Delay in big payroll job questioned

CLAIRE ROGERS
Last updated 05:00 13/06/2011

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An Auckland payroll company has questioned the handling of a $62.7 million education payroll software overhaul that has been delayed for two years.

The Novopay project – on the Government's watchlist of high-risk projects – has been pushed back twice because of problems configuring the software for New Zealand's education system.

Noel Reid, chief executive of AMS, said it appeared the project's complexity had been underestimated and he suspected the Education Ministry may not have put enough emphasis on ensuring Australian supplier Talent2 had the track record to handle it.

"Any system that needs huge tailoring has got to be questioned a bit as to whether it's going to fit properly."

Mr Reid acknowledged the project was challenging.

New Zealand's health and education payroll systems had to take into account various and complex factors to determine how much people should be paid, and were "about as hard as it gets anywhere in the world".

Fiona McTavish, the ministry's workforce group manager, said the ministry conducted a rigorous tender process and independent reviews had supported its decision.

"Talent2 was selected because it met all of the ministry's criteria for service and benefit realisation. A key feature of the Talent2 contract is that it will provide a high level of support. Schools will receive a modern, future-proof payroll service rather than just a payroll system."

Talent2 referred all queries to the ministry.

Mr Reid said AMS registered its interest in being involved in the project but had not bid for the contract.

The cost of the Novopay project was very significant, he said.

"Once you've spent a lot of money, it's very hard to cut and run. You might end up with 10 years worth of second-best. We don't want to be the guys sitting around and criticising everyone else but people should perhaps learn from this. People seem to have to keep relearning these lessons."

Mr Reid said those lessons would be valuable for Health Benefits, the agency charged with consolidating back-office services for district health boards, which he expected would move to one or two payroll systems for all DHBs.

DHBs currently select their own payroll systems and AMS software was used to pay about half of the public health workforce, he said.

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- BusinessDay.co.nz

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