Digital Government in Australia

1. Assessment and recommendations

Abstract

This chapter presents an assessment the maturity of the Australian Government’s Digital and ICT Investment Oversight Framework (IOF) across its six states: Strategic Planning, Prioritisation, Contestability, Assurance, Sourcing and Operations. Based on this – and the OECD’s Digital Government Investment Framework – the chapter also includes recommendations on how the IOF could evolve to ensure that it remains relevant and continues to support the Australian Government’s digital transformation.

Overall assessment

Government spending on digital and ICT is projected to grow by 8.4% annually between 2024 and 2027, building on the acceleration of digital transformation triggered by the COVID-19 pandemic. This growth is driven by ongoing fiscal pressures, increasing public demand for digital services, and the rapid evolution of technologies such as artificial intelligence (AI). To ensure these investments deliver value, governments need a cohesive, whole-of-government approach aligned with national strategies and broader policy goals. The OECD’s Digital Government Investment Framework supports this by guiding strategic planning, implementation, and oversight – enabling better outcomes, risk management, and return on investment. This approach ensures more cohesive, consistent, and impactful investment in the digital transformation of government, as opposed to fragmented approaches that might otherwise lead to higher costs, lack of alignment with strategic and policy objectives, and an inefficient and ineffective public administration.

The Australian Government's Digital and ICT Investment Oversight Framework (IOF) offers a comprehensive approach to overseeing digital and ICT investments across the government. Through the IOF, the Digital Transformation Agency (DTA) assists the Australian Government in the planning, execution, and benefit realisation of these investments. It aligns with the OECD’s framework by providing agencies with robust processes, policies, and tools to ensure consistent and effective management throughout the investment lifecycle.

Based on six different functions – referred to as ‘states’ – that cover the entire project lifecycle, the IOF supports the Australian Government in planning, implementing, and successfully delivering digital and ICT investments. In the lead up to the budget, the Strategic Planning state identifies long-term investment opportunities, while Prioritisation is used to score and rank proposals based on alignment with government objectives, and Contestability ensures that proposals going to the Cabinet for funding are robust. Moving into implementation, Assurance focuses on successful delivery with tailored oversight measures, while Sourcing ensures value-for-money through dynamic purchasing and framework agreements. Across the investment lifecycle, Operations collects data to inform decision making and monitor digital and ICT investments across the public administration. This comprehensive approach ensures that investments deliver intended benefits and value for money, supporting the government's strategic and policy objectives – including with the Data and Digital Government Strategy (DDGS) and Australian Government Architecture (AGA).

In the 2023 iteration of the DGI, the Australian Government scored 67% for its overall approach to managing digital government investments, compared to the OECD average of 52%. However, the Australian Government scores consistently higher than the OECD average on 15 out of the total 20 metrics, with only the metrics related to having a GovTech function – a dedicated approach for fostering collaboration between the public, private and other sectors on innovative digital solutions – not providing any scores towards its overall total. The DGI also does not score the integration of these investment practices across a project’s lifecycle, which is where the true strength of the IOF lies. The OECD therefore considers the Australian Government to perform as a leader amongst the OECD on the topic of digital government investments.

While the IOF is a robust model for managing digital and ICT investments, the DTA could improve its efficiency and users’ experience with greater integration between the states, better data flows, and relationship management across the investment lifecycle. The iterative development of the IOF has resulted in some siloed processes and manual data entry that introduce points of friction for internal and external users, including with requests for the same information across different states and internal staff having a limited view of the DTA’s interactions with agencies across the IOF. However, there are efforts underway to address this through the implementation of the Integrated Data Platform (IDP) – a case management solution that will help to provide a ‘single view of the customer’. With the right relationship management to support it, this should help bring together the different states of the IOF.

