Blown-out NewCore IT project dogged by governance failures

Documents reveal disarray in a NZ$157 million project to deliver new systems for the amalgamated Auckland Council.
Written by Rob O'Neill, Contributor

Documents released yesterday paint a picture of governance dysfunction at the heart of Auckland Council's blown-out NewCore IT project.

The council has also provided a breakdown of the often-confusing budget changes that have seen projected costs rise from NZ$71 million to NZ$157 million.

NewCore was approved in November 2012 to consolidate a vast number of IT systems that the new "Supercity" council inherited from the eight legacy councils it replaced. Based around SAP software, it was also designed to meet new demands for services and information, and to address obsolescence of existing systems.

However, late last year, the council announced that it was resetting the budgets and timelines for NewCore.

A breakdown of the budget changes released on Thursday showed that modifications to the business case led to a NZ$60 million increase in the overall budget, while increased quality assurance and testing program led to a further NZ$13 million blowout.

Ten fully funded IT projects outside of NewCore, totalling NZ$20 million, were also transferred into the project, while efficiency savings cut some planned costs by NZ$7 million. Future costs of NZ$25 million were also avoided.

The project was set back by a year.

The council said the extra costs will be met from within the existing council IT budget, so it will not require new funding in its long-term plan.

The documents released along with the breakdown paint a picture of governance failure and a lack of accountability within the project up until May last year. ZDNet has requested more recent reports be similarly released.

A February 2014 progress update by EY even said that the project steering committee had not agreed on what the project would deliver.

"The steering committee do not hold a consistent view around what NewCore will deliver and not deliver," the update said. "As a result, the existing detailed designs may or may not support the NewCore outcomes once set."

Project governance roles and responsibilities were unclear, and progress reporting against milestones was limited. An integrated project plan has also not yet been completed.

"The replan activities to date have so far failed to address our concerns around speed of progress, capability within the team, and output quality," EY said.

Council is now reporting that the new project plan is on time and on budget.

"When complete, the project will deliver enhanced services to ratepayers with cost savings of NZ$57.5 million over a 10-year period -- the equivalent of a third of a percent reduction in rates per year," Auckland Council chief operating officer Dean Kimpton said.

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