'Supercity' IT spending revealed, SAP the big winner

A new transparency report reveals a lot about how and where Auckland Council is spending its IT budget -- and about its blown-out NZ$157 million NewCore project.

A new transparency report is shining a light on Auckland Council's major contracts, including IT spending on a complete system replacement based around SAP.

The report (PDF) reveals the so-called Auckland "Supercity", an amalgamation of eight former local councils into one, spent NZ$21.6 million with SAP in the nine months from July 1, 2014, through March 31, 2015.

The council's next largest IT supplier was Dimension Data, which received NZ$7.3 million, followed by Spark-owned cloud and datacentre provider Revera, which was paid NZ$7 million.

Auckland Council is totally redeveloping its IT environment in a project called NewCore, which began life in 2012 with a budget of NZ$71 million, but is now forecast to cost NZ$157 million.

Executives told media last November the additional costs would be met from within the council's existing IT budget.

When that blow-out was announced, the council said it had "reset" the NewCore project. It has now emerged that as part of that reset, SAP's head of global service and support in Australia and New Zealand was added (PDF) to the executive steering group. SAP architects are also included in the NewCore design authority.

Grim: Auckland Council executives front media late last year to announce a cost blowout in the NewCore project. They said the additional costs would be met within the council's existing IT budget.

NewCore aims to simplify and standardise the council's business processes, and to replace legacy systems for customer interaction, rates, regulatory services, and property data to enable further development of digital solutions.

"NewCore is one of the most significant projects that underpins organisational transformation," a further document (PDF) released on May 26 said. "It enables the future radical transformation of key customer-facing services while also reducing the cost to serve each customer.

"The annual benefits of NewCore are in excess of NZ$10 million annually when the project is completed."

While the council said the reset project is on course, a key risk is meeting a go-live date for the new rating system, originally scheduled for the middle of this year, but now postponed until mid-2016.

"A number of key outputs from the reset phase address this risk as the impact of missing the June 16 go live are significant," the council said.

"Our next available go-live date would be June 17. The outputs from Reset include the continuation of the independent quality assurance through EY, updated governance structure, adoption of the agile methodology for Property and Consents, change in the key vendor engagement model, and the extended test window to help mitigate this risk."

However, NewCore is just one project among many at the council covering new desktop systems, datacentre consolidation (to Revera), and other implementations of SAP as the council's new operating platform.

Disaster recovery also has to be addressed as a separate project.

Another report (PDF) released today reveals details of contracts inked over the same nine-month period. In addition to providing professional services, SAP was awarded work implementing its HANA database management system and its Hybris e-commerce platform.

SAP also won work replacing the council's property, land information, and consenting systems.

Dimension Data worked on the council's library systems, Microsoft Exchange migration, and network -- including implementing Citrix NetScaler.

Another major beneficiary of council IT spending was recruitment company Absolute IT, which was paid NZ$4.9 million during the reporting period.