Williams, a teacher by profession, started in coaching at club level with Western Suburbs in Sydney, Australia in 1991. He became head coach of the Eastwood club in Sydney in 1993 and a year later gained representative recognition when he was appointed fitness and skills coach for the Emerging Wallabies' tour of Zimbabwe, Namibia and South Africa.
In 1995 his coaching stints included New South Wales A, New South Wales Sevens, and an assistant's post for an Australian XV against England A. He was also a coaching assistant at the Wallaby World Cup camps. In 1996 he became manager and assistant coach for the NSW Waratahs Super 12 campaign. For the next three years he was head coach for the NSW Waratahs. However, during Williams' time as coach the NSW Waratahs failed to reach the Super 12 finals.
Williams was instrumental in mentoring and coaching such great players as David Campese, Matt Burke, Tiaan Strauss, Phil Kearns and Jason Little.
In the autumn of 1999 he acted as backs coach in Leinster Rugby's European Cup campaign, prelude to becoming the province's head coach in 2000. Williams also undertook the role of defensive coach for the Irish national team in 2001. He was the first Australian Super 12 Coach to move to Europe.
In Williams' three years at Leinster he "was part of a great group of men" who rose through the European rankings from thirty five to second. Leinster won the inaugural Celtic League Final and were semi-finalists of the European Cup.
Williams coached the former British and Irish Lions Captain Brian O'Driscoll, as well as Gordon D'Arcy, Shane Horgan, Malcolm O'Kelly and Denis Hickie.
Williams also was appointed Head Coach of Ireland "A" and won the Six Nations title with the "A" team. This led to him being "head hunted" and appointed Head Coach of Scotland. This unique challenge saw Williams as only the second Australian in over a century to be appointed as a head coach in the Six Nations Championship and the first foreign head coach of the Scotland national rugby union team, holding the position from December 2003 to April 2005.
He resigned from the post of head coach at Ulster Rugby in May 2009.
Williams is currently working for Setanta Ireland while acting as Coaching Director for the team of RC Narbonne in the French Pro D2 alongside Justin Harrison (Forwards Coach and ex Wallaby). He is also technical adviser for the Sevens developmental club, Shamrock Warriors RFC.
He worked for the Scottish Rugby Union full-time, and was the first foreign head coach of Scotland, from December 2003 until April 2005. His first assistant coach (forwards coach) was New Zealander Todd Blackadder and the second was Ulsterman Willie Anderson. Williams was appointed by Ian McGeechan and Jim Telfer.
When he took over as Scotland's head coach Williams first dismissed Alan Tait as defence coach and told Gregor Townsend among others that he had no room for him in the team. This was regarded by many in Scotland as a mistake at the time, as Townsend was then still only thirty years old.
Williams and his large team of assistants were themselves eventually dismissed by the SRU on 25 April 2005 after a disastrous record of only three wins in two years from 17 games.
The three wins were over Samoa, Japan and Italy. While the victory over Samoa in Wellington was a good one and that over a demoralised and poorly coached Japan was by a record score (100–8), the one over Italy in the 2005 Six Nations was a poor one, Scotland retaining victory by 18–10.