NSW project 9 yrs late, $23m in red

A New South Wales government project to simplify licence processes used by various government agencies is nine years behind schedule and $23 million over budget, according to the NSW Auditor-General.

Some agency personnel believe they are not obliged to meet implementation timeline/schedule targets.

Department of Services, Technology and Administration

The project was intended to replace over 40 different licensing systems with standardised systems for over 20 agencies which issued licences other than driver's licences: for example, recreational fishing, liquor, firearms or even dairy farming licences. There are over 300 different licence types.

The project started in 2001 under the aegis of the Office of Information Technology in the Department of Information Technology and Management (now part of the Department of Services, Technology and Administration), with a deadline for completion of 2005. Its budget was $63 million.

It is now expected to be completed in 20013/2014 and its budget has blown out to $86 million. The gross benefits have also been scaled down, which has seen the net benefits of the project dip from $69 million to $19 million.

"It is now nine years late, $23 million over budget, and will return less than one third of the original estimated net savings," NSW Auditor-General Peter Achterstraat said in a statement.

The new systems have been implemented in six agencies so far, replacing 15 out of 42 legacy systems and consolidating 102 licence types to 55. The agencies — the Departments of Fair Trading, Primary Industries, Environment and Climate Change and Community services as well as the Office of Liquor Gaming and Racing and NSW Health — are responsible for 1.7 million licences out of the around four million licences intended to be touched by the project.

This number has inflated since the project first started, with only around two million licences initially planned for inclusion in the project. Despite the ambitious scope change, the original business case hadn't specified whether agency participation in the project would be mandatory. This lack of communication meant that agencies felt that they had a choice as to whether they wanted to adopt it or not.

The agencies' reluctance to adopt the systems was one of the reasons given by the Department of Services, Technology and Administration for not succeeding to get the project completed on time. "Emotional attachment to legacy systems ... some agency personnel believe they are not obliged to meet implementation timeline/schedule targets ... averse to risk and change ... higher duties allowances for some project staff reduces incentive to go-live," the department listed in its reasons for not succeeding.

The Auditor-General also believed that the time frame had been overly optimistic to start with. In fact, the development of the system by the external service provider was not completed until 2005, the year the project had been expected to finish.

Despite the delays and cost blowouts which beset the program, the Auditor-General found that many benefits had been realised, such as reducing red tape and reducing costs for agencies — by replacing legacy systems agencies have avoided $51 million in tendering, system replacement and maintenance costs.

He recommended that the Department of Services, Technology and Administration clarify which agencies had to adopt the systems, discover how much exactly the rest of the project was going to cost, improve risk management and develop better measures to follow project progress. He also called on the agency to publicly report its progress each year.

The department responded, agreeing that the original time frames underestimated the scope of reform. It said that governance structures had already been put in place after early slips in the schedule and that these changes should address the underlying problems that hindered the project.