McKinsey and KPMG lead strategic design of Services Australia

13 August 2019 4 min. read

The Australian government has hired consulting giants McKinsey & Company (lead consultant) and KPMG to lead the design of its new Services Australia department.

Following the elections held in May, prime minister Scott Morrison announced a raft of changes to the government services infrastructure, aimed at improving the way services are provided to businesses and Australians, as well as removing bureaucratic bottlenecks.

One of the major changes is the launch of Services Australia, which builds for a large part on the existing Department of Human Services. but sees a number of new responsibilities added to its mandate. According to the Administrative Arrangements Order released by Morrison, Services Australia will assume responsibility for the “design, development, delivery, co-ordination, and monitoring of government services, social security, child support, students, families, aged care and health programs, and Australian Hearing Services.”

When fully live, Services Australia will offer an online environment where nationals can apply for birth and marriage certificates, book driving tests and renew vehicle registration among other services. 

On top of absorbing the HR portfolio, the revamped unit will also take leadership for all of the government’s ICT service delivery to institutions, the public IT infrastructure and IT procurement policy and services, tasks that previously fell under the banner of the Department of Prime Minister and Cabinet. 

McKinsey and KPMG lead strategic design of Services Australia“I want to see some congestion-busting not on our roads ... but when it comes to bureaucratic bottlenecks and regulatory bottlenecks so Australians can get access to those services in a more timely and efficient way,” said the prime minister. He went on to describe “making better use of technology and better integrating service delivery across different portfolios” a key lever in achieving the goal. 

Morrison aims at replicating the success booked by Service NSW, which was set up as an independent delivery agency eight years ago and since has both increased the effectiveness and efficiency of service delivery in New South Wales. Morrison: “Services Australia will pick up its lead from a similar organisation established by the NSW government called Service NSW, which I think has been a very important reform in NSW and made dealing with government much easier.” 

Leading the federal government’s new one-stop shop for services is Martin Hoffman, the former secretary of the NSW Department of Finance, Services and Innovation. “Martin brings a wealth of experience to the role, including an extensive understanding of Service NSW's customer-centric design, as well as a strong background in successful delivery of customer-focused services,” Robert said in June. 

A strategic blueprint to build on

Hoffman’s first task is to setup the blueprint for the organisation, and in doing so, he has called in the help of outside experts. Following a competitive tender process, professional services firm consulting firms have been awarded a six-week contract, which sees them split $858,000 in fees.

Shortly after the news broke in media, a spokesman for the Department of Human Services confirmed: “McKinsey and KPMG have been engaged to provide advice to the Services Australia Taskforce that has been established to develop the strategic plan for Services Australia.” 

McKinsey has been granted the lead role on the project, with KPMG reporting into the firm. The joint team will oversee work including designing the to-be organisation, the mandates, roles & responsibilities, the governance, and the governing principles for delivery. In addition, the consulting firms will deliver a plan for the next phases of the project and a roadmap how progress can best be booked.

McKinsey's team consists of among others partners Damien Bruce and Jules Carrigan, associate partner Victor Finkel and manager Melanie Brow. KPMG's team is led by Dean Grandy, a partner in the firm's management consulting wing.

When live, Services Australia should “bring in a new era in customer service, focused on the needs and expectations of all Australians dealing with government” by providing “simple and seamless interaction”.

McKinsey’s appointment comes two months after it landed a separate $5.9 million contract with the Department of Human Services for the provision of business advisory services. This work is however not related to Services Australia. For KPMG, the revelation comes hot on the heels of a political inquiry into the high – according to some too high – reliance of the Australian central government on the Big Four accounting and consulting firms of Deloitte, EY, KPMG and PwC.