Additionally, there is scope to bolster DTA's role as a strategic partner for digital and ICT investments by assessing proposal feasibility, fostering innovation, and offering diverse funding options. Improvements could be made in project feasibility assessment, creating pathways for urgent projects, and using agile GovTech collaborations to pilot digital projects. Here, the Australian Government could use the OECD GovTech Policy Framework as guide, as well as examples from other OECD Member countries in using GovTech labs to bring agencies together with other sectors to collaborate on innovative digital solutions to key public sector challenges.

Strategic planning

The Strategic Planning state supports the Australian Government in defining its digital and ICT investment portfolio and future objectives, as well as in identifying capability gaps. This state enables the Government to shape cohesive, future-focused digital and ICT investments by aligning agency initiatives with national priorities. Through early engagement, the DTA supports strategic alignment, resource optimisation, and informed decision-making, strengthening whole-of-government planning and enhancing the delivery of seamless digital services.

The Strategic Planning state has matured with the DDGS, providing a clear direction for how agencies align their digital investments to the Government’s strategic objectives. The AGA also introduces a common language for these investments, enhancing proposal development and cost-effective solutions, as well as a means a track and measure investments against a defined architecture.

The introduction of mandatory Digital Investment Plans to capture agencies’ investment pipelines should enable stronger horizon planning and better funding decisions. This includes efforts to identify opportunities for shared or common solutions, points of high demand for technologies and resources, potential gaps in workforce capability, and to identify key legacy systems that will need to be replaced or upgraded. However, internal and external stakeholders highlighted opportunities for the state to have stronger linkages with strategic workforce planning across government and supply chain management, as well as more evidence-based monitoring of the DDGS to understand how investments are helping to deliver on the strategic missions and provide greater value to people and businesses.

Prioritisation

The Prioritisation state prioritises, plans and advises on the digital or ICT proposals that are being developed. This state informs the Government’s decision-making on the investment pipeline for digital and ICT investments, with upcoming proposals being scored against a set of criteria by an evaluation group made up of representatives from the DTA and portfolio or key delivery agencies across the public administration. This prioritisation then feeds into advice provided to the Government to help identify which proposals would represent strategic, high-impact funding decisions aligned with long-term priorities.

The Prioritisation state has matured with refined tools and processes, delivering stronger data-driven insights and encouraging early engagement that can result in better developed proposals. It provides quality data for decision making, aligning with the DDGS. The process is transparent and repeatable, building confidence among agencies. This has positioned the DTA as a trusted advisor to the Government, offering valuable insights early in the budget cycle.

However, this state could play a stronger role in deciding which investment proposals can come forward in a budget cycle, as well as in addressing the risk of legacy ICT systems that need to be upgraded or replaced. Additionally, internal stakeholders raised that there needs to be greater focus or weighting given to feasibility and readiness in the ranking of proposals.

Contestability

Contestability focuses on the assessment of proposals that are coming forward in a budget process based on their strength and alignment with the Government’s policy and strategic priorities. Contestability ensures only well-developed digital proposals are recommended for funding. Through rigorous assessment and clear advice to Government, the DTA helps strengthen business cases and supports Budget decisions, promoting value, policy compliance, and delivery readiness across high-cost and high-risk digital investments.

This state excels in providing robust, evidence-based advice to the Government, with clear processes to assess proposals, identify areas of concern, and to work with agencies to address them. It is respected for its role in the budget process and trusted for its transparent advice. The state can also recommend options to help reduce overall delivery risks, including the use of quarantined funding whereby the release of funding throughout implementation is tied to the successful delivery of key milestones. This approach helps mature proposals' feasibility and implementation, benefiting agencies that have not had an opportunity to fully explore the complexities of their projects prior to their proposals being considered during the budget process.

