IRD abandons Oracle student loans system after spending $21m
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Government department will upgrade existing FIRST system instead
By Randal Jackson | Wellington | Friday, 13 May, 2011 | 56 Comments
Inland Revenue has abandoned plans to use Oracle to deliver the legislative changes to student loans contained in the Student Loans Scheme Bill. Instead, it will upgrade its existing FIRST system.
Peter Mersi, deputy commissioner business transformation, says it became apparent during the design phase that extracting the loan history and migrating data from the old system to the new system was more complex and time-consuming than expected.
“It would not have been possible to build and populate a new system in time for important changes to student loans expected to come into effect next year,” he says.
The project to build the new system was approved by Cabinet in 2009 and begun in 2010.
“To date, we have spent $21 million out of $35 million allocated by Cabinet,” Mersi says.
“By taking action before the more expensive build phase was entered, we have managed the financial and delivery risks. It is expected that the upgrade to FIRST can be completed within the existing budget for the project.
“We will be able to use elements of the new Oracle product.”
He says the upgrade should enable legislative changes affecting students to be put in place by April 2012.
“Borrowers will be able to notice improvements, such as being able to see their total borrowings without having to contact both the Ministry of Social Development’s StudyLink and Inland Revenue.
“While the new student loans system was intended to be the first component of a new computer system for the department, the complexity of student loans made this unrealistic given the legislative time frames.”
Changes to student loans are widely anticipated in next week’s Budget.
Comments
SAP
Does Randall know that IRD already owned the SAP licenses to deliver the Student Loans functionality...so maybe he should be asking IRD to disclose the business case for spending millions on Oracle licenses when they already own software that would do the job?
[This comment has been moderated]
Posted by Anonymous at 9:21:55 on May 19, 2011
Posted by Anonymous at 9:21:55 on May 19, 2011
SAP
It's common knowledge in the industry that SAP is "sunsetting" its tax software and won't be investing further in its development. With the strength of the NZ dollar at the moment, it was no doubt an opportune time to go with an American vendor, who are known to be world class. What an embarrassment that NZ and Oz consultants couldn't get a solution working that has been implemented successfully in quite a few other places. Another symptom of the much publicised brain-drain I guess...
Posted by Anonymous at 19:30:48 on June 4, 2011
Posted by Anonymous at 19:30:48 on June 4, 2011
Who dunnit?
I bet this wouldn't have happened if IRD had only allowed NZCS members to work on the project.
What we need is some professionalism around here!
Posted by Anonymous at 12:38:04 on May 18, 2011
What we need is some professionalism around here!
Posted by Anonymous at 12:38:04 on May 18, 2011
Unbelievable
Believe it. Unfortunately, you and I will never know how much IR spend on covering up what actually (really) happened. Ala DHB's.
Posted by Anonymous at 10:36:26 on May 17, 2011
Posted by Anonymous at 10:36:26 on May 17, 2011
Doe the IRD need some new Blood?
All I can say is who is protecting whom?
Does John Key know about this? If not, why not?
We are in a Recession and Govt is wasting so much money.
Peter Dunne should do something about this.
The best thing and most cost effective solution is starting from scratch.
Posted by Anonymous at 21:09:04 on May 17, 2011
Does John Key know about this? If not, why not?
We are in a Recession and Govt is wasting so much money.
Peter Dunne should do something about this.
The best thing and most cost effective solution is starting from scratch.
Posted by Anonymous at 21:09:04 on May 17, 2011
Due system
In my dealings with IRD they have expressed the view that they wish to buy a solution not design a solution. In this paradigm they need to put out a tender and let proposals come in. However, at the same time the issue a contract for $45M (not 35) to a company that has supposedly done this before. We see no evidence of this now clearly, and now the urgency of IRD is that much greater! Wait til you see the cost of the CRM they are wanting to build Larry will buy a fleet of boats based on the figures I have heard.
Posted by Anonymous at 10:01:27 on May 17, 2011
Posted by Anonymous at 10:01:27 on May 17, 2011
Heads should Roll
If this was a commercial enterprise heads would roll.
It seems absolutely unbelieveable that cabinet approved this in 2009, and called for Submissions in June 2010 for "Making Tax Easier". Why did they not call for such submissions in 2009?
Why not use NZ expertise?
Posted by Anonymous at 23:49:24 on May 16, 2011
It seems absolutely unbelieveable that cabinet approved this in 2009, and called for Submissions in June 2010 for "Making Tax Easier". Why did they not call for such submissions in 2009?
Why not use NZ expertise?
Posted by Anonymous at 23:49:24 on May 16, 2011
NZ Govenment gives 36 million to America's Cup....
Is there a major conflict of interest going on inour country that our poor tax payers are not aware of?
How come $36 million dollars of Govt cash has been promised to Team NZ for the America's cup challenge in 2013 and at the same time the IR is sponsoring Oracle the current holder of the America's Cup to the tune of $45 million (someone has made a mistake because it has only been published as $35 million????)
Posted by Anonymous at 23:44:59 on May 16, 2011
How come $36 million dollars of Govt cash has been promised to Team NZ for the America's cup challenge in 2013 and at the same time the IR is sponsoring Oracle the current holder of the America's Cup to the tune of $45 million (someone has made a mistake because it has only been published as $35 million????)
Posted by Anonymous at 23:44:59 on May 16, 2011
Meanwhile in the Australian private sector
"The Commonwealth Bank has revealed how customers might experience the benefits of its $1.1 billion core banking technology upgrade. The upgrade, based on SAP software, began in mid-2008 and was originally estimated to cost only $580 million."
http://www.itnews.com.au/News/256341,cba-goes-real-time-as-part-of-core-banking-upgrade.aspx
Posted by Anonymous at 17:22:21 on May 16, 2011
http://www.itnews.com.au/News/256341,cba-goes-real-time-as-part-of-core-banking-upgrade.aspx
Posted by Anonymous at 17:22:21 on May 16, 2011
Where's the accountability ?
This should be a headline in NZ Herald, seems it's the only way to get some kind of accountability from govt departments blowing away taxpayers money these days.
Posted by Neil at 12:20:25 on May 16, 2011
Posted by Neil at 12:20:25 on May 16, 2011
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