As New Zealand's biggest local authority seeks savings across the board, its ICT team appears to be delivering.
Auckland Council reported its major contracts and supplier spending for the year to the end of June 2022 last month, revealing a steep decline in external ICT spending over the last three years.
Spending with major suppliers tracked by Reseller News declined from $60.6 million in 2020 to $49.6 in 2022. That said, the biggest gains were achieved between 2020 and 2021, when major projects were being completed, before flatlining in 2022.
Auckland Council ICT continued to focus on cost control in 2022 through more strategic partnerships with vendors using the organisations scale at the group level, Auckland Council head of platform and operations Neil McGowan said.
"We’ve seen an overall decrease in spend as we’ve furthered our optimisation of SAP usage and had less project-related increases," he said.
"We’ve also implemented a group-wide approach for a software license reseller to leverage economies of scale over the next few years, awarded to Datacom."
That $30 million deal was negotiated using the buying power of not just the council, but also two of its controlled organisations, Watercare and Auckland Transport. Inked just last month, the impact of the contract is yet to be seen in the council's spending disclosures.
McGowan said although a transition from Vodafone to Spark for mobile phones was delayed by COVID-19 lockdowns, savings in overall mobile costs had been achieved as the rollout progressed.
"In addition, the council’s multicloud implementation continued to deliver the forecast recurring savings for infrastructure and hosting costs with Revera/CCL, and project-related costs with The Instillery have decreased," he said.
Analysis showed the major winner at Auckland Council over the last three financial years was Datacom, which increased its billings from $4.1 million to $7.6 million. Spark-owned Revera's billings declined from $13.5 million to $6.2 million over the same period.
Datacom's numbers should improve further in 2023 as the impact of its major software win come on-stream.
SAP costs were another area targeted for savings. Auckland Council has already reduced its spending with the German giant from $10.8 million to $8.6 million over the three years tracked.
This was probably due in part to lower project activity, but the council has also been renegotiating its existing contracts since late 2020.
Some details of that effort were reported on Monday, but financial gains, if any, were withheld to be discussed in a confidential committee meeting.