Nothing to see here: Auckland Council hits another SAP milestone

Published on the 30/06/2016 | Written by Donovan Jackson


Auckland council newcore go-live

40 percent of Auckland services are now being delivered on NewCore, with the project's $157 million budget on track…

Rodney, Waitakere and the North Shore ratepayers barely raised an eyebrow after their customer service information was quietly migrated to the new platform on 7th June. That puts services for around 40 per cent of the city on to the new platform, with the balance expected to shift away from the legacy systems inherited by the Super City from the previous councils within the course of the next year.

Getting to this point hasn’t been easy, nor has it been cheap. This is, after all, an enterprise project which Sue Tindal, Group CFO, described as “Probably the biggest SAP deployment this country has ever seen.” Kicked off in November 2012 with an original budget of $71 million, NewCore underwent a major review in 2014 which saw the budget revised upwards to $157 million.

The good burghers of Auckland were, understandably, up in arms.

Be that as it may, the variance wasn’t entirely unexpected nor unprecedented. Large scale ERP projects are notoriously difficult, to the extent that they even occasionally imperil business itself. Certainly there has been no shortage of vocal opponents to the project from mayoral candidates to open source advocates. However not many consider the complexity and risk associated with getting things done in large enterprises, regardless of the software.

That doesn’t mean variances should be accepted lightly. Asked if they get up in the morning and go to work with the intention of adding a few million to their budgets, Tindal, her colleagues Paul Tombleson (NewCore programme director) and Mark Denvir (ICT director) said ‘of course not’. Nobody likes having to deal with the fallout of revising budgets in the wrong direction.

The numbers, however, are eye-watering. The total operating cost for Auckland Council’s IT function runs at around $80-90 million per year, while the capital costs, a large chunk of which currently relate to NewCore, hit $77 million last year. It’s an environment where $157 million can evaporate quite quickly.

In what must have been a pleasing turn of events, Council recently announced that it pegged back the cost of the SAP licensing component of the project by a not-inconsiderable $33-million, although Tindal does point out that this includes ongoing costs over the next decade. “To be totally correct [this] is not solely reducing the cost of NewCore – it means savings in the context of our ICT operating costs over the next 10 years,” said Tindal. The deal still leaves ratepayers with $9.2 million per year just to cover the SAP component of NewCore’s software licensing.

NewCore programme director Tombleson explained that this particular go-live milestone is in fact the fourth, but the most significant to date for the project. It sees customer service information – that’s things like licensing, processing and collecting rates and the billing of other financial interactions with customers, along with consenting activities – going on to the NewCore system. “It affects around 200,000 properties,” he said.

It’s been a good three weeks according to Tombleson – things have gone smoothly; he credits that to the refresh in governance structure including independent quality assurance with EY and key vendors including Deloitte and SAP, as well as a heightened focus on data migration from the legacy systems. Indeed, he said, the attention paid to data ‘cleansing’ meant that of 3.2 million records loaded, just 300 failed. “That is pretty rare,” volunteered Tindal.

Perhaps the big question is whether or not ratepayers see any difference in service delivery. “We’re consolidating, simplifying and standardising,” Tindal continued. “At this point, the difference for ratepayers won’t be huge, but they will notice consistency of experience from council in the first areas now live on the system.”

Chipping in, Denvir said ratepayers can expect far better service as ‘empowered’ frontline Council staff are better able to respond to requests. “Previously, a simple query may have required accessing 5 or 6 systems to get an answer. Now, staff can go straight to the source of the information. That drives up quality of service and means less margin for error.”

That may seem like small potatoes for the money spent, but the reality is that a consolidated system underpinning service delivery starts with sound foundations. Those foundations are practically invisible to ratepayers, particularly in the earlier stages of the project, but they establish the base from which a digital transformation strategy can be executed. In the case of Auckland Council, that means providing ratepayers with multiple self-service channels through which they can transact. Added Denvir: “It is about convenience and it is about making digitisation of services, in the longer run, much easier.” Also, for the fast-growing Super City, a platform capable of scaling to meet demand is essential.

Furthermore, said Tindal, “A lot of the work [on the foundations] is also about de-risking, through the elimination of multiple and, in some cases unsupported, systems.”

She agreed that with apparently little to show for ratepayers, keeping them onside is a challenge. However, in due course, as the system continues its rollout, evidence of changes will become more apparent.

Questions or comments...

  1. Mr Fear of being flamed

    As a provider of NZ based mobility solutions, I’ve been witness to what I can only say, is total incompetence with making decerning IT decisions at AC IS departments. I’ve had to watch, as we ratepayers pay the price for negligent management. That would rather resign contracts for foreign solutions, that at best, are unreliable! when NZ based solutions are available at fractional pricing that is proven to be a better fit. We are talking hundreds of thousands here.

    It seems to stem from senior management, and filtered down to employees that won’t or fear taking responsibility for doing more than their 100% defined job description and then not communicating options to management.

    I’ve seen them purchase solutions that totally don’t fit their/our requirements, then less than a year later ditch it for something else. I could go on with this rant. I’m more than qualified to make these statements and it just exasperates me.

    Reply
  2. martin

    “However, in due course, as the system continues its rollout, evidence of changes will become more apparent.”

    Such as ???????

    Reply

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