NBN forced to spend big to overhaul inadequate IT systems

The cost of replacing an inadequate workforce management system contributed to a blowout in NBN’s IT capital expenditure budget, the network builder has revealed.

‎NBN chief network operations officer JB Rousselot.

During a recent senate hearing, ‎NBN networks boss JB Rousselot said the company's IT capex had increased from $900 million to $1.6 billion in the three years prior to the December 2013 revised strategic review.

The blowout was caused by some of the NBN's initial systems being unable to scale up for the rollout, an issue uncovered as part of a KordaMentha review of corporate governance at NBN.

“That [IT capex increase] was based on an independent assessment that was made of the OSS (operations support systems) and BSS (business support) systems at the time,” Rousselot said.

“We came to the conclusion that while some of [the systems] were adequate to deal with the volumes that were at the time, they would not be adequate to support the higher volume data down the track.

“The figure of $1.6 billion under the revised outlook was based on an independent assessment of the maturity and the volumes that the platforms would be able to cope with.”

Rousselot went on to describe how a workforce management system deployment had contributed to the cost blowout.

“An example of this right now is that we’re developing and deploying a new work and workforce management system, because [the existing system] couldn't cope with the volumes that we have,” he told the hearing.

On top of the IT capex cost blowout, Rousselot said there was an additional cost of between $180 million and $290 million associated with adding support for fibre-to-the-node and HFC to NBN’s existing IT systems.

Not the first choice

iTnews understands that during the early stages of the rollout, NBN relied on a temporary system developed in-house system until a permanent solution that could scale with the rollout was found.

In an initial assessment, NBN staff recommended using a workforce management system from an Israeli vendor called ClickSoftware.

The recommendation was passed on to then-chief executive Mike Quigley, but was rejected by then-Communications Minister Stephen Conroy.

Instead, in September 2012 NBN awarded the contract to rival bidder Quintiq, now owned by a vendor called Dassault Systèmes.

While the value of the agreement has not been publically disclosed, a statement released by Quintiq at the time described it as a “multi-million dollar agreement” for advance planning and scheduling software.

"[Quintiq] can generate demand-based rostering scenarios which allow planners to visualise award constraints and violations as well as project costs,” the announcement said.

“The software will automate the payroll preparation process into the Frontier Chrispay Payroll system."

Problems emerge

But despite promises, Quintiq was not integrated with other key systems run by NBN, and the scenario visualisation system failed to live up to expectations.

The workforce management system was also unable to adequately scale up, and became a contributing factor to delays in the rollout of services. By March 2013, the NBN had downgraded the number of premises it expected to pass with fibre by the end of June to between 190,000 and 220,000.

However, despite concerns raised by staff about the performance of Quintiq, senior NBN staff opted not to take action.

The decision to phase out Quintiq was eventually taken as a result of a 2014 review of the NBN’s IT systems, which found there was an urgent need to overhaul the organisation’s workforce management system.

The NBN is currently in the process of migrating from Quintiq to IBM Maximo for enterprise asset management, along with Oracle’s TOA ETAdirect for field service management.

Dassault Systèmes declined to comment for this story.

An NBN spokesperson confirmed the network builder had implemented the new systems, but declined to discuss the costs involved with the decision.

“We have selected IBM Maximo and Oracle TOA to support us in the field. But we will continue to use Quintiq for specialised functions across the business,” the NBN spokesperson said.

“The timing of any required transition is commercially sensitive.

“The decision results from our 2014 review of current and future state IT around the transition to the multi-technology mix.”