Qld Health injects $30m more into hungry new ERP system

Integration and change management complications have forced Queensland Health to funnel another $30 million into replacing its long-out-of-support ERP system.

The new funding for the financial system renewal project (FSR) was approved by the department last December after a business case change request was issued in July 2018.

It brings the total cost of the project to $135.4 million - $109.4 million of which has so far been spent - since the department began its second attempt at replacing the system in December 2016.

The project is intended to replace the department’s heavily customised, 20-year-old SAP R/3 4.6 ERP suite known as the finance and materials management information system (FAMMIS).

Queensland Health and all 16 hospital and health services (HHSs) across the state will eventually move to a new on-premises version of SAP’s S/4HANA solution, which will interface into the agency’s now-stable SAP payroll system, previously the subject of a blistering state Royal Commission.

It is the second time the agency has attempted to replace the system, after aborting a $36 million upgrade effort in 2014-15.

The platform was originally slated to be up and running last August, with staff expected to transition to the new system towards the end of 2018.

But facing “delays and an anticipated funding shortfall”, the department submitted a change request in July to address the complications with integration and change management.

A spokesperson told iTnews the additional funding would be used to “ensure a smooth transition to the new system - across the state”.

“This is enabling more work to be done to support each HHS and the department through the transition and implementation process,” the spokesperson said.

“As with the transition to any new system, ensuring staff are supported through the change is the number one priority.”

The program is still expected to be delivered this financial year, with staff to begin using the new system from July.

An audit report into the public health sector released earlier this week said the delay would allow for “change management processes to be implemented and better integration between other systems and S/4 HANA”.

But the state’s audit office said the new system would require the department and HHSs to “re-align their process and internal controls framework to the new system”, as well as migrate and cleanse data.

A project team has been set up by the department to “map key functions and their related processes and controls”.

The project is currently tracking green on the government’s IT dashboard.