NSW Government Licensing Project slammed by Auditor General

Nine years late and $23 million over budget and expected to return just a third of the expected financial benefits
  • Tim Lohman (Computerworld)
  • 08 October, 2009 12:40

NSW's Government Licensing Project (GLP) aimed at centralising software licences is nine years late and $23 million over budget according to the state's auditor general’s office.

In a report into the state of the project, the auditor said the project is both unlikely to be finished until 2014 and is likely to return only a third of the original estimated net savings.

The project, commenced in 2001 was expected to be fully implemented by 2005, was intended to replace over 40 different licensing systems in around 20 licensing agencies with a standardised best-practice system in all licensing agencies except for the Roads and Traffic Authority.

In 2001 the project was expected to cost $63 million over four years and generate gross benefits of $132 million, giving a net benefit of $69 million, according to the report. The project is now expected to cost $86 million over 12 years and have gross benefits of $105 million with net benefits of only $19 million.

The auditor’s report found a number of reasons for the project’s failings including that the 2001 business case for the project did not identify which agencies were to be included nor the number of licences, and failed to adequately address risk management, internal change management and training.

The project fell behind schedule within months of commencement, according to the report, because the early steering committee was too large and there was no clear definition of the decision-making process.

The project’s treatment of major risks did not include actions to respond to the slippage against milestones which occurred, and key decisions affecting the project’s scope were made outside the steering committee.

In a statement NSW Auditor-General, Peter Achterstraat, said problems with the project simply came down to poor project management.

“What concerns me is that this is not the first time my Office has raised issues about government IT projects,” he said. “Most notably, in 2003 my Office reported numerous problems with the governance and implementation of another large IT system - Sydney Water’s Customer Information and Billing System.”

In its response to the auditor’s report, Graeme Head, director-general at the Department of Services, Technology and Administration (DSTA) – the agency responsible for the project – wrote that it was acknowledged that the early years of development encountered difficulties due to the magnitude of system complexities and organisational changes required to transition from sole agency to whole of government platforms.

“In hindsight, it might be considered that the original time frames for implementation underestimated the scope of the reform processes associated with the project,” Head wrote.

In acknowledgement of the need to address the initial delays to the project, a range of better implementation processes had been adopted, including regular functional release plans, standardised training, and more effective governance structures, Head wrote.

These changes had assisted the successful implementation of the GLP across a large number of agencies and licence categories.

“The [GLP] is a highly ambitious information and communications technology (ICT) project with whole of government application,” he wrote. “The Performance Audit’s recommendations recognise the challenges presented by such significant projects in relation to issues such as project oversight, governance and risk management. In this context, it is noted that the Government has established the Better Services and Value Taskforce, which will be considering matters including whole of government spending on ICT.”

Despite the budget and delivery date run-overs, the project – which has so far been implemented in six agencies responsible for 1.7 million licences – had seen the replacement of 15 legacy systems and consolidation of 102 licence types to 55, the auditor’s report found.

“Customers now have more flexibility and convenience in applying for, renewing and paying for licences,” the report reads. “One in three licensees have renewed licences for longer periods, and one in two of these transactions are completed online.”

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