CenITex Annual Report 14 15 FINAL 14102015

100 Pages·2015·4.95 MB·English

15 October 2015

The Hon. Robin Scott MLA
Minister for Finance
Department of Treasury and Finance
1 Macarthur Street
East Melbourne VIC 3002

Dear Minister

CENITEX ANNUAL REPORT
I am pleased to submit the 2014-15 Annual Report of CenITex, including the Financial
Statements for the year ended 30 June 2015, for presentation to Parliament, pursuant to
Part 7 of the Financial Management Act 1994.

Yours sincerely

Randall Straw
Chairman

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Our vision
A connected and ICT-enabled public sector.

Our goal
Deliver customer focussed ICT services that support a modern, agile and productive public
service.

How we work
Committed to placing the customer at the centre of everything we do, and this underpins our
behaviour and decision making.

Our strategic objectives
• Improve customer service, performance and efficiency.
• Work collaboratively, embracing innovation to rapidly transform our services.
• Ensure financial sustainability.
• Build capability and high performance in our people.

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Contents

Section
1. From the Chairman 6

2. From the Chief Executive 7

3. CenITex Overview 10

4. Governance & Organisational Structure 12
4.1. Our governance 12
4.2. Relationship to the Minister 12
4.3. Board of Directors 12
4.3.1. CenITex governance – committees 13
4.4. Organisational structure 14
4.5. Executive Leadership Team key roles and responsibilities 14

5. Our Customers 16
5.1. Customer Committee 16
5.2. Machinery of Government changes 16
5.3. Engaging new customers 17
5.4. Customer service improvements 17
5.5. New customer projects 19
5.6. Customer Service Catalogue 20

6. Our Performance 22
6.1. Service Operations 22
6.1.1. Infrastructure Services 22
6.1.2. Workplace and Business Applications Services 22
6.1.3. Service Transition and Improvement Services 23
6.2. Customer Engagement 23
6.3. Highlights and Achievements 24
6.4. Strategy Coordination 26
6.5. Human Resources 28
6.6. Finance Services 29
6.7. Procurement Services 30

7. Our People 31
7.1. Our workforce 31
7.2. Employment and conduct principles 33
7.3. Occupational Health and Safety 34

8. Outlook 35
8.1. Background 35
8.2. The future 36
8.3. Challenges and priorities 36
8.4. Our focus 37

9. Financial Report 38
Auditor General’s Report 88

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10. Other Disclosures 90
10.1. Disclosures 90
10.1.1. Implementation of the Victorian Industry
Participation Policy 90
10.1.2. Consultancies 90
10.1.3. Disclosure of major contracts 91
10.1.4. Freedom of Information Act 1982 91
10.1.5. Building and maintenance compliance 91
10.1.6. National Competition Policy 92
10.1.7. Compliance with the Protected Disclosure Act 2012
(formerly the Whistleblowers Protection Act 2001) 92
10.1.8. Office-based environmental impacts 93
10.1.9. Additional information 94
10.2. Disclosure index 95
10.3. Our websites 97
10.4. Glossary of terms 98

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1 From the Chairman
The past 12 months has seen CenITex maintain quality ICT services during a time of
continued uncertainty, but one of increased demand for our services.
The year-end brought certainty for our hard working and resilient staff with the Government
decision to discontinue the full outsourcing of CenITex and maintain our role as a provider of
critical, secure and reliable ICT services to Victorian Government departments and
agencies.
CenITex realised a significant surplus this year after steady improvement over the previous
two years. Service benchmarks were also maintained and investment made in remediating
aged infrastructure, which in turn has reduced service risks.

CenITex is also realising the operational efficiencies and cost savings from consolidating
core ICT services and the transition of Victorian Government department customers onto a
shared operating environment (Government Shared Platform), which has enabled CenITex
to maintain its customer pricing for 2015-16 at 2014-15 levels. The decision by the
Department of Health and Human Services to migrate to the GSP is an endorsement of this
investment and hard work.
Despite these solid gains, there is more work to be done to better meet stakeholder
expectations. I note the Government’s decision to enhance the CenITex Board with the
inclusion of customer representatives, which will strengthen our capacity to build stronger
relationships and collaborative planning capabilities.
CenITex faces significant challenges and a paradigm shift in our business model – we intend
to be more adaptable, customer-focussed and able to partner with market-based service
providers to deliver more timely and cost effective services.
I am confident that CenITex is well placed to further improve the delivery of customer-
focussed ICT services to support a modern, agile and productive public service.

