Ministry holds back on $60m upgrade

By RICHARD WOOD

The Ministry of Social Development has put on hold its $60 million plans for upgrading its benefit payments and debt recovery systems and is keeping secret key parts of a report on options that may cost between $87 million and $178 million.

The ministry said social sector policy reform was holding up the process, which would continue once a new statement of intent from the ministry on its overall direction had been published after the Budget this month.

The ministry used consultants KPMG and Gartner in its evaluation of income support systems project in October 2001, which reported back in June 2002.

But the Herald had to invoke the Official Information Act last November, and involve the Ombudsman in February, to obtain a copy. The equivalent of seven out of 18 pages have been blacked out.

The report discusses IT options that will cost $87 million to $178 million over 10 years, and says "capital funding of $60 million has been provided to fund future Swiftt/Trace developments."

Blacked out in the report are detailed costings, pros and cons, a table of financial implications, and other unidentifiable paragraphs.

The evaluation project was undertaken by technical and frontline ministry staff to decide what to do about the ageing Swiftt/Trace benefit payments and debt recovery systems.

The project investigated "replacement" and "evolution" options and used the example of Curam enterprise software, which has been used in Britain, Singapore, and the United States, to evaluate potential costs.

Under the evolution option a modern graphical user interface would provide a single view. An additional rules engine, case management, and workflow systems would be implemented, but the core legacy systems would remain.

It would cost less but have higher ongoing costs and slightly more risk.

The report concluded both options were viable and would take three to four years.

But it said the ministry could hedge its bets by progressively evolving the systems and then replacing them.

The report said more research was needed.

In an accompanying letter to the Herald, ministry chief executive Peter Hughes said the project was "established to identify potential future options" and was "based on opinion".

He said decisions would come out of the ministry's strategic planning process.

The ministry said existing IT systems were good performers and that given their reliability there was no need to rush the planning process.

The report notes that existing systems were developed between 1987 and 1993 and the basic design and limitations remain. In 2001, $30 million was spent upgrading the underlying systems.

The report says any significant social reform changes implemented in existing systems would become a sunk cost if the replacement strategy was ultimately chosen.

For the 16 months to July 1 last year, $16 million was spent on changes to invalid and superannuation welfare payment systems.