By Ed Chung, CEO of Australian-made SaaS software company TechnologyOne
Death and taxes, they say, are the only two certainties in life.
Perhaps challenging to come in as a third is the seeming inevitability that every budget – state or Federal, will feature announcements of record-breaking commitments to investment in infrastructure.
The promise of new roads, rail, bridges, and public facilities has an obvious political appeal.
There is also a powerful argument to be made that spending on infrastructure is the economically responsible way for governments to stimulate jobs and growth.
Not only is it creating construction industry opportunities, it is building capacity in the economy to drive other efficiencies.
But, with budget after budget announcing record infrastructure investment now colliding with a fiscal crisis, resurgent inflation and sagging growth, a couple of questions need to be asked.
Firstly, when will enough spending on new infrastructure ever be enough?
And, are we getting value for money, or just compounding the fiscal problem with inefficient and poorly managed assets, at risk of creating a crushing debt burden for generations to come?
The answer to the first question has to be no.
By its nature, infrastructure needs to be rebuilt, expanded, retired and replaced. And, most importantly for information and communications technology infrastructure, it needs to be kept up to date.
Which means spending on infrastructure will never end as economies grow and modernise.
There is no better example of that than technology infrastructure.
Imagine if we had not invested in upgraded telecommunications, or alternatively, look at the struggles of government agencies trying to meet citizens' expectations using obsolete information technology.
The answer to the second question, though, is much trickier, especially when it comes to government owned or funded assets and infrastructure.
While most government infrastructure investments are subject to some cost-benefit analysis in the planning stages, there is often little visibility into whether the build project is being managed in the most efficient way.
On top of that, the cost and effectiveness of the ongoing management and maintenance of them is often a black box.
Governments would have no way of accurately knowing how much recurrent cost has been added to their budgets from recent investment in infrastructure and assets, and no idea if money is being wasted.
Worse, poorly managed assets can risk damage to irreplaceable assets or even create risks to the public.
The recent announcement of more than $500 million of emergency funding over four years for urgent repairs to cultural institutions came after warning that the priceless collections in places like the National Gallery of Australia were at risk of damage from leaky roofs and windows.
Modern asset management software mean organisations today can resolve these issues by giving real-time information on costs and maintenance from cradle to grave.
The first value this delivers is the ability to identify and manage build processes much more effectively. This goes directly to the first problem that besets big projects – slipped timelines and blown budgets as they slid out of control.
But the ongoing power of these systems is the integration of the project management with the lifelong support of assets.
With most organisations managing assets on spreadsheets spread across different parts of the business, the transition to these systems can unearth a few unwelcome surprises in the first instance.
But once the single source of truth is established, it not only captures the state of the assets and all associated characteristics, it can also directly integrate in finance systems.
In other words, the days of the information black hole are gone forever. Organisations – including governments – will for the first time be able to know both exactly what is the on-going burden on the annual budget of every dollar spent on new assets.
The implementation of modern asset management systems across government will pay for themselves over time, but would likely take years to achieve, even if it began immediately.
However, one way the Federal Government could speed up the process is by attaching a requirement that any asset or infrastructure project above $10 million in value is required to be supported by a modern system.
With budgets in the condition they are in, getting started should be a matter of urgency.