Randall Straw
Chairman

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2 From the Chief Executive
CenITex saw a strong finish to the financial year with a good surplus, a solid balance sheet,
a stable operational platform, continuing low staff attrition and key service levels being met.
We ended 2014-15 with a surplus of $8.4 million, our first surplus since 2010. While an
element of this related to a change in the accounting treatment of our assets, the major
share was achieved by a focus on cost management and cost reduction, and by increased
productivity enabled through efficiencies realised from investments in modernising and
standardising infrastructure on the Government Shared Platform (GSP). The year also saw
greater than budgeted project work driven by our customers.
Our staff demonstrated remarkable resilience and professionalism, particularly in the face of
an uncertain future as a result of market testing and potential for outsourcing as an outcome
of Project Atlas. The Government’s decision to retain CenITex brought some certainty about
our future and renewed vigour to a workforce eager to capitalise on the investment and hard
work we have put in over the past several years.
In 2014-15 we again met the service benchmark of 99.8 per cent availability for our
workplace and application hosting services. We resolved close to 90 per cent of the 10,000
Service Centre contacts each month in less than the targeted two hours and exceeded our
customer satisfaction benchmark among all customers who engaged with our Service
Centre or second level support.
In light of the efficiency gains achieved, the CenITex Board agreed to the absorption of both
Consumer Price Index (CPI) and Enterprise Bargaining Agreement (EBA) related cost
increases, so prices for customer services will remain at 2014-15 levels for 2015-16.
Further efficiencies are anticipated from the decision by the Department of Health and
Human Services to migrate from its separate environment to the GSP, which will nearly
double the number of users on the GSP to 23,000. The migration will take up to two years to
fully realise and will further strengthen our ability to convert economies of scale into better
services and lower costs.
Our business planning indicates we will have the capacity to share these efficiencies through
reducing prices in 2016-17.
Infrastructure improvement
A key factor in our delivery against agreed service levels has been a continued focus on risk
management and a targeting of infrastructure refresh investment in those areas that risk
assessment identified as most relevant for service availability and customer satisfaction.
These improvements have enabled CenITex to deliver benefits to customers through the
year, both in improved customer service and reduced costs. Improvements to infrastructure
and services include:
• an upgrade to the Storage Area Network (SAN), which brought improved application
performance
• an upgrade to the remote access service by migrating Citrix-based virtual desktop
infrastructure to a dedicated server and state-of-the-art solid state disk storage, which
uses two-thirds less space and 80 per cent less power
• the introduction of the McAfee spam quarantine system and a self-service spam control
console to combat the increasing frequency and sophistication of malicious email

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campaigns and allow our customers to release quarantined email messages without
having to call or email our Service Centre
• the roll out of self-service password reset features across DELWP, DEDJTR, DTF, DPC
and the Victorian Ombudsman’s Office
• the introduction of a phone based RSA remote access security soft token which allows
security codes to be downloaded onto mobile phones when working offsite
• a significant price reduction for the Traveler smartphone and tablet service and added
mobile access to the Sametime instant messaging feature for Apple and Android devices
at no extra charge.
Customer initiatives
A total of 531 customer projects valued at $18.3 million were opened during the year. Of
those, 204 were larger projects valued at $14.3 million and 327 were minor projects valued
at $4 million. Some of our significant customer projects included:
• an upgrade of 1400 customers to Windows 7 on the GSP across the former DTPLI,
DSDBI and VicForests in Melbourne and regional offices (all GSP customers will be on
Windows 7 by early August)
• completion of an 18-month project to refresh 40 servers with DJR and CSV and migrate
their shared Oracle Financials system to the new platform
• completion of a TRIM document management upgrade for 1600 desktops across DTPLI,
Public Transport Victoria and the Taxi Services Commission, plus a further 600 users in
Land Victoria and the former DPCD
• an upgrade of the Citrix Access Gateway, Lotus Notes email servers and TRIM for the
Office of the Chief Parliamentary Counsel
• assisting DTF with the update of its financial management system (SRIMS) development
environment, and migration to the Whole of Victorian Government (WoVG) wireless
network
• completion of an upgrade to the Integrated Client and Case Management System
(ICCMS), a 24/7 application supporting DHHS child protection services
• installation of a new guest wifi network at DPC’s MacArthur Street offices. By leveraging
off previous WoVG network investment, wireless guest access has now become a
CenITex-supported service and will be offered in the Customer Service Catalogue at 60
per cent below market rate.
Staff
In 2014-15 we continued to build capabilities across the organisation and develop staff skills
through training and development courses. There was a large focus on programs related to
resilience in response to change, and staff also participated in online training programs and
courses covering management development, workplace effectiveness, team building,
specialist technical areas and occupational health and safety. An externally delivered
employee assistance program was also available.
I would like to recognise the professionalism shown by our people during the past year. In
the face of uncertainty, they have responded in a manner which you would expect of those
who take deep pride in delivering quality services to their customers and through them, to
the Victorian community.

