Qld Health's new ERP system faces funding shortfall

Queensland Health’s second attempt at replacing its long out-of-support ERP system faces the prospect of falling into the red due to complications with integration and change management.

The new SAP system, which was due to be up and running last month, has also come up against delays, though the department is still convinced it can deliver the project by the end of this year.

The department has been working on the $105 million financial system renewal project (FSR) since December 2016, after aborting its $36 million first attempt to replace the system in 2014-15.

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), which has been out of support for a decade.

It will see the department and all 16 hospital and health services across the state 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.

The new platform was meant to be ready by August, after the project moved to configuration of the full business, finance and logistics solution earlier this year.

Staff were then expected to transition to the new system towards the end of 2018.

But the state’s IT projects dashboard now indicates the system won’t be ready in time due to integration and change management concerns.

“The project is reporting ‘red’ due to schedule delays and an anticipated funding shortfall associate with integration complexities and change management activities required,” the most recent update on the IT dashboard states.

“A change request is progressing to address these concerns with an outcome anticipated in August 2018.”

While no update has been posted to the dashboard since June, a spokesperson declined to comment on the status of the change request or nature of the complexities involved.

“While large, complex system projects are carefully planned and managed, there will always be instances where emerging issues or additional work can only be identified once a project has commenced,” the spokesperson said in response to questions from iTnews.

“That’s why projects like FSR are regularly reassessed and scope, costs, or timelines re-examined where necessary.”

The spokesperson said the program is currently on track for delivery this financial year.