Qld Health payroll report slams worst-ever IT project

Queensland’s high-profile payroll systems implementation was “a serious failure” and a “waste of public sector resources” that will stand as a high-water mark of IT project management failure and raises serious questions about the management of state-government IT, the inquiry into the ill-fated project has concluded.

Headed by Hon. Richard N Chesterman, the $5m Queensland Health Payroll System Commission of Inquiry was opened on 13 December 2012, to explore the disastrous implementation of a payroll system that grew out of the push towards consolidating IT-supported business functions into a central shared services organisation.

Queensland’s shared-services initiative, managed under the auspices of service-delivery firm Corptech, took on as one of its first major tasks the implementation of a new payroll system to replace the end-of-life LATTICE system used within Queensland Health (QH). In December 2007 IBM was appointed as a prime contractor of a planned $98m project with the understanding that the new QH payroll system would be live by 31 July 2008.

After a series of disastrous missteps and the implementation of a new system requiring 1000 employees to manually process fortnightly pays for 80,000 QH staff, the project’s cost within the next eight years is estimated at over $1.2 billion. The current system is heavily manual and requires 1000 employees to process data to deliver fortnightly pays.

The report, which runs to more than 250 pages, examined the process by which the system was specified, procured, implemented and ultimately stumbled to become a fiasco costed Queensland taxpayers over $1.2 billion, created extensive issues with a need for heavy manual remediation, and has still not been fixed.

The system’s “failure, attended by enormous cost, damage to government and impact on workforce, may be the most spectacular example of all the unsuccessful attempts to impose a uniform solution on a highly complicated an individualised agency,” Chesterman wrote.

“The replacement of the QH payroll system must take a place in the front rank of failures in public administration in this country. It may be the worst.”

The report highlights the in-depth examination of the procurement, contract and project management, and settlement aspects of the project, with four core recommendations handed down that will be mandatory reading for any government IT manager.

These include the need for forward planning for all legacy systems, to ensure “that decisions concerning them are not made in haste”; the use of the QH debacle as a reference to guide “specific attention” as to how its lessons might apply to proposed new projects; that the Queensland Government apply “an appropriate structure” for oversight of large ICT projects; and that QH begin planning to replace the failed system “immediately”.

The full report is available for download here