CenITex - The ICT Shared Services Agency For Victorian Government

About CenITex

Question:

Discuss about the Strategic Plan for CenITex.

CenITex is a shared services agency for Information and Communications Technology (ICT). This agency was set up by the Government of Victoria which is the democratic administrative authority of the Australian Victoria state. CenITex was established as a body of the Victorian state in the month of July of the year 2008. This step was taken in order to centralize the support of Information and Communications Technology to the departments and agencies of the government. Formerly known as the Office of Shared Services, it was renamed CenITex signifying IT to be the center of excellence. Today, CenITex provides these ICT solutions and services to six departments of the Victorian Government and the associated agencies and entities of the government. CenITex was created for the purpose of centralizing the ICT support to the agencies and departments of the Victorian Government on 16^th July 2008. It is a state owned enterprise that provides services like application hosting, desktop services and the infrastructure required for the same (Jim & Rouse, 1999). They are serving 32,000 people presently with their services for ICT in six departments of the Victorian Government as well as the associated portfolio agencies. They are also providing their services to the Public Transport Services of Victoria, the VicForests, Environment protection Authority of Victoria, The Victorian Taxi Service Commission and the Victorian Ombudsman (Raman, 2012).

Honorable Robin Scott MLA who is the Minister of Finance of Victoria takes care of the operations of CenITex.  At CenITex, the corporate reporting requirements of the Department of Treasury and Finance are handled and taken care of. They provide complete ICT services for professional setups, workplaces and the hosting services. Their workplace solutions include personal productivity applications, services for desktops, file and printing, diary and email and internet access. The hosting services provided by CenITex include storage and back-up services, disaster recovery and restoration services, application hosting and database and application management for the server. The professional services offered by them are usually the projects funded by the customers (Dix & Lee, 2002). These include project management and building and designing the solutions. Along with these, CenITex also provides services for identity and access management, services for security, directory, and on-boarding and off-boarding services for the directories.  The organizational structure of CenITex is very simple with a panel of the Board of Directors and a CEO who reports to the CenITex board. The present CEO of CenITex is Michael Vanderheide. 

As mentioned on the organization’s website, the goal of CenITex aims at providing the services for the Information and Communications Technology to promote an agile, modern and productive public service. CenITex has adopted a few  strategies to achieve sustainable competitive advantage. Their primary strategy is to be a low cost provider with an emphasis on cost-based advantage over competitors. For this they have been providing services at the lowest possible costs without compromising on the quality of service being provided.In addition to this, the organization has also adopted A focused low cost strategy. This is done by concentrating on a narrow consumer segment and offering lower price. The price of their service has been already set to a very competitive scale and they have narrowed their focus to the public sector organizations to create a niche market. Thus the two main strategies adopted by the organization are cost leadership and focused low cost strategy. They are making use of their competitive capability to stay ahead in the game and also taking an advantage of their core competence and distinctive competence to emerge as a market leader. They provide an assortment of ICT services to the various departments of the Victorian Government. Their aim is to provide their customers with reliable, easy to use, contemporary technology and to enable them to deliver the services expected and needed by the Victorian Community. The two primary strategies used by CenITex are cost leadership by providing best possible services at a low cost and a focused differentiation strategy where they target a specific segment of the customers and provide a variety of specialized services to that particular customer segment. Thus, they aspire to provide their customers with quality services delivered on time that meets all their needs. They wish to keep their customers up to date with the latest technology and resolving any issue that may arise while doing that. They focus on responding to the needs of their customers in an efficient and time bound manner. They have a team of IT experts that aims at providing a resolution to all the IT woes of their customers to their satisfaction by taking ownership of the problem and getting it resolved. They also provide a platform that is absolutely secure and dependable so that the government agencies can do their work in a better way and deliver great services to their people. Their technology is reliable and secure and can be used for working on and storing the confidential and sensitive information available with the government departments and agencies. They also assure their customers of providing services that are cost effective and matching their needs to the t. They proclaim themselves to be a part of the Victorian Government and they focus on delivering the best value for the cost that the government bears for their services. They aim to serve the public sector of Victoria through their cost effective and secure technology solutions.

