Ovum: Whole-of-Government IT deals set to shake after Queensland Health payroll disaster

Ovum: Whole-of-Government IT deals set to shake after Queensland Health payroll disaster

Government procurement of IT on shaky ground as the Queensland Government faces off against IBM over an SAP implementation

The massive failure of Queensland Health’s payroll system rollout will greatly shock whole-of-government IT plans around Australia, according to Ovum public sector analyst, Kevin Noonan.

Earlier this week, the Queensland Government was embarrassed by an Auditor-General report that investigated an SAP HR payroll system implementation by IBM.

It revealed that a rollout with an initial costing of $6.19 million and timetable of eight months blew out to $64.5m over 26 months. The system is still not fixed and thousands of health workers got incorrect levels of pay.

According to Noonan, the Queensland government’s subsequent announcement it was reviewing its methods of delivering whole-of-government solutions would affect every state and federal government body looking to get unified procurement.

“This will have a massive impact on government procurement. Queensland has been leading the way in terms of moves to super agencies and shared services,” he said.

“What we’re seeing here is the downside of shared services. It simply doesn’t work unless you have strong governance with the core agency, the customer agencies and the suppliers.”

NSW is just one of the states pursuing a whole-of-government initiative and the Federal Government has focused much of its cost-cutting measures on IT supplier panels for datacentres as well as PC hardware.

Noonan said one potential result from various governments was a swing away from whole-of-government procurements.

Queensland Premier, Anna Bligh, announced she would abandon a “one-size-fits all” approach to shared services and may allow larger agencies to acquire their own HR and payroll systems.

“This could be likened to a major earthquake happening within government purchasing,” Noonan said. “We haven’t seen the end of the aftershocks... walking away from centralised procurement is probably not a good answer.

“I think that all Governments will be watching the outcome of this very carefully.”

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Tags ovumqueensland healthAnna Bligh

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