NSW govt in SAP project blowout

NSW govt in SAP project blowout

Summary: The New South Wales Department of Education and Communities has been forced to replan a SAP migration worth over $100 million, after cost blowouts and poor planning saw the original timeline fall behind.

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The New South Wales Department of Education and Communities has been forced to replan a SAP migration worth over $100 million, after cost blowouts and poor planning saw the original timeline fall behind.

The goal of the 2006 project was to replace the department's finance, human resources, payroll and administration systems with a suite of software from enterprise giant SAP. The software would affect users from TAFE NSW, state schools and other regional offices operated by the department.

The original scope of the project was for the software to be deployed in two phases over eight years at a cost of $153 million for phase one, and $218 million for phase two.

Now an investigation (PDF) into the project by the New South Wales Auditor-General Peter Achestraat has found that the project is falling behind in its delivery objectives, while adding an extra $29 million in taxpayer funds to the overall cost.

The state government had intended to complete phase one of the project by late 2010, but the audit found that the roll-out of SAP Finance intended for state schools was not yet completed, as was the case with the roll-out of SAP Human Resources and Payroll to TAFE NSW.

Phase two of the project would see SAP Human Resources and Payroll delivered by mid 2011, and the new Student Administration System delivered in late 2012 to schools and mid 2013 to TAFE NSW. Instead, the software will only reach its pilot stage by late 2012.

The auditor-general also found that the system failed to meet key business needs for the users that it was deployed to.

The implementation of SAP Finance at State and Regional Office locations in March 2010 did not provide all expected benefits to the business:

  • The finance system did not fully meet the department's needs, and users had to build some manual workarounds, which resulted in lost time and additional effort and costs, not included in the original business case
  • System users had some difficulty obtaining accurate and/or relevant and timely information
  • The Shared Service Centre did not have the required skills, resources and knowledge to fully support the system
  • System users did not have sufficient knowledge of the new system and its functionality.

As a result, the department has revised its deployment schedule for the system, as well as the budgetary and training requirements. The department has engaged a Transformation Service Provider to steer the project and obtained $14 million in extra funding for staff training, while conducting a review into the governance around the product and improving project transparency.

Topics: Government, Government AU, SAP

Luke Hopewell

About Luke Hopewell

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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4 comments
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  • Has a SAP implementation EVER delivered on time and within budget ?
    I sure haven't seen one of any scale...
    shad0h
  • No we have never seen a SAP rollout on time or budget.
    SAP and its contractors always find the "variation" and "addition" to charge and blow out costs.
    Hideous62
  • The fact that SAP ERP is so convoluted and difficult doesn't help.
    Yoda7
  • Looks like The GPT Group are having similar woes, I'm off to see their CIO speak at AIPM this week, and the topic is .... You guessed a failed SAP project.
    SarahMc-2f0ce