NSW Education faces continued SAP concerns

Updated: First phase deployments slip two years.

The first phase of an eight-year SAP rollout by the NSW Department of Education and Communities is expected to cost nearly $57 million more than initially envisaged, according to the state's Auditor-General.

But the project black hole is likely to be reduced to $15 million over the length of the project, after a replanning of the initiative revised the second stage's $218 million budget to $176 million.

The department spent $176 million on the Learning Management and Business Reform project, now in its fifth year. It is expected to cost $386 million once completed.

The project intends to replace all finance, human resources, payroll and student administration systems for schools, TAFE colleges and department staff with SAP.

It is designed to make resources more readily available to teachers and improve administrative processes.

The first phase of the project, covering department-wide finance and HR/payroll for TAFE NSW has been running since 2006, with some projects slipping two years past their initial implementation date. Its initial budget of $153 million had since been revised to $210 million.

NSW Auditor-General Peter Archestraat raised concerns the project could face slippages without proper guidance.

Rollouts for payroll systems to TAFE NSW and finance systems for public schools remain incomplete and without timeframes, despite being "built", according to the report [pdf].

Archestraat said deployments in the first stage of the project "did not provide all expected benefits to the business".

Department staff had been provided with inaccurate or irrelevant information since use of the system began in March last year and some had begun using manual workarounds for the finance systems, according to the report.

"The Shared Service Centre did not have the required skills, resources and knowledge to
fully support the system," while users were not properly trained, the Auditor-General said.

Stage two 'viable'

 The remaining four projects, covering HR/payroll for the rest of the department and student administration systems at schools and TAFE NSW will be piloted by late next year under stage two of the project. Trials had initially been planned for this year.

After slipping timeframes in the first phase, the department refocused the second stage with former EDS consultant Michael McMahon appointed to manage the project in January.

McMahon was appointed at approximately the same time as the department's new CIO, Stephen Loquet.

McMahon undertook a six-week "replan" of the project, including meeting with school principals and other stakeholders to understand the issues with the project.

In internal communication with department staff, McMahon maintained the project remains viable, as department staff "just needed to regain our focus".

"The original objectives of LMBR are still one hundred percent valid," he said in a department-wide newsletter in July.

A spokesman for the department said the issues were a natural part of the rollout.

"In any complex large programs of this type, it is prudent to carry out a review and take advantage of emerging technologies and leading educational practices," they said.

"The result is the systems we roll out will be better and suit the needs of our students, teachers, principals and wider community."

McMahon maintained staff would be properly train in the new systems to ensure the department did not face similar problems.

As part of the replan, stage two implementation would be overseen by a single "transformation service provider".

The department has continued to negotiate with shortlisted bidders for the project. Internal communication with department staff suggests the tender is "well advanced".

A current organisation chart, sighted by iTnews, shows the department is yet to appoint two of three executives expected to report to McMahon.

A spokesman said relevant executives and the tender would be finalised before the end of the year.