NSW govt hires consultants to help stop IT project blowouts

The NSW Baird government has hired consultants to develop a best-practice framework for handling ICT projects following the long-running fiasco of the Education LMBR overhaul.

NSW Premier Mike Baird.

The Australian arm of Boston Consulting Group was recently awarded the contract, which has an estimated value of $863,500 for just over three months to March 30.

It has been asked to develop a "strategic, whole-of-government framework for best practice ICT project delivery" for the NSW government.

This will provide clear guidance for ICT investments focusing on state priorities, and will improve the identification of benefits as well as the management and reporting of funded projects, the state said.

The best-practice framework will aim to increase the proportion of ICT projects being delivered on scope, time and budget, and reduce risks from multi-year, multi-phase technology endeavours, the contract notice stated.

BCG has consulted for the NSW government numerous times in the past, including for a 2010 expenditure review of the Department of Education and Training (DET). 

In the DET report [pdf], BCG suggested the $579 million LMBR overhaul "appears to provide a good platform for the future".

"LMBR will provide a streamlined system allowing more efficient finance, HR and payroll processing," as it addresses a number of issues associated with existing, old and fragmented systems, BCG said.

BCG advised that under the existing business case in 2010, the LMBR would provide a cumulative payback of $80 million after 15 years, and that the platform might be able to generate further savings for DET.

The LMBR overhaul has been an ongoing headache for the state government.

The project was established to replace legacy finance, human resources, payroll and student administration systems across the department, TAFEs and 2230 public schools.

It was scheduled to be delivered over eight years for $386 million, but has since blown out to $579 million and has only been introduced so far in part to 229 pilot schools.

The department recently opted to split the rollout into two, delivering the finance and student admin functions to most primary schools in term two of this year, and high schools in September next year. 

The HR and payroll functions will still need to be tested before they can be deployed.

NSW auditor Grant Hehir has attributed the cost blowouts and the timeline delays to changing requirements and scope, a "high level" of uncertainty in business cases, governance weakness, and lack of program and contract management.