The least-worst option is probably to keep Smith on to the end of the year regardless. If we go for another coach mid season we might see the usual dead cat bounce of a new man, give him a long deal and then discover he's actually useless (see Agar). The only value I could see in replacing Smith mid season is in sending a message to players that what they are delivering isn't good enough. I would only bring in a coach mid season on the basis that unless we win the GF under them, they wouldn't be here next season. I doubt you'd have many takers.
In terms of replacement, just going to Australia isn't enough. Furner was from Australia and was awful, but anyone who had looked at his record at the Raiders would have steered well clear. But GH knew him, so in he came. Smith had a reasonable track record, but how much did the fact he was Tony's nephew have in the decision to hire him? The professional thing to do would be to pay someone who really knows their stuff and is very close to the reserve game in Aus to get us a shortlist of young, hungry coaches in Aus, and pick from them. I'd also think seriously about paying someone like Gus Gould to do an independent review of the playing and junior development side in the off season, as its clearly a complete mess.
Regardless, our next coach is not going to have the room to manoeuvre that Smith had this off season. I would expect them to look at the pack in particular and try to get rid of some midgets and bring in bigger forwards, and take some obvious decisions like not renewing Fusitu'a. Martin might also have to be sacrificed to get the cap and quota space to bring in what we need. But we will be stuck with the majority of the squad we have for a couple of years.