Customs Failure "A Catastrophe" of IT Governance

Whoever holds ultimate responsibility for the almost total paralysis of Australia's ports, the move to production of the Imports module of Australian Customs' massive re-engineering program proved "a monumental and catastrophic failure in corporate governance of IT".

But while the system, as a whole, failed utterly, corporate governance expert and principal consultant of Infonomics Mark Toomey says that doesn't mean the Integrated Cargo System (ICS) should be abandoned. Nor, at this stage, should the $200 to $250 million sunk into the project so far be considered wasted.

Toomey, who has presented a detailed discussion paper examining what went wrong with ICS in the November Infonomics IT Governance Letter, says now is not the time to launch hasty work intended to "cure the problems." Instead, he says, Customs should take a deep breath, and go back to basics.

"It seems undeniable that the cutover to the imports module of ICS, which saw ports choking on unprocessed cargo, and the year's peak load of pre-Christmas imports hopelessly delayed, was a comprehensive failure. In subsequent enquiries, it may well be proven that individual elements of the system worked well. But the reality is that, as a whole, the system failed utterly."

To begin to repair the damage, Toomey says the Australian Customs Service must implement effective governance processes before making any more decisions. It should look to contemporary guidance, such as that provided in AS8015, and ensure that its governance system for CMR and other initiatives is capable of steering the initiatives to a successful result.

"To learn what is missing from the existing governance system, it would be best to thoroughly review it, taking input from all stakeholders," he says. "The governance system should ensure that all significant decisions are made appropriately, by the right people, on the basis of robust evidence that the conditions to proceed are in place and stable. In an improved governance framework, the Australian Customs Service and major stakeholders need to revalidate the business case for CMR, to confirm and positively articulate the objectives and value that the nation will accrue from the project. Then should assess the work required, from this point forward, to achieve the objectives."

Doing so will involve evaluating the technology that has been created, the readiness of the industry, and the detail of the actual problems experienced during October. Toomey says Customs should also prepare a new plan, with engagement and agreement of all stakeholders, for the achievement of the objectives and value.

That plan needs to be fully and accurately costed, using the benefit of experience to date, detail the work to be undertaken by all parties, and calculate the cost of the work to test the economic case for persisting.

Toomey notes Australia's record of IT failures is no better than the rest of the world, from "distant examples", such as Westpac Bank's fabled CS90 project to far more recent examples like the disastrous Sydney Water's Customer Information and Billing System, and RMIT University's Academic Management System. Organizations should have learnt many lessons from these failures to help ensure IT initiatives do not founder and signs of trouble are not overlooked.

Yet he says Australia's recent experience of sea and air ports grinding to a standstill after problems emerged in deployment of the Cargo Management Re-engineering Project suggests that the lessons are yet to be learned.

"The reality is that we know very well in Australia how to get IT projects right. The absolute core discipline of governance of ICT is the single factor that makes sure the right people are engaged, doing the right thing, for the right reasons, in the right way, achieving targets and managing risks. Australia actually leads the world in definition of IT Governance with the publication in January this year of AS8015. The problem, as I see it, is that too many organizations believe that they are doing IT right - it's everybody else that has the problems," Toomey says.

Join CIO, the CIO Executive Council & IDC on 6 October at Australia’s premier Melbourne event for senior IT executives – the CIO Summit 2010. Find out more or register now.

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