Sick – The Implementation of the Queensland Health Payroll System

When a report has in its introduction the following you know that you are in for an interesting read

The replacement of the Queensland Health payroll system must take a place in the front rank of failures in public administration in this country.

It may be the worst.

Today in our report of the week we take a look at the recently released independent inquiry into the implementation of the payroll system for the entity known as Queensland Health.

Queensland is Australia’s second largest and third most populous state.  It is Australia’s third largest economy.

Queensland Health is the government department responsible for operating and administering the public health system of Queensland.  There are more than 70,000 people that work for Queensland Health.

As the Inquiry notes:

On 14 March 2010 after ten aborted attempts to deliver the new payroll system, it “went live”.

It was a catastrophic failure as all Queenslanders know.

The system did not perform adequately with terrible consequences for the employees of Queensland Health and equally serious financial consequences for the State.

After many months of anguished activity during which employees of Queensland Health endured hardship and uncertainty, a functioning payroll system was developed, but it is very costly.

The report notes in its damning conclusion:

The State of Queensland paid IBM $25.7M for the Queensland Health replacement payroll system.

The original contract price was $6.195M.

The system malfunctioned on delivery.

After some months it was got to a point of stability at which Queensland Health employees were paid accurately and on time.

As at 31 May 2012 the number of payroll employees needed to conduct fortnightly pays was 1,010.

They performed over 200,000 manual processes on an average of 92,000 forms processed each fortnight. The system required significant modification: 2,500 customisations and more than 130 manual workarounds.

The final cost to the state of a $6m project is estimated to be $1.2 billion (yes you read correctly).

In what is a very well written report we leave the summary of the failings to the Commissioner Inquiring:

This Project serves as an example of serious failure, both because of the sharp increase in the price paid and the waste of public sector resources dedicated to achieving the system Go Live, some two and a half years later than contracted for. That cost continued afterwards, and continues in the need for its stabilisation and maintenance.

Added to this was the distress and inconvenience caused to Queensland Health staff, many of whom could not afford the financial consequences of a dysfunctional payroll system.

I have identified two principal causes of the inadequacies which led to the increase in contract price, the serious shortcomings in contract and project management, and in the State’s decision to settle with IBM.

Those causes were: unwarranted urgency and a lack of diligence on the part of State officials.

That lack of diligence manifested itself in the poor decisions which those officials made in scoping the Interim Solution; in their governance of the Project; and in failing to hold IBM to account to deliver a functional payroll system.

This report should be mandatory reading for any organisation that seeks to implement a critical information system.

Alas McLeod Governance fears that the lessons will be lost to the passage of time … and in time … an equally damning successor report will once again be authored.

And therein is the final wasted opportunity of the Queensland Health payroll system implementation.

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