Federal Government crippling a local industry…

johnyboy 8 December 2011 25

The Federal government over the last 5 years has gradually increased its spending on internal video production units. The small production industry, (yes, there is an industry here in Canberra – but largest on a per-capita basis) is starting to feel the pain from the decrease in video production outsourcing by government departments.

Some departments are spending big money on the establishment of these units, by way of expensive broadcast equipment, then the staffing budget to operate the equipment. The capital cost to set up these units is usually above $1 million.

The local industry is feeling the pain and is literally competing against the government to pitch on work.

DEEWR established a large production unit a few years back and is known to be pitching against private industry for other department production projects. This is hurting local production companies, because they just can’t compete on price.

The production industry in Canberra employs some 100-200 people at a conservative guess. Production company owners aren’t supportive of the magnitude of some of these commercial-scale government production units.

What’s the problem, you say?

Well, the problem is three fold:

Cost vs outsource

The cost to open and run a unit would far out weigh the cost to outsource. The demand for projects to a department could at one stage justify the establishment of a unit, but as we have seen with DEEWR, the demand decreases and then the department is stuck with expensive broadcast equipment (one broadcast camera kit costs $85,000-$150,000). The unit then tries to justify its existence by pitching for work, alongside the commercial companies, for government jobs.

Quality of work

As with private enterprise, it’s a competitive market: meaning quality must always be maintained. Secondly, because profits are not required and high-performing environments are not maintained, the quality of work by the units is low.

Government competing against private industry

Government should support industry, and it does. But, in this case, it is an oversight by the executive level and the sums need to be done to see that creating a production unit just does not make sense. Outsourcing on demand makes much more sense financially and quality-wise. Secondly, government should not work against locally owned, small family businesses.


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25 Responses to Federal Government crippling a local industry…
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EvanJames EvanJames 12:16 pm 03 Jan 12

Best not to. Next thing you know, there’ll be angry notices going out about excessive downloads straining the departmental servers.

davo101 davo101 12:07 pm 03 Jan 12

What happens when you anger the gods. Got back to work today to find this email:

Colleagues

I would like to wish you and all those you care about a great Christmas and an enjoyable new year.

My end of year message to you is now available on video on the department’s intranet http://xxx.xxx.gov.au/about/dg-messages/111215v.

Thank you for the contribution that you have made this year.

Needless to say, I’m not going to watch it.

dpm dpm 10:56 am 09 Dec 11

Mysteryman said :

You do realise that I was talking about updates? Three to five minutes, maybe 6 minutes, tops. Never did I say ANYTHING about 30 mins worth of ministerial droning. You should also know that most people aren’t interesting in being “able to search for it, mark it up, comment on it, incorporate it into my own work, and have it linked to other related material”. They are updates for goodness sake. We aren’t talking about broadcasting hours worth of information. The purpose of an update is to get a message across quickly. It works. That’s why they do it.

Maybe they just like the celebrity status of ‘being on TV’ (and finding another way to utilise the inhouse production resources they set up – that were sitting around doing little most of the time)? 😉
Do they have a makeup department too? Hahaha!

Mysteryman Mysteryman 10:37 am 09 Dec 11

davo101 said :

Mysteryman said :

This isn’t the 60s.

Exactly. So don’t feed me information in a linear and passive fashion as if I’m a school pupil trapped in the 1950’s. I want to consume my information in a non-linear active way. I want to be able to search for it, mark it up, comment on it, incorporate it into my own work, and have it linked to other related material. Video impedes this and greatly reduces the bandwidth of the channel.

Seriously: would you rather sit and listen to the minister drone on for 30 minutes, or spend a couple of minutes scanning his weekly email looking for anything of interest?

Mysteryman said :

There’s a reason for the increase in video content and it’s because it works.

In the words of Wikipedia (a community edited information source–how very modern): {{Citation needed}}

You do realise that I was talking about updates? Three to five minutes, maybe 6 minutes, tops. Never did I say ANYTHING about 30 mins worth of ministerial droning. You should also know that most people aren’t interesting in being “able to search for it, mark it up, comment on it, incorporate it into my own work, and have it linked to other related material”. They are updates for goodness sake. We aren’t talking about broadcasting hours worth of information. The purpose of an update is to get a message across quickly. It works. That’s why they do it.

davo101 davo101 9:46 am 09 Dec 11

Mysteryman said :

This isn’t the 60s.

Exactly. So don’t feed me information in a linear and passive fashion as if I’m a school pupil trapped in the 1950’s. I want to consume my information in a non-linear active way. I want to be able to search for it, mark it up, comment on it, incorporate it into my own work, and have it linked to other related material. Video impedes this and greatly reduces the bandwidth of the channel.

Seriously: would you rather sit and listen to the minister drone on for 30 minutes, or spend a couple of minutes scanning his weekly email looking for anything of interest?

Mysteryman said :

There’s a reason for the increase in video content and it’s because it works.

In the words of Wikipedia (a community edited information source–how very modern): {{Citation needed}}

realman realman 6:53 pm 08 Dec 11

Coming back in late but…. surely video making isnt core business for government departments, if you argued ICT is then I would say fair enough, security alone justifies that but video surely not.

In regard to saving money by having inhouse peoples and equipment – its my experience that more often than not in all areas / all suppliers – the expenditure decision is made by the departments not the suppliers – they cannot just write their own cheques unless someone is not doing their jobs at the dept end.

Frustrated Frustrated 5:25 pm 08 Dec 11

Sorry, but outsourcing Govt functions is BS!

ICT for example, there is no cost savings by cutting PS staff and outsourcing to a company like Unisys for example. Look at what EDS did to ATO a decade or so ago.

