QLD Govt contributed to payroll project 'death spiral'

Poor decisions made by the State Government during the Queensland Health payroll project contributed to its bungled delivery in 2010, the commission of inquiry investigating the project has heard.

The inquiry is currently investigating governance and project management issues with the failed project, and yesterday heard from Dr David Mansfield, who was appointed by the inquiry to assess the Queensland Health payroll system as proposed and delivered by IBM.

“Under the pressure to deliver, poor decisions were made by the State contributing to a project "death spiral" where an immature system (software and processes) was taken through unsatisfactory parallel stages and cycles of testing and UAT to meet a time imperative,” Mansfield wrote in his report to the inquiry.

The failed project rollout, which will ultimately cost taxpayers $1.25 billion, resulted in more than 35,000 payroll anomalies after going live in March 2010.

Under questioning during yesterday’s hearing, Mansfield said IBM underestimated the work required to complete the project, however a two-week period assigned to define a major statement of work was insufficient.

“Personally I would say that’s too short and hence it would have been prudent to have a checkpoint somewhere in that process to say: ‘Where are we guys, have we got enough?’,” Mansfield testified.

“There are always critical dependencies on the customer, and to pretend otherwise is foolish,” he said.

Mansfield’s report summarises what he saw as the major problems of the project, including:

• The baseline scope was established too late
• IBM was diligent but did not properly deliver a solution of sufficient quality, exacerbated by scope uncertainty and churn
• Under continual time pressure, poor decisions were made by the State within its governance process affecting its people, solution quality and time.

“Governance processes are owned by the customer and the State did not use its governance processes well,” Mansfield wrote.

“Poor decisions were made under the intense pressure of the time imperative. All these decisions were reactive in nature.”

Mansfield told the inquiry a common view of scope was never achieved by the two organisations, and nobody inside the State Government was asking what was causing the ongoing change requests delaying the project.

He said there was no sign that those involved were exploring the need to approach the project differently.

“The culture was such in the project that a Plan B could not be contemplated,” Mansfield told the inquiry.

Earlier in the week, inquiry head Richard Chesterman QC questioned former Public Works associate director Natalie MacDonald, over her decision to authorise an additional $9 million payment to IBM despite ongoing project delays.

Chesterman asked if a fear that the existing LATTICE payroll system could collapse at any moment meant no matter what IBM proposed the State had to accept it.

MacDonald denied this was the case, arguing it was not always clear that it was IBM causing 
some of the ongoing changes delaying the project.

“There were changes all through this that were being 
requested by Health, there were delays that were being 
caused not by IBM but by the three parties (Queensland Health, CorpTech and IBM),” MacDonald testified.

“It wasn't clear, you know, sort of that there was always a legal recourse, if you like, to kind of work those issues through and we were trying to get a workable payroll system in place.”

The inquiry continues.