Published on the 19/09/2014 | Written by Newsdesk

While ICT election promises are less than bold, one thing is clear – the Government will have a significant impact on the sector as IRD, MSD and ACC all get major ICT projects under way, and SAP is one vendor gearing up…

The elephant in the city is the Inland Revenue ‘Business Transformation’ project that is in the opening stages of a $1.5 billion project to be delivered over the next 10 years – the largest public sector IT project ever in New Zealand. ACC has also announced that Accenture has been signed up as its vendor for a three-year transformation programme called Shaping Our Future. And the Ministry of Social Development is embarking on a major system change in the next three years too.

The growth potential has not been lost on SAP and its partners. IRD currently runs SAP. CapGemini is leading the initial business analysis phase within the IRD, and is one of two vendors (Accenture is the other) shortlisted to deliver the project that SAP is hoping will be centred around its industry solution. It has had a Wellington base for many years but this week opened a new office in capital.

The company says its new offices represent “an incremental investment of $10 million over five years to accommodate new staff and a growing business”. The company intends to grow its New Zealand employee base by 19, more than 20 percent, by 2017. SAP New Zealand had in excess of 30 percent growth in 2013, and expects that to continue as it targets organisations in the mid-tier with its newly released ‘Business One’ product which provides licensing costs more suitable to the market.

Finance Minister Bill English, who opened the new office, told the audience that the Government (under National, of course) will be investing heavily in modernising the systems that support government departments.

Specialist SAP solutions and consulting company UXC Oxygen has also signaled its confidence in the Wellington market with two new ex-SAP appointments. It recently appointed a new sales executive (Lloyd O’Keefe), and this week announced the appointment of Mike Smith, a former senior executive at SAP USA, and a native Kiwi, to the position of practice manager. He will be responsible for growing UXC Oxygen’s business in Wellington’s Government sector as well as looking after customers in the Southern region (lower North Island and South Island).

Smith, who spoke to iStart on day eight of his new appointment, said that until now UXC Oxygen has traditionally focused on its Auckland market in New Zealand, so the business in Wellington is “probably a little underdeveloped”. He said, however, that there’s no lack of opportunity in Wellington with a number of strong SAP players in the Wellington market and quite a few things going on with large government departments at the moment. “My role is to really grow the business in this market,” he said.

“ACC is going through transformation, we’ll see it at Inland Revenue and I’m sure there will be others. It’s all part of the modernisation that the Government needs to go through,” he said.

UXC Oxygen is currently working with the EQC on an SAP cloud project and Smith said that he is expecting to see more of this type of project work – a change from the “staff augmentation” engagements of the past. Asked if SAP will be part of the IRD project, he said it was too early on in the process to know, but his understanding is that IRD will appoint the lead consulting partners first, before finalising the technology. Smith has worked on a number of state-level tax and revenue reform projects in his role as a consulting director at SAP USA and, based on his experience there said that SAP has a robust solution around tax processing components and would make a solid building block for IRD’s tax and revenue solution. He added that there may also be existing systems already developed by Inland Revenue that may coexist or be replaced by SAP or other technologies.

Smith, who has been away from New Zealand for 15 years, noted how much the Wellington market had changed in that time. “It’s gone from a big-five-focus model in the late ’90s and early 2000s to more of a second-tier systems-integrator model and that’s where we’re growing,” he said, adding that he still sees the early adopter philosophy in New Zealand.