CorpTech highlights shared service problems

"CourierMail
Overpaid Health staff to keep funds
From: CourierMail
July 13, 2010
HALF of the Queensland Health staff overpaid by a troubled payroll system will get to keep the money, Health Minister Paul Lucas will announce today.
Alternatively, you can copy and paste this link into your browser:
http://www.couriermail.com.au/money/money-matters/overpaid-queensland-health-staff-to-pocket-extra-funds/story-fn3hskur-1225891366773"

CorpTech highlights shared service problems


By James Riley

Tuesday, 13 July 2010 23:00

IT Policy - Government Tech Policy

Even as Queensland Premier Anna Bligh today issued the terms of reference for an inquiry in the state’s CorpTech shared services vehicle, experts have warned that centralised technology services platforms can add an additional layer of complexity to operations and need specific governance strategies to be successfully managed.

Despite the availability of robust generic software packages and an abundance of governance methodologies available to keep projects on track, traditional tyechnology projects like payroll implementations remained deceptively difficult, and not enough resource was being applied to overseeing projects, according to Ovum research director Kevin Noonan.

"While generic solutions are abundant, there are still hidden challenges in delivering solutions that meet specific business requirements," Noonan said.

"Scope creep can become the deadly enemy of such projects, particularly where there are complex employment conditions to consider. This was certainly the case for Queensland Health’s payroll system," he said.

Although payroll systems had been the target of software automation for more than 40 years, it remained a complex environment in large organisations.

In the case of Queensland Health, the organisation provided services in both remote and metropolitan areas, covered 13 different industrial awards, multiple industrial agreements and catered for more than 200 different allowances for employees.

The combined effect of this was that the current award structure meant more than 24,000 different pay combinations needed to be calculated.

In the wake of the Queensland Health payroll debacle, the state's Auditor General found the project had suffered significant scope creep, with prime contractor IBM submitting more than 47 contract change requests.

Noonan says there is a lesson in this project for other government's particularly in relation to shared services ventures – something of a flavour of the month in state jurisdictions.



"(Shared Services are) a sensible step given the significant potential savings in management and infrastructure costs, as well as the extra benefits in delivering coordinated services across agencies," Noonan said.

"However, things can go disastrously wrong if additional governance arrangements are not put in place. Competing interests need to be managed between new stakeholder groups."

Noonan says that by the time a large shared services project is under way, it may be too late to make substantial changes to governance arrangements.

"This is because governance negotiations now impact multiple corporate players and at multiple levels of hierarchy. Organisations can be captive to their own existing management dynamics."

Governance changes along the way are very likely to just add to the confusion and management complexity, Noonan warned.