Services Australia shifts most Centrelink payments to SAP S/4 HANA

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Services Australia shifts most Centrelink payments to SAP S/4 HANA

Legacy system now only used for 10 percent of payments.

Almost all Centrelink payments are now being paid through the SAP-based payments platform built under Services Australia’s massive welfare payments infrastructure transformation (WPIT) program.

Chief transformation officer Charles McHardie told a senate inquiry into the current capability of the Australian Public Service (APS) that the centralised platform was nearing 90 percent of payments.

“We’re just about to touch 90 percent of our Centrelink payments being paid through that new Payment Utility,” he said on Tuesday.

Payment Utility has been built over the past three years as part of the billion dollar-plus WPIT overhaul to replace the payments capability in the legacy income security integrated system (ISIS).

Services Australia started using the S/4 HANA platform for the Tasmanian Freight Equalisation Scheme in July 2019, delivering payments in real time via the New Payments Platform.

Use of the system ramped up significantly in September 2020, when the parenting allowance became the first Centrelink payment type to be delivered through the platform.

That was followed by a second and larger payment cohort – the age pension – about six weeks later in November 2020.

In the future, the platform, which has been designed as a white-label service, will extend beyond welfare payments to other Services Australia delivery areas such as Medicare and Child Support.

With almost 90 percent of payments now being paid through Payment Utility, McHardie said the agency’s large IT workforce would soon be able to work on other SAP-based projects like GovERP.

“Shortly we’ll be able to start winding off some of the workforce that worked on the [Payment Utility] program to be able to supplement the work in the GovERP program,” he said.

Services Australia assumed responsibility for the build of GovERP earlier this month, with around 75 APS staff and 125 contractors coming across from the Department of Finance.

GovERP, which will also be built using SAP’s S/4 HANA platform, is expected to consolidate the corporate and financial systems used in six shared services hubs.

McHardie said a big factor in the government’s decision to shift the project to Services Australia was its workforce of SAP experts, which it has built up since 2017 as part the Payments Utility project.

“Services Australia now has the largest SAP workforce in the Southern Hemisphere, and we drove over 500 SAP certifications into our APS workforce… from 2017 up until now,” he said.

“That has allowed us to successfully continue to deliver SAP projects that are managed and delivered by a SAP workforce that is led by public servants, supplemented by contractors.

“And it is also one of the reasons that Services Australia was selected to lead the GovERP across government.”

McHardie added that the “blend” of APS staff and contractors working on the project would change in the coming months as staff from the Payment Utility program were freed up.

“We’ll be bringing to bear more of our APS workforce against this,” he said, adding that there were also procurements for systems integrators underway that will change the “mix”.

Centrelink entitlements engine reaches design review

McHardie also used the hearing to provide an update on Services Australia’s progress with the Pega-based entitlements calculation engine (ECE) solution that Infosys is developing.

The ECE will replace the existing solution embedded in Centrelink’s legacy ISIS, which is used to determine eligibility for welfare recipients and how much to pay them. 

Earlier this year, Services Australia renegotiated its contract with Infosys to allow for closer planning and monitoring of the build phase, which saw an existing $142 million contract replaced.

McHardie told the inquiry that the ECE build is currently in “program increment zero”, with final testing underway in the leadup to critical design review on August 13 for age pension payments.

 “Age pension is the big one that we’re focused on at the moment, and that will give us a level of surety that the calculations that have been made in the Pega ECE match what’s coming out of the old legacy ISIS system,” he said.

“So we’re sweeping across all of the use cases that sit within the age pension program to get that level of surety, so that completes on August 13.

“At the same time, the aged care build using the Pega platform is underway and we’ll commence end-to-end testing on that platform in September this year.

"Then we’ve got a full year’s worth of work before we go live in September 2022 for the entitlement calculations in the aged care program.”

McHardie added that once the ECE is proven in those two program, Services Australia would then move on to other areas such as income support payments in the Veterans Affairs portfolio.

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