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Financial outcome
The 2014-15 year has been financially successful.
Earnings before depreciation and amortisation (EBITDA) were $31.7 million, representing a
$9.6 million improvement on 2013-14. Importantly, we achieved a surplus of $8.4 million, the
first time a surplus has been achieved since 2010.
This year we continued to implement and strengthen our financial controls and
accountability, particularly in relation to procurement and recruitment.
Outlook
Due in no small part to the hard work and professionalism of our staff, we head into the
future on a strong financial and operational platform.
Our primary focus will be on building a closer relationship with our customers, delivering a
more contemporary customer workplace environment and exploring the opportunities that
the cloud offers for greater efficiency, mobility and lower cost. We are budgeting for a further
surplus in the coming year, which will enable us to reduce prices.
We will be investing in the technologies, skills and partnerships needed to best enable our
customers to meet the needs of the communities they serve. We will also invest in the
people, systems and services needed to ensure the reliability of our platforms with a
particular focus on enhanced security, access control and system availability.
The organisation has been well served by the CenITex Board, which remained unchanged
this year. Taking up the recommendations of the independent review of the Government’s
business support shared services, we look forward to welcoming greater customer
representation onto the Board next year.
Management and staff consistently delivered in 2014-15, meeting customer expectations
while managing major change. I thank them for that and I also thank our customers for their
on-going support.
I am confident that we will continue to deliver a high quality of day-to-day services while
embracing innovation and increasing our customer focus. We are heading into an exciting,
challenging and rewarding year.

Michael Vanderheide
Chief Executive

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3 CenITex Overview
CenITex, an information and communications technology (ICT) shared services agency, was
created on 16 July 2008 as a state-owned enterprise with the aim of providing Victorian
Government departments and agencies with integrated and reliable ICT infrastructure,
application hosting and desktop services.
In October 2013, following the release of the then Victorian Government’s IT Strategy earlier
that year, CenITex established Program Evolve to test the market for transitioning CenITex
services to the private sector on behalf of its customers. Evolve was later re-named Project
Atlas and a Request for Proposal for the outsourcing of CenITex services was issued to the
market in October 2014.
Project Atlas was placed on hold in March 2015 pending the outcome of an independent
review of business support shared services across the Victorian government, commissioned
by the Department of Premier and Cabinet.
On 30 June 2015 the Special Minister of State, Gavin Jennings, and the Minister for
Finance, Robin Scott, released the findings of the review and the key outcomes, specific to
CenITex, were:

• Project Atlas - set up to outsource all CenITex services to one vendor - was to be
discontinued;
• CenITex is to continue to deliver the critical secure processing and information
management services it currently provides to support Government departments and will
be involved in targeted market testing of some commodity services deemed readily
available from the market; and,
• The CenITex Board is to be enhanced with the inclusion of customer representatives,
remaining accountable for the governance and ongoing performance of the organisation.

Key metrics (as at 30 June 2015)
Revenue – $148.3 million
Desktops supported – 30,600
Staff – 493 (including 22 contractors)
Data centres - 6
Servers - 2528 (70 per cent virtualised)
Average network services availability - 99.87 per cent (99.80 per cent target)
Average customer satisfaction rating – 96.18 per cent (95 per cent target)

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