Qld Health payroll fix may cost $440m


news The Australian newspaper (click here for the full article) has reported that the cost of fixing Queensland Health’s botched payroll systems implementation may rise eventually to $440 million. The newspaper quoted the new LNP Health Minister Lawrence Springborg today as saying:

“There is a lot of information that has been put together about what it has cost so far and what it could cost to fix and it is an unholy disaster, a massive debacle … There is very little dispute that it will eventually cost double what the previous government told the public.”

For those that need a refresh about this disastrous project, it was kicked off in December 2007, after IBM initially prepared a statement of scope for the replacement of the project, providing an estimate of $6.13 million to replace the previous LATTICE system. However, the initiative, based on SAP software and implemented by the Government with assistance from IBM, quickly got out of hand, blowing both its budget and its projected timeframe for delivery.

A large number of Queensland Health staff have received little or no pay in some periods since the new platform was introduced in March 2010, leading to a widespread public outcry, although the situation is believed to have been gradually improving. The system serves some 78,000 of the department’s staff every fortnight, with the total payroll amount being $210 million. In March 2011, the state’s then Labor Health Minister Geoff Wilson claimed the project had been “stabilised”, but with further work to be done.

The Queensland State Government at one stage demanded that IBM provide reasons why its contract at the centre of the project should not be terminated, with the state reserving its right to withhold payment on the deal and seek damages. The state’s auditor-general has found that all concerned in the implementation — prime contractor IBM, Queensland Health itself and government shared services provider CorpTech — significantly underestimated the necessary scope of the project.

The payroll overhaul project is not the only IT-related issue which Queensland Health is suffering at the moment. The department also needs a mammoth $439 million injection of government funding to fix its ailing patient administration system, according to explosive documents tabled in the state’s parliament by the then-Queensland Opposition in September. And another IT system associated with ministerial correspondence is also apparently on the verge of failure.

If you work in Queensland Health’s IT department, best to evacuate now. The tally for fixing the department’s IT problems is rapidly approaching $1 billion. There is only doom ahead. Run, run, while you still can. Deny all knowledge of ever having been employed there and find a new life and a new career in a completely unrelated field — landscape gardening, maybe. A ticking time bomb is about to explode in that department and you do not want to be associated with it. You may think I’m joking; but I’m not joking. I’m completely serious. If you work in IT at Queensland Health, be aware that you probably work in the worst place in Australia when it comes to IT. Get out if possible.

In all seriousness … what the hell has been going on at Queensland Health over the past decade? How did things get billion-dollar bad?

Image credit: US Government, Creative Commons


  1. Am I the only one thinking that some type of anti-corruption enquiry should be held here?

    • @ typical holier than thou NSWelshman attitude thinking the country revolves around them..

  2. This site (or at least this article) is broken in IE9. I had to switch on compatibility view for it to display properly. Just thought you’d like to know.

  3. This article and the $$$$$$ mentioned do not cover the ehealth program expenditure and absolute failure to deliver anything substantial since the $243M funding of the 2007 ehealth strategy. Would be interesting to do an RTI on the amount of money that QH has spent collectively with PWC since the abandonment of the ehealth strategic alliance and the substantial allocation of work across both ehealth and Payroll.

    Pasture is greener on the outside by the way…

    • There has been a paper from Sydney University that examined the failure of NSW Health systems. It is very revealing. Also the medics in the UK produces a 600+ paper commenting on the value of IT to health. They concluded that IT has potential but they observe no benefits (this is after the UK spent £20billion+).

      The current generation of information systems will not work in terms of eHealth. Governments do two things. If they have some balls they kill the project, or if they have no balls they pour money at the problem expecting it to go away. Of course it never does and the project balloons.

      As regards QLD they were always going to have issues. SAP is a monolithic application. Change all your processes, do it the SAP way and it might work. Try and use the system to replicate current practices and processes and you are faced with a costly bespoke build.

      They could have looked outside the current generation of ERP technologies as it represents an IT world that is being changed by the Internet and Internet based technologies. For instance emerging technologies like Workday are far more flexible.

  4. I think the magic TLA you are looking for is IBM. I worked on an internal project where we wrote an app with an oracle back-end. Wrote it ourselves, wrote the database, bought the 10 blade server, installed it ourselves around $60K all up…IBM were required to write 1(one) wrapper for 1(one) webservice call on a server they controlled. Six months of stupid meetings where iBM staff thought of reasons why it couldn’t be done, a 150 page document, $350 thousand in fees – come implementation night, all the $2500 a day consultants had disappeared, there was 1 poor guy from Bangalore who knew nothing about the project, the documentation of the implementation of the wrapper read “TBA” (I’m not kidding)…and the wrapper had not been written.

    • Don’t underplay the efforts of QLD government staff in this outcome. IBM was the controlling contractor but the actual implementations were WorkBrain (a Canadian product to do the award interpretation) and SAP (for payroll itself). QLD government had come up with the notion of handling multiple contracts through the payroll system. SAP was able to do payroll based on multiple contracts per staff member (apparently). I believe that was the original IBM suggestion but then as far as I can tell the QLD government swung WorkBrain in which they believe offered other HRM(?) functionality that the QLD government could dovetail into the project as a bonus.

      The problem was, and still is, that WorkBrain is designed around an individual directly and not around contracts. To get around this the QLD government people constructed an environment to try to trick its way around these obvious conflicts. For instance, the staff with multiple contracts were added multiple times – as individual employees into WorkBrain – remembering that workbrain only looks at the individual. So consider award interpretation for leave. You have 3 contracts each with holiday accruals. You will be treated as 3 employees in WorkBrain. So you put in your leave application and low and behold you are paid out for one contract only and then don’t get anymore holiday pay. You return to find out they placed you on leave without pay – they (probably through lack of time and indeed complexity) didn’t bother taking the leave from the other contracts. Then consider the similar consequences on the pays themself with overtime/call-ins and the like – hence the missing or over payments.

      The solution is the disaster before us. Amazingly even during the period of the independent audit I heard one QLD government employee who was integral to the design of this system’s structure stating ,with pride, that “We are the only people to get this to work so far”.

      As a footnote: the system will be scrapped. They can blow $400M if they like but it will be scrapped. It is a multitude worse than there aged lattice environment when you look at the metric of accuracy of payroll payments. I think Lattice used to lose $30K-$40K a year – every year. This one is well beyond that and with the consequences of lawsuits from the government the staff are moving to the safety of the Private sector.

    • Funny, but something similar happened to me with IBM. The controlled an API and they were asked to quote on modifying an existing Web Service wrapper.
      It should have been a couple of days work for a skilled developer, including testing and documentation.
      Quote: exactly $100k.
      I asked for a breakdown of the cost and