Services Offered by CenITex

The organizational structure of CenITex is headed by the Chief Executive Offices Michael Vanderheide. He reports to the Board of Directors of CenITex. The organization is split into four branches namely Strategy and Governance, Customer Engagement, Service Operations and Human Resources. These branches are headed by Paul Cooper, who is also the Acting Director of the Board, Nigel Cadywould, Scott Ayer and Catherine Proud respectively. Nigel, Scott and Catherine are also the Directors of the Board. Another person holding a position of responsibility in CenITex is Catherine Ho who is the Chief Financial Officer of CenITex. CenITex follows the accountability framework of the Victorian Government. This framework provides guidance during the decision making process of CenITex. Their primary goal is to provide services that are reliable, secure and at the best possible price. Their relationship with their customers is based on the organization’s commercially oriented arrangements. These include their service level agreements and the memorandum of understanding. Their services are commercially oriented and the accountability framework provides further clarity for decision making in the organization. The CenITex Board takes care of the governance and is the formal governing body for the organization. The Executive leadership team is assigned the operational responsibility and thus it takes care of the day to day functioning of the organization. Apart from this, there are two additional committees that are independent standing committees that report directly to the CenITex board. These are the Audit and Risk Committee and the Remuneration Committee. While the Audit and Risk Committee ensures integrity in work practices, quality of work and financial reporting, disclosures, internal control framework, annual audit of financial statements, legal compliance and the regulatory risks, the Remuneration Committee is a standing committee that presides the annual remuneration review, employment policies, compliance and appointment of the Chief Executive (eStrategyPartners, 2010)

The year 2012 was a year of turbulence for the organization CenITex as the Victorian Ombudsman study found out the conduct of the organization improper and there were numerous breaches of the policies and guidelines for procurement laid down by the CenITex board. The organization has however come a long way from that and redeemed the lost trust and image as the ICT service provider for the Victorian Government. This is even evident from the financial performance of CenITex that had observed a big drop in 2012 (State Government of Victoria, 2017). The organization had accounted for a loss of $25 million in 2010 and a loss of $37 million in 2011. They then went through an overhaul of not just the board and the members, but also the organizational policies. The cost leadership and focused differentiation strategy for CenITex seems to be working in favor of the organization. The organization in the year 2016 turned a surplus of $8 million and it is expected to increase further during this year. The board has decided to reinvest the surplus from the funds in the expansion of the existing operations. In addition to the surplus, the organization has further allocated an amount of $2 million to fund or co-fund the projects undertaken by other departments. This is named the innovation fund (Cowan, 2015).

Organizational Structure of CenITex

The major transformations that happened in the organization include application shifting for a department in the organization to Azure and introduction of Mobile Access Gateway. The focus has also shifted to cloud technologies which are predicted to be the future of storage technologies. This significantly reduced the operational cost of providing the same services and helped the organization in making profits even when the cost of the service remains the same or drops down. They have restructured the strategies, but the primary strategy of providing services at the lowest possible cost persists. They aim at providing the best possible services to their customers at the lowest possible cost. The overall operational environment of the organization has become much more reliable and the organization is slowly and steadily gaining back the trust lost. The organization that was once in the headlines and front pages for the infamous outages and discrepancies is has now reduced the outage of serious levels by about 40%. It is difficult to imagine that this organization was a few years back about to get replaced by the former state government. The number of clients of the organization has also increased from 6 in 2014 to 20 presently in the public sector of the Victorian Government however their focused differentiation strategy remains and the public sector is still their preferred customer segment. They have increased their on-site support and made the access to the IT service center even simpler with the help of a voice response menu. They remodeled and, modernized and standardized their infrastructure on the Government Shared Platform, which resulted in cost effective and more productive functioning. In January 2016, CenITex appointed four new members to its board of directors who are very high ranking public servants. The strategy restructuring has also impacted the employee turnover for the organization which is at an all time low of mere 6 percent (Coyne, 2015).

The organization is accounted for being a troublemaker since its inception in the year 2008. It has seen failure in operations, blow outs of the defined budget, poor strategic plan and weak implementation of the policies, but the good thing is that the organization has placed it all in the past now. It has been finally able to deliver what it was formed for and has been able to put the failures and letdowns in the past. The troubles for the organization had stemmed from poor planning and strategic thinking. This resulted in missed opportunities and tarnished image. However, the organization that was once on the brink of outsourcing is now standing tall with the improved performance and superior work environment. This has only been accomplished due to the changes made in the strategic plan at the time when it was needed the most (CenITex, 2015).