Okwhatever Okwhatever 3:39 pm 08 Dec 11

This is the way of the future, Harvey Norman and other major retailers have been doing it for some time now.

PM PM 3:29 pm 08 Dec 11

Ooh – that was tricky!

johnboy johnboy 3:25 pm 08 Dec 11

Not me!

PM PM 3:25 pm 08 Dec 11

I agree, JB. It’s a disgrace.

Bluenomi Bluenomi 3:24 pm 08 Dec 11

Having worked for both an external and internal production house I have to say internal pays much better so I know which I’d prefer…

dtc dtc 3:12 pm 08 Dec 11

johnyboy said :

amarooresident3 said :

On top of that, the procurement work that would have to be carried out to produce the same volume of material would cost a fortune in staff time if you had to farm it out to the private sector.

Well, this is a great point. Sometimes, it seems, that this work is not done, even if outsourcing will save money in the long run.

Well, its a great point only because Agencies, when faced with (a) an easy way to comply with the Commonwealth Procurement Guidelines (eg establish a panel and then sole source jobs under $80k) or (b) a very complicated and inefficient way to procure (eg: run multiple or mini tenders for every job regardless of size), will always pick option (b), probably with associated RFT and contract documents and quotes and purchase orders and multiple other requirements. Agency procurement methodology is a significant and uncosted expense, for both the PS and the contractors. And in the end a lot of contracts are awarded to the firm they wanted to give it to anyway.

As an aside, if the Commonwealth competes against the private sector it is meant to be on the basis of “competitive neutrality” eg: all costs included and not borne by the Departmen, compliance with same laws, pricing to return commercial profits. Check out the Productivity Commission website – and complain to them if this is not occuring.

Mysteryman Mysteryman 2:27 pm 08 Dec 11

davo101 said :

Mysteryman said :

Updates, announcements, changes to policy, new ideas and procedures, are all being broadcast by video on demand services on daily and weekly bases. Portfolio ministers are making weekly “news-style” address to staff to keep them informed and up-to-date, as it’s effective without being time consuming, for staff members across multiple locations to access and ingest.

Ouch, the pain, my head. Why bother writing these things down when you can force people to watch them as a video. Who needs to be able to search, skim, or cross-reference when you can have it all in an amorphous blob delivered to you at one-third the speed?

I’m so glad my employer has no money. Imagine the agony if the CEO’s weekly email was delivered as a video presentation.

Yeah you’re right. And you know what? We don’t need email, either. Carrier pigeons and smoke signals worked fine. Who cares if it’s faster, more effective, and more useful to type and send an email. We don’t need that. People need to stop being lazy. Hand write and post letters, for goodness sake. I don’t care if it takes days for the correspondence to arrive, why should employers? And the internet.. what a waste of time that is…

/sarcasm.

This isn’t the 60s. There’s a reason for the increase in video content and it’s because it works.

Classified Classified 2:05 pm 08 Dec 11

realman said :

Imagine if they started doing that with medicines, cars and planes.

This sounds like a massive conflict of interest – collect taxes from industry and then finance the less talented and highly advantaged competitor…

If you want to see it on a very grand grand scale, have a look at what Centrelink is doing with IT outsourcing.

p1 p1 1:32 pm 08 Dec 11

The cost to open and run a unit would far out weigh the cost to outsource.

This is a pretty vague statement. It may be true. But then again it may be totally false. How can we really know? One thing I do know, is that there are not many departments or agencies that would consider bringing such a function inside unless they were damn sure it would save money in at least the medium term.

Deref Deref 1:26 pm 08 Dec 11

“Cost vs outsource

The cost to open and run a unit would far out weigh the cost to outsource…”

Evidence? It would seem to me that, if they’re doing enough work to warrant in-house facilities, in-house could well be cheaper. Happy to be proven wrong, but let’s see the evidence.

“Quality of work

As with private enterprise, it’s a competitive market: meaning quality must always be maintained.”

Every private business maintains the highest quality because of competition? Seriously?

“Government competing against private industry”

Everything Government does could be done by private industry, but there are lots of good reasons why it’s not. Simply saying that PE can do the job isn’t sufficient.

Your first point is potentially valid – if you can demonstrate that you can do as good or better for less, then you have a case. Otherwise not. It’s a pretty fair bet that the department concerned has crunched the numbers and come out with the in-house solution. They could be wrong, of course, but you’d need to demonstrate it.

breda breda 1:23 pm 08 Dec 11

I guess the main question is – do the in house operators tender for work based on comparable costs to private sector organisations? Presumably, they don’t pay the same taxes and charges as private companies, and probably have subsidised overheads as well from the larger organisations they are part of.

I don’t mind them using spare capacity to tender for outside jobs, but only if it is a level playing field. Otherwise, our taxes are just subsidising them to put their private sector competitors out of business.

johnyboy johnyboy 1:14 pm 08 Dec 11

amarooresident3 said :

On top of that, the procurement work that would have to be carried out to produce the same volume of material would cost a fortune in staff time if you had to farm it out to the private sector.

Well, this is a great point. Sometimes, it seems, that this work is not done, even if outsourcing will save money in the long run.

davo101 davo101 12:59 pm 08 Dec 11

Mysteryman said :

Updates, announcements, changes to policy, new ideas and procedures, are all being broadcast by video on demand services on daily and weekly bases. Portfolio ministers are making weekly “news-style” address to staff to keep them informed and up-to-date, as it’s effective without being time consuming, for staff members across multiple locations to access and ingest.

Ouch, the pain, my head. Why bother writing these things down when you can force people to watch them as a video. Who needs to be able to search, skim, or cross-reference when you can have it all in an amorphous blob delivered to you at one-third the speed?

I’m so glad my employer has no money. Imagine the agony if the CEO’s weekly email was delivered as a video presentation.

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