Defence commits $500m to fix payroll

Summary:Defence Minister John Faulkner has committed up to $500 million to fixing the department's ongoing payroll and human resource management issues.

Defence Minister John Faulkner has committed up to $500 million to fixing the department's ongoing payroll and human resource management issues.

John Faulkner
(Credit: Department of Defence)

Defence some time ago flagged its intention to replace the HR systems with a wider solution. In December last year, chief information officer Greg Farr told ZDNet.com.au that the department expected to ditch the "far from perfect" HR systems in 2009 in a tender worth around $400 million.

"We are committed to investing up to $500 million in a new payroll system, underpinned by robust processes and training packages," Faulkner said in a speech in Sydney last week. The full transcript is available online.

"While no pay system can be guaranteed to be completely free of errors, we are determined to put in place processes to ensure any mistakes are identified quickly and handled appropriately," he added.

In a nod to multiple reports that have characterised Defence's HR systems as out-of-date, Faulkner said it was "an open secret" that the department faced problems with its infrastructure.

"Some of Defence's ICT systems are antiquated and inadequate for Defence's complex operational requirements as a result of being grossly under-funded for years," he said. "Some of the department's ICT systems are now too cumbersome, fragile and costly to operate effectively."

Faulkner said it wasn't only the well-publicised problems with the remuneration of the elite SAS troops that had been an issue. "There are problems, for example, with the Flying Allowance, and with Army Reserve pay. And inevitably there will be more problems to come before new systems are put in place," he said.

The department currently operates several different payroll systems. The PMKeyS system is responsible among other things, for generating the salary component of remuneration for staff including the Army. An older system, ADFPay, generates what Defence calls the "allowance" component.

PMKeyS was first rolled out in 2002 and is based on Oracle's PeopleSoft software. Defence had initially planned to integrate the ADFPay functionality into PMKeyS, but the older and more limited system is still operational, with some of the integration between the two systems believed to still be being completed manually by staff. PMKeyS is believed to be focused on civilian remuneration, with the military broadly being served by ADF Pay.

These systems represent some of the largest payroll and HR systems operational in Australia; Faulker said each fortnight around $250 million was paid to around 100,000 ADF personnel and Defence staff, including compensation payments.

"There are on average, 140,000 manual transactions associated with personnel administration every fortnight — 3.45 million every year," he said.

In a wider sense, Faulkner noted a variety of other ICT initiates under way in the department, which have previously been flagged by Defence chief information officer Greg Farr and others, especially in the Defence whitepaper recently released.

These include bringing ICT capital expenditure together as a single unit under Farr's CIO Group, eliminating the need for staff to use multiple desktop PCs operating at different security levels, replacing ageing equipment, consolidating Defence datacentres and improving interoperability with allies.

Topics: IT Employment, CXO, Government, Government : AU

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