However, internal and external stakeholders highlighted that urgent and unforeseen proposals still present a significant challenge for the Contestability state, which may not be able to thoroughly assess proposals during peak periods in the lead-up to budget decisions. In addition to the use of existing mechanisms to stage delivery – such as quarantine funding – stakeholders suggested that there could benefit from different assessment pathways and ‘offramps’ for these proposals. Internal stakeholders also identified limited consultation on the development of policy requirements and their integration into the IOF, as well as gaps in the expert technical analysis of solutions at this stage of the budget process. Finally, findings from the 2023 OECD Digital Government Index highlighted an opportunity to consider the specific environmental risk and impact of digital and ICT investments.

Assurance

Assurance, a post-budget state of the IOF, ensures timely, cost-effective delivery of digital and ICT investments to ensure that they realise their intended benefits. This is achieved by working with agencies to develop and implement governance arrangements for the delivery of projects that are tailored to their strategic importance and risk profile, as well as in monitoring the progress of digital and ICT projects across government to determine whether they are on track to deliver on their intended outcomes.

The Assurance state excels in monitoring and reporting to provide delivery confidence and identify at-risk projects early, including recommending course-correction or enacting escalation protocols to ensure their successful delivery. This state ensures benefits realisation by monitoring expected outcomes throughout project delivery. Biannual reports provide high-quality data to inform future investments. Escalation protocols, such as Remediation Plans and Independent Health Checks, help address delivery challenges. This comprehensive approach assists investments deliver intended benefits and builds confidence in future digital and ICT projects.

However, internal stakeholders reported challenges in getting timely and meaningful reporting from agencies before projects are considered at risk. This emphasises the need for the Assurance state to operate as a genuinely supportive mechanism, with agency and project-level incentives supporting early intervention and constructive engagement. Additionally, they identified opportunities for a more proactive monitoring regime with automated data ingestion, piloting solutions, and root-cause analysis of delivery issues. Finally, it was highlighted that resourcing restraints limited the use of escalation protocols to support in-flight projects that are at risk.

Sourcing

The Sourcing state supports the implementation of digital and ICT investments through various dynamic purchasing systems and framework agreements – referred to in the Australian context as Marketplace panels and Single Seller Arrangements –together with the DTA’s BuyICT procurement platform and Digital Sourcing Lifecycle to enable better procurement outcomes. The Marketplace panels consolidate digital and ICT procurement on one, easy-to-use digital platform to allow end-to-end procurement processes on the platform, while the Single Seller Arrangement are whole-of-government contracts that aggregate the spend across government to achieve greater value and better terms and conditions with key vendors. Together, these procurement initiatives work to simplify processes, improve procurement behaviours, and deliver value-for-money.

The state excels in aggregating the purchasing power of government to drive more efficient ICT outcomes across agencies and address key policy objectives, such as the participation of Indigenous-owned and small-to-medium businesses, sustainability, and AI adoption. Sourcing also provides key market insights and works to build procurement capability across the public administration and private sector.

However, both external and internal stakeholders highlighted an opportunity for stronger integration with Strategic Planning and Prioritisation on horizon scanning to understand demand. Additionally, the Sourcing state is limited as not all digital and ICT projects use the DTA’s procurement arrangements when approaching the market. Moreover, there is no mechanism to track investment proposals through to contracting. Finally, the 2023 DGI highlighted the opportunity for Australia to have a dedicated GovTech function as mechanism of innovative procurement to foster greater collaboration between the public, private and other sectors on innovative digital solutions.

Operations

The Operations state covers the entire lifecycle of digital or ICT investments, providing vital data and technical foundations to enable the IOF. It supports whole-of-government digital investment by collecting and analysing data to inform strategic decision-making, guide policy, and identify emerging technologies. It strengthens system integration, workforce planning, and investment oversight—enabling the state to improve delivery confidence, optimise resource use, and enhance digital capability across agencies.

The state uses the Australian Government Architecture (AGA) as a foundation for digital and ICT systems to collect meaningful data for better insights. The AGA provides a common language for investments, while consistent data collection identifies trends and informs decision-making.

In addition, the state is also working internally to develop the Integrated Data Platform that IDP aims to streamline processes, improve relationship management, and enhance user experience by minimising data entry and connecting data across states, ensuring a cohesive and modernised operation.

