ATO ‘Big Data’ Strategic Sourcing Project

October 2014 – March 2015

Rethinking the ATO’s traditional procurement process suitable for leading edge technology in ‘big data’.

Significance

The project was significant because of its strategic importance to the agency, leading edge technology, research and development laboratory and agile methodology.

Strategic importance: The Smarter Data Program was one of the ATO’s six strategic priorities set out in is Strategic Blueprint 2014-2018. There project had significant interest and involvement from the organisation’s most senior executives and there was a lot to be achieved in a short period of time.

Leading edge technology: The project involved early investment by a government agency into enterprise ‘big data’ architecture, tools and processes at the leading edge of technology in an emerging but relatively immature field.

R&D laboratory: The projects utilised a custom research and development laboratory to support rapid analysis and data-driven evidence-based decision making; allowing the opportunity to rapidly deploy and evaluate new technology in a period of days, not months.

Overview

The Australian Taxation Office’s 5 year Strategic Blueprint called out six strategic priorities to reinvent the ATO.

One of the six strategic priorities is the Smarter Data Program to use data in a smarter way to improve decisions, services and compliance. The Smarter Data Program includes an enterprise data hub, online analytics, high performance analytics and a data research and development laboratory.

The ATO knew that it needed to source data analytics services, tools and product as part of the Smarter Data Program, but fulfilling each requirement through a separate procurement would not provide the results required given the pace of the reinvention program and the leading edge ‘big data’ technologies needed to meet the aims of the program.

Services

The ATO engaged Proximity to develop a strategic sourcing strategy that achieved the ATO’s objectives: flexible, practical, rapid, compliant, and suitable for the fragmented and immature ‘big data’ market.

Proximity developed a strategic sourcing strategy that covered the process from eliciting big data project ideas through to deal completion and contract management. The ATO realised the need for a strategic sourcing framework that was different to its prevailing procurement strategy and gave Proximity free reign to propose an alternate strategy that would provide the best possible outcomes for the Smarter Data Program while still remaining compliant with applicable laws and policies.

The strategic sourcing strategy that Proximity developed included a number of new initiatives not previously used by the ATO.

Approach

Proximity’s approach involved completely rethinking the traditional procurement process that had been previously used by the ATO. We worked closely with the ATO’s Procure2Pay team and Corporate Analytics Branch to develop a new approach for the strategic sourcing of the ATO’s data analytics requirements – from ideation to implementation.

We considered new communications methods to reach out to potential suppliers from international IT start-ups to the ATO’s incumbent IT providers. We thought carefully about ways to reduce the burden on industry in participating. We considered how projects could be analysed on a fast to fail, fast to succeed model using a data analytics research and development laboratory. We embraced technology in the process including replacing standard industry briefings with webinars and exploring IT management platforms for the multi-use list.

With the strategic sourcing strategy successfully delivered and signed off Proximity then assisted the ATO with implementing the strategy, including establishing the data analytics multi use list. Proximity Senior Advisor Irene Ghobreal worked onsite at the ATO’s offices so that we could be embedded with the team and achieve the ATO’s tight timeframes, with other Proximity staff assisting remotely when there were peaks in workload. At the completion of the implementation work, Proximity provided the ATO with a user guide with detailed instructions on how to manage data analytics sourcing and the multi-use list going forwards.

Proximity’s approach included an end-to-end managed service, with strategy, implementation, evaluation, contract drafting and probity all being provided by Proximity.   

The outcome

Proximity’s assistance resulted in the following achievements:

• a strategic sourcing strategy that addressed the ATO’s requirements of flexibility, speed to market and compliance and accommodated proprietary and open source tools, traditional and non-traditional suppliers, procurement and non-procurement sourcing options, and reduced capital expenditure
• one page decision tree and guidance notes for use by senior executive and project staff when applying the strategic sourcing strategy
• successful establishment of a data analytics multi use list
• creation of a research and development laboratory participation agreement a foundation (including an Enterprise Data Hub) that allows the ATO to succeed on its strategic priority to use data in a smarter way to improve decisions, services and compliance
• delivery of the services on time (despite the ATO’s compressed timeframes) and on budget.

The strategic sourcing strategy that Proximity developed included a number of new initiatives not previously used by the ATO. Some key aspects of the strategic sourcing strategy included:

• Process for considering both procurement and non‑procurement options such as community involvement, govhack, shared outcomes grants, competitions, in-house development, and research weeks
• The establishment of a data analytics multi-use list
• The incorporation of a research and development laboratory testing process to avoid the too big to fail projects of years past
• A mutual recognition framework that would allow suppliers already approved by other government
• Agencies to similar panels to be appointed to the ATO’s data analytics multi-use list without a complete separate submission
• An unsolicited proposals framework
• Mechanisms for property evaluating open source software alternatives against proprietary software
• A wide range of price and payment options including target cost incentive pain share gain