Institutional readiness or the preparedness of an organisation to respond to changes and adapt to new ways of doing things determines to a great extent how effectively organisations can deliver better services supported by a mix of robust processes, right people and infrastructure. Given the increasing pressure to adopt open government approaches including employing open data as developmental resource, governments and their agencies must re-assess their capabilities to address these new demands in addition to existing needs and challenges. This paper describes an ongoing effort by an agency responsible for e-government strategy and implementation to develop an assessment framework to determine the needs and the level of readiness of government agencies to: i) deliver open government services, ii) collaborate with other agencies in sharing data, systems and services for efficient service delivery and iii) engage citizens and other stakeholders in government decision making and co-development of services. Major aspects of the framework including the critical success factors are highlighted. Rather than ranking agencies, the framework is intended to be used for clustering agencies into communities of organizations with similar needs and readiness profiles. This provides a basis for shared solution development within government.