyright holder to offer such services.

The only way to remedy this state of affairs is to switch to another software package. Hopefully by then you will have learnt your lesson and be switching to free software, but either way the process will likely be expensive. It will be worse still if the data can't be extracted from the old system in some readily decodable open standard format. In this case you've not only got the sunk cost of the now useless software you originally acquired, but all the time and money you've spent entering data into that software has also gone down the drain. It's a rare proprietary software vendor who doesn't hold their users hostage like this.

A large and increasing number of governments around the world have been adopting free software systems for many years now, and a review of these projects would in my opinion be more productive than Keith's junket. This document is a good place to start, although it's rather dated and a good many high-profile government free software migrations have kicked off since, most recently a plan by the French government.

There are also many people in Australia much more qualified than I to speak to on this topic, top of the list would be Pia Waugh, who's been working in this area for years.