Hold the Line

If McLeod Governance were to be given a dollar for every time that they have undertaken an audit when the value to be had from a major telecommunication contract has been reviewed … well … it is fair to say that we would be considerably richer than we presently are.

And it is within that context that a report recently released by the Auditor General of the Australian state of New South Wales caught our attention.

The audit examined six agencies to assess whether the government was getting value for money from its telecommunications contracts.

Alas the answer wasn’t strong in the affirmative:

Only one agency could demonstrate that it was getting value for money from its telecommunications contract negotiations.

Putting aside the wasted dollars it was interesting that the report chose to highlight:

Most of the agencies reviewed do not have the people with the necessary expertise and experience to get the best value out of contracts for telecommunications services.

Additionally the following wise comment was made:

In the not too distant future, telecommunication services, including e-mail and internet access, may be delivered by global suppliers providing standard services and prices. The demand volume of NSW agencies, even if aggregated, would not be significant in comparison to the global market and could not be used to influence either service characteristics or prices. In this emerging environment, the government will need to redefine what is needed to achieve value for money.

A close examination of this report is warranted by all those organisations that seek to determine and derive value from large service contracts.

We are yet to find an organisation that is outside that parameter.


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