On conduction of a PESTEL analysis for CenITex, we have come across the following information that might help the organization in designing new strategies and implementing them to make the organizational functions even better. The PESTEL analysis of any organization helps us in studying their external environment and the contributing factors in the working of the organization that are beyond their control. For CenITex, the external environment comprises of the political, economic, socio-cultural, technological, ecological and legal environment. The political environment for CenITex is currently in favor of the organization. The people in power have extended full support and even given the organization additional responsibilities which indicated increased trust of the government on the organization. The political situation of the nation is currently very stable and that is an added benefit for CenITex. The economic position of Australia is very stable and the country also has a very stable financial system. The organization can contribute its bit in the low employment rates of the country and the economic growth of the nation is only going to help them in the long run. The socio-cultural factors include the social customs, beliefs and traditions belonging to the area being studied. The cultural environment of Australia is very diverse and the education level of the nation is continuously on a rise. This is going to benefit CenITex as it indicates an added flow of talent for the organization (Chirgwin, 2013). The technological environment of CenITex is a crucial contributor in the organization’s growth. Being an organization functioning in the IT industry, they must keep up with the rapidly evolving technologies and adapt them to stay ahead in the game. Ecological environment of an organization comprises of all the living and nonliving things that impact the working of the organization. The ecological environment of CenITex is made up of the organizations it works with, the technologies, its employees and the public that receives the services of their customers. CenITex has been providing quality services and has redeemed its status in the Australian market. The organization must now work towards maintaining this and improving their operations even more. The legal environment for CenITex is favorable till now. Although the organization has gone through a troubled past, the present is over that and the future looks promising for CenITex. The legal issues arising must be handled quickly and discretely in order to prevent them from tarnishing the image of the organization.

Strategies Adopted by CenITex

The cost leadership and focused differentiation strategies of CenITex have made them emerge as a leader in the market. The organization has been able to make the most out of their core competencies and this has resulted in economies of scale for CenITex. Mistakes are made by all but the ability or inability to learn and improve from their mistakes makes them successful or a failure, whatever they wish to be. The Victorian Government at the lowest point of operations of CenITex made them objectively assess the real reason and factors responsible for the poor performance of the organization. Although the organization has risen from the ashes and made a mark, it is important that the mistakes once made are not repeated. The organization needs to regularly monitor and audit the performance and strategic plan to ensure compliance (Fyfe, 2012). This will also make sure that the organization is headed in the right direction. The organization definitely has the drive and passion to make things happen and push the boundaries further, this has been proved by their current performance. There is a big responsibility on the shoulders of the organization and its management now to not just maintain the performance to its current level, but also take it a notch further. The organization must not waver from its drive to provide cost attractive services without compromising on the quality of the work. The government shared services organization has transformed itself and emerged as a success after struggling with accusations and allegations since it began the operations in 2008. The biggest and most commendable step taken by the organization was to accept the mistakes. The management accepted what was wrong with the organization and made efforts to improve them. This has made them come really far and emerge as a delayed but undisputed success (LeMay, 2012).

Since the operations of the organization depend on technology and technology is one sector that is very dynamic and evolves continuously, the organization needs to be on their toes all the time. They need to constantly adapt and evolve with the changing technologies and also change their operations accordingly. Cloud technology is the future of storage, thus more efforts must be done to shift to the cloud based servers and technologies that enable them(LeMay, 2013). The surplus funds must be further invested for the betterment of the organization and its operations and the risk factors like outages and breakdowns must be minimized by making the technologies more robust and reliable. The organizational environment must be maintained to be positive at all times and the employees must be respected and treated fairly. This will instill their trust in the organization and consequently make the organization stronger and better (Pearce, 2016).

The corporate strategy of CenITex is well defined and they are perfectly aligned right now to be the top provider of ICT services. The high industry attractiveness is going to work in favor of the organization and they are going to benefit from the extremely competitive market if they continue to follow their cost leadership and focused low cost strategy and provide the services at the best cost in the market.

The strategy and structure of the organization are explained in the report. The organization must work towards building a better mechanism for strategy implementation and strategy execution The competitive capabilities of the organization are in full bloom presently and are expected to improve even more in the coming times. The only target now is to make the most out of and continue their best practices and not sit on the accomplishments, but aim for continuous improvement. Some recommendations for briging about this change are implementing management by walking around, encouraging employee, customer and public feedback and making the feedback meachnism more robust. They already are making use of the first mover advantage as they are the sole provider of these services in the Australian public sector. They can improve even more if they start customization of their services and service attributes attributes that meet customers’ needs and are provided at an affordable cost. This strategy will make CenITex attract even more customers from not just the public sector of Australia, but also the private entities and independent users.

