Tag: Finance and Performance Committee

Council Replies to Concern on IT Budget Blowouts

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This is presented entirely without comment from me

 

Note: any future commentary will be in other posts

 

From Auckland Council

IT programme – no cost blowout

 

Following discussion of an update on Auckland Council’s Information Services Transformational Programme at today’s Finance and Performance Committee, council has released the report publicly.

Today’s committee agenda item (see resolutions below) sought to bring forward $24m to be spent in the earlier stages of the project, enabling efficiencies to be achieved later on.

The report (attached) covers the consolidation of core council information technology systems and addresses the reprioritisation of the programme to optimise outcomes, and the extension and enhancement of the testing programme.

Chief Operating Officer Dean Kimpton says there is no ‘cost blowout’ and rigorous risk management processes are being applied to the programme.

“There is no change to our overall IT budget and no increase in funding required; however, the NewCore component of the overall programme has increased in cost and will require an additional year to complete.

“We’ve taken a closer look at the complexity of our systems and carried out more detailed due diligence, which has given us a clearer picture of the priorities. As a result, we are accelerating some parts of the project and must adjust funding accordingly.

“We want to simplify our processes so Aucklanders have systems that are customer-friendly and easy to use, at their fingertips. Building consents, resource consents, rating, dog licensing and the booking of community facilities are some of the areas that will benefit from more customer-friendly online and IT systems.

“The accelerated $24m spend agreed at today’s committee is simply bringing forward some capital spend. We want all the inter-related parts of the programme rolled out in the optimal order. It’s also about applying more rigour to testing as we go forward and ensuring we are learning from any Novopay-type experiences,” Mr Kimpton says.

“We want to realise the benefits of the programme at a greater rate, hence we brought forward some of the spend,” he says.

An independent chief information officer (CIO) reference group, made up of CIOs from a range of public sector and corporate organisations, has brought strong governance oversight to the council’s IT transformation programme, and has endorsed the approach taken.

Independent expertise from EY has also brought critical oversight of the programme.

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Further Information

 

Finance and Performance Committee Meeting – 20 November 2014

Resolutions:

  1. a) note the update and progress being made on the Organisation IS Transformation programme
  2. b) note the reprioritisation of the programme to optimise the overall outcomes of the programme and note that no additional funding for the IS transformation programme is requested
  3. c) approve the re-phasing of $24 million of IS transformation budget forward to the 2015 and 2016 years in order to optimise overall programme outcomes
  4. d) note the extended and intensified quality assurance and testing programme at a cost of $13m
  5. e) agree that the Council’s IT programme progress including NewCore be reported to this Committee on a quarterly basis
  6. f) agree that the item and report be considered in the open section of the meeting.

 

About NewCore:

The NewCore transformation (consolidation) project is complex. It is designed to consolidate the core systems from the eight legacy councils that support customer interactions, rates, regulatory services and related property data. Each legacy council had a different system (or group of systems) which collected and stored large amounts of complex data in different ways.

As well as consolidation, this project will reduce the cost of collecting information and managing these services. It aims to:

  • simplify and standardise customer and business processes for customer interaction, rates, regulatory services and related property data
  • enable more effective development of digital solutions for customers, giving them more choices around how they want to interact with council
  • consolidate core customer-facing  systems that support these processes
  • create a standardized base set of processes and systems for implementation of the Unitary Plan and bylaw reviews, where only one set of systems needs to be updated, as opposed to multiple legacy systems, and reducing the operational risk associated with complex end-of-life systems.

 

The Agenda Item concerning the IT situation

 

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Might as well stick this up from Councillor Brewer seeming it is public record anyhow:

 

NO SPIN ZONE….

NewCore CAPEX budget has more than doubled in two years

Auckland Councillor Cameron Brewer says two official council reports two years apart show the capital expenditure budget for council’s NewCore computer system increasing by more than double from $58.1m to $124m. The Councillor for Orakei says the council is now desperate to downplay the project’s increasing costs by saying this is all just about shuffling around the organisation’s existing and wider IT budget.

“Let’s not lose sight that the full and final promise made to councillors in 2012 specified a total project capital cost less than half of what was highlighted in today’s report to Finance & Performance. Mr Brewer and other councillors were pleased the committee today debated the item in public after pressure for the matters to be taken out of confidential. “An amendment to defer any decisions to the full council next week was unfortunately lost 8/9, while my amendment which helpfully highlighted some home truths about the growing capital expenditure budget and expressed genuine council concern was amazingly lost 7/9:


BREWER/QUAX:

  • ‘Note that on 29 November 2012 councillors were advised that the “total cost of the programme is $71m made up of $58.1m CAPEX and $12.9m OPEX” while the 20 November 2014 report states that “total NewCore (CAPEX) costs post reset are $124m” with any additional operational expenditure not specified, and the committee records its utmost concern around future cost escalations and the project’s impact on Auckland Council’s other non-NewCore IT budget.’
  • “The public deserves to know that this project’s capital budget has changed dramatically in the past two years, not just hear the tricky spin denying any blow-out. This is not just about bringing some approved capital budget forward. This is a project which now has more than twice the total capital price-tag, and we still have no idea about any subsequent operational expenditure increases and impacts.
  • “To achieve all this they have raided the organisation’s wider IT budget for the next five years and so alarmingly we can now probably expect budget overruns in other IT areas in future years which is another big worry. Rest assured the hand will keep coming out,” says Cameron Brewer.