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
Those software license?
Now that IRD has their $21 million dollars worth of software licenses to account for, I wonder how much extra Oracle will charge them when they go back cap-in-hand asking if they're allowed to assign the licenses to another organisation.
Experience of software license from these failed projects is once the license is paid for, you're stuck with them, even if they're never used again by anyone.
Someone in Govt might want to think about that problem in future.
Posted by Ard Righ at 11:29:26 on May 16, 2011
Experience of software license from these failed projects is once the license is paid for, you're stuck with them, even if they're never used again by anyone.
Someone in Govt might want to think about that problem in future.
Posted by Ard Righ at 11:29:26 on May 16, 2011
Unbelieveable
Except, it isn't!
What about the head of IT and the Project Manager in all of this? Do they get away scot free?
Or were they simply following orders from higher up about which software platform should be chosen for the system.
You cannot spend $21m and then shelve a project without an uproar in this day and age when government is screaming for fiscal responsibility. It works both ways...I reckon the inquiry should be short and sweet - start by firing the idiots that allowed this to happen.
Posted by Anonymous at 8:36:50 on May 16, 2011
What about the head of IT and the Project Manager in all of this? Do they get away scot free?
Or were they simply following orders from higher up about which software platform should be chosen for the system.
You cannot spend $21m and then shelve a project without an uproar in this day and age when government is screaming for fiscal responsibility. It works both ways...I reckon the inquiry should be short and sweet - start by firing the idiots that allowed this to happen.
Posted by Anonymous at 8:36:50 on May 16, 2011
huh?...
What is so difficult about extracting data and loading it into another system?
Is this article supposed to be pointing the blame at Oracle? It seems to me that IRD should be where the blame rests.
Posted by Anonymous at 8:14:25 on May 16, 2011
Is this article supposed to be pointing the blame at Oracle? It seems to me that IRD should be where the blame rests.
Posted by Anonymous at 8:14:25 on May 16, 2011
huh?...
IRD's internal data structures are phenominally complex so this isn't just a simple ETL job. Oracle was the wrong product to go with full stop and cutting over from FIRST should have been attempted with something considerably simpler than student loans.
Posted by Anonymous at 8:29:58 on May 16, 2011
Posted by Anonymous at 8:29:58 on May 16, 2011
bad decisions...
Well, someone obviously made a really bad decision if Oracle was the wrong product to use in the first place.
Well, at least someone at the top killed the project before it gobbled up even more money.
Posted by Anonymous at 15:15:44 on May 16, 2011
Well, at least someone at the top killed the project before it gobbled up even more money.
Posted by Anonymous at 15:15:44 on May 16, 2011
huh?...
... speaks someone who clearly has only one view of the platform. NZIR is known around the world for having one of the simplest tax systems ever built. Sounds like you have worked there for a long time, and are working under the false impression you work with a complicated solution! You should see the likes of HMRC or ATO.
"Huh" is right - from what I've heard, the IT shop over-complicated this to the point where they got what they wanted: job security by being the only people who can nurse their obscure 15 year old mainframe along...
Typical. Some of our profession don't seem to grasp that IT is all about change. Embrace it or become obsolete.
Posted by Anonymous at 10:14:04 on May 16, 2011
"Huh" is right - from what I've heard, the IT shop over-complicated this to the point where they got what they wanted: job security by being the only people who can nurse their obscure 15 year old mainframe along...
Typical. Some of our profession don't seem to grasp that IT is all about change. Embrace it or become obsolete.
Posted by Anonymous at 10:14:04 on May 16, 2011
huh?...
"Typical. Some of our profession don't seem to grasp that IT is all about change. Embrace it or become obsolete."
Couldn't agree more, and I should know ... have personally experienced 7 years working within the famous IR IT shop!
The well known, and often echoed mantra through the IT hallways is .... "That's the way we do it around here" ... which is usually the response to 'why are you doing that outdated, obsolete, ridiculously over complicated process?'
$21m ....and that's just the project that made it into the headlines, what about the ones that don't? this isn't an uncommon occurence ...food for thought
Posted by Anonymous at 13:04:21 on May 17, 2011
Couldn't agree more, and I should know ... have personally experienced 7 years working within the famous IR IT shop!
The well known, and often echoed mantra through the IT hallways is .... "That's the way we do it around here" ... which is usually the response to 'why are you doing that outdated, obsolete, ridiculously over complicated process?'
$21m ....and that's just the project that made it into the headlines, what about the ones that don't? this isn't an uncommon occurence ...food for thought
Posted by Anonymous at 13:04:21 on May 17, 2011
huh?...
".. speaks someone who clearly has only one view of the platform."
"Sounds like you have worked there for a long time, and are working under the false impression you work with a complicated solution"
Those would be an assumptions, and a faulty ones at that. As we all know, faulty assumptions make for poor analysis. Poor analysis results in poor choices and poor choices result in budget blow outs.
Posted by Anonymous at 11:27:02 on May 16, 2011
"Sounds like you have worked there for a long time, and are working under the false impression you work with a complicated solution"
Those would be an assumptions, and a faulty ones at that. As we all know, faulty assumptions make for poor analysis. Poor analysis results in poor choices and poor choices result in budget blow outs.
Posted by Anonymous at 11:27:02 on May 16, 2011
The Real Problem
The real question here is why government projects seem to fail so often. A few Oracle staff built them a working proof of concept using their product in six weeks.
Having seen it working, IRD bought the software licenses and said they would run the project themselves (probably because the Deloitte-run Kiwisaver project ended up costing 3 X what they expected - $75m).
Let's be honest: it wouldn't have mattered what product they bought. They have no staff with any experience of these types of projects. It was always going to turn out like this.
Posted by Anonymous at 16:20:44 on May 15, 2011
Having seen it working, IRD bought the software licenses and said they would run the project themselves (probably because the Deloitte-run Kiwisaver project ended up costing 3 X what they expected - $75m).
Let's be honest: it wouldn't have mattered what product they bought. They have no staff with any experience of these types of projects. It was always going to turn out like this.
Posted by Anonymous at 16:20:44 on May 15, 2011
The Real Problem
What proof do you have that the rate and scale of failure of IT projects in public service organisations is any different from that of other organisations - isn't it just the level of visibility that is different.
While I can't quote any reputable study, my impression of 30+ years in IT is that both private and public sectors have examples of IT project failures. e.g. I know of IT project write-offs by australian banks in the 100's of millions of dollars - most of which have been reported in the press over the years if you care to research it.
Posted by Anonymous at 9:40:46 on May 16, 2011
While I can't quote any reputable study, my impression of 30+ years in IT is that both private and public sectors have examples of IT project failures. e.g. I know of IT project write-offs by australian banks in the 100's of millions of dollars - most of which have been reported in the press over the years if you care to research it.
Posted by Anonymous at 9:40:46 on May 16, 2011
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