However, there was a view amongst internal stakeholders that the Operations state is more of a technical enabler of the IOF than a specific function related to the development and delivery of digital and ICT investments. Additionally, there was uncertainty around the overlap of the Operations and Strategic Planning states – particularly with regard to responsibility for the AGA and with considerations of legacy systems and new capabilities that are being assessed as part of the investment plans and horizon scanning. Based on the insights from stakeholders, the state could help advance the use of innovative technologies across the public administration, building on the work already done in its recent whole-of-government pilot on the use of AI in the public administration.

Policy recommendations

Based on this assessment, the Australian Government could consider the following actions to further develop the IOF: 

In the short term: 

1. Improve the integration among the states of the IOF to support stronger decision making and a better user experience, including by:

a. continuing to streamline IOF processes, minimise requirements on agencies to provide data across the IOF, and modernise the IOF’s use of technology.

b. finalising the implementation of the Integrated Data Platform (IDP) to improve data flows and the management of agencies’ interactions throughout the IOF.

c. strengthening relationship management with public institutions going through the IOF, which could be delivered through the Operations state to provide more proactive engagement and guidance for agencies across the states and a seamless experience.

2. Bolster the strategic planning and prioritisation of proposals that come forward as part of the budget process, including by:

a. finalising the implementation of mandatory institutional Digital Investment Plans for better horizon planning and funding decisions.

b. applying greater weighting in prioritising proposals based on public institutions’ current delivery capacity, past delivery performance, social and environmental impact and a defined strategic and technical institutional roadmap for digital investments.

c. providing a whole-of-government view of the risks posed by legacy systems as well as leading collaboration on how to address these risks across government.

d. providing a whole-of-government view of key areas of supply and demand in the market that may affect the delivery of digital and ICT projects.

In the medium term: 

3. Strengthen the assessment of digital and ICT proposals in the Contestability state, by:

a. refining processes for urgent and unforeseen proposals and developing different assessment pathways based on different classes of investment based on their strategic importance, size, and risk profile.

b. developing clearly defined metrics and detailed requirements in advance for using new policies to assess investment proposals.

c. uplifting digital talent and skills for deeper analysis in specialist areas – such as technical risk, environmental risk, data management and integration, and project delivery – either by building in-house technical capability or ensuring that expertise from different policy domains across the public administration can be harnessed to support the assessment of investment proposals.

4. Strengthen the role of the Assurance state in securing the successful delivery of digital and ICT projects by:

a. conducting more root-cause analysis of delivery issues that arise when implementing investments.

b. securing more sustainable funding for the escalation protocol for the Independent Health Check.

c. building a more proactive monitoring approach, with automated data ingestion from more diverse sources – including by finalising the implementation of the Project Data Reporting Standard – enhancing the reporting on the status of projects and involving the DTA in assurance of demos or pilots early in the delivery stages of digital and ICT investments.

5. Expand the role of Sourcing to more closely integrate it into the IOF, including by:

a. improving data flows with Strategic Planning, Prioritisation, Contestability, and Assurance, including with horizon-planning that is happening in other states to understand demand and emerging priorities to inform the future of procurement arrangements.

b. considering how to create linkages in the Sourcing state for procurements outside of the DTA’s procurement arrangements, including in the reporting of approaches-to-market and contracts published on AusTender.

In the long term: 

6. Introduce more innovative practices to assess the feasibility of digital and ICT proposals and to promote more agile project delivery by:

a. establishing funds within the Australian Government to explore the feasibility of or pilot innovative digital solutions, which could then be developed and scaled.

b. exploring GovTech collaborations foster innovation, increase the role of strategic sourcing of digital and ICT solutions in the IOF, and open more opportunities for the market to collaborate with government – especially the Indigenous-owned and small-to-medium business for which the Australian Government is encouraging more equitable procurement practices.