In this report, we have studied and conducted a detailed analysis on the strategic plan of CenITex. It is a shared services agency for Information and Communications Technology (ICT). This agency was set up by the Government of Victoria which is the democratic administrative authority of the Australian Victoria state. Formerly known as the Office of Shared Services, it was renamed CenITex signifying IT to be the center of excellence. Today, CenITex is providing these ICT solutions and services to six departments of the Victorian Government and the associated agencies and entities of the government(Harrowell, 2017). CenITex was created for the purpose of centralizing the ICT support to the agencies and departments of the Victorian Government on 16^th July 2008. It is an enterprise owned by the state that provides services like application hosting, desktop services and the infrastructure required for the same. They provide complete ICT services for professional setups, workplaces and the hosting services. The CenITex as an organization was formed to deliver an assortment of ICT services to the various departments of the Victorian Government (Chirgwin, 2013). Their aim is to provide their customers with reliable, easy to use, contemporary technology and to enable them to deliver the services expected and needed by the Victorian Community. They focus on responding to the needs of their customers in an efficient and time bound manner. They have a team of IT experts that aims at providing a resolution to all the IT woes of their customers to their satisfaction by taking ownership of the problem and getting it resolved. They also provide a platform that is absolutely secure and dependable so that the government agencies can do their work in a better way and deliver great services to their people. They proclaim themselves to be a part of the Victorian Government and they focus on delivering the best value for the cost that the government bears for their services (Bajkowski, 2016). CenITex was about to go out of business and its operations were about to get outsourced in the year 2012 after it was rated poorly and a number of lags were discovered in their operations. They then went through an overhaul of not just the board and the members, but also the organizational policies. This resulted in the redemption of the organization that accounted for a loss of $25 million and $37 million respectively to accounting for a surplus of $8 million in the year 2016. The organization has come a long way and must continue with its improves strategic planning and service delivery in order to make a mark.

References

Bajkowski, J., 2016. Renewed CenITex out to sell itself after privatisation averted, Available at: https://www.governmentnews.com.au/2016/03/23370/

CenITex, 2015. Director Strategy and Governance: Position Description, Available at: https://www.cpsuvic.org/public_docs/CeneITex/Director%20Strategy%20and%20Governance.pdf

Chirgwin, R., 2013. Beginning of the end for Cenitex, Available at: https://www.theregister.co.uk/2013/09/11/beginning_of_the_end_for_cenitex/

Cowan, P., 2015. Inside CenITex's years of tumult, Available at: https://www.itnews.com.au/feature/inside-cenitexs-years-of-tumult-406817

Coyne, A., 2015. Victoria cancels plans to outsource CenITex, Available at: https://www.itnews.com.au/news/victoria-cancels-plans-to-outsource-cenitex-405932

Dix, J. & Lee, H., 2002. The process of strategic planning, Available at: https://fisher.osu.edu/supplements/10/1470/All_Articles.pdf

eStrategyPartners, 2010. Sample strategic business plan, Available at: https://www.spmvv.ac.in/ecell/docs/business-models/1.pdf

Fyfe, M., 2012. CenITex: the background story, Available at: https://www.smh.com.au/it-pro/government-it/cenitex-the-background-story-20121024-285ni.html

Harrowell, A., 2017. Opinion: What’s wrong with CenITex?, Available at: https://www.computerworld.com.au/article/599463/opinion-what-wrong-cenitex/

Jim & Rouse, P., 1999. Effective Strategic Planning: The Enterprise Foundation, Available at: https://my2.ewb.ca/site_media/static/library/files/403/the-enterprise-foundation-effective-strategic-planning.pdf

LeMay, 2013. CenITex has no disaster recovery capacity, Available at: https://delimiter.com.au/2013/12/02/cenitex-disaster-recovery-capacity/

LeMay, R., 2012. “Nepotism”: Audit blasts CenITex culture, Available at: https://delimiter.com.au/2012/10/24/nepotism-audit-blasts-cenitex-culture/

Pearce, R., 2016. Transformed CenITex delivering wins for its customers, CEO says, Available at: https://www.computerworld.com.au/article/599539/transformed-cenitex-delivering-wins-its-customers-ceo-says/

Raman, S., 2012. How to write a strategic plan, Available at: https://www.hks.harvard.edu/ocpa/cms/files/communications-program/communications-workshops/workshop-handouts/RAMAN_strategic-planning.pdf

State Government of Victoria, 2017. CenITex: official website. [Online]
Available at: https://www.cenitex.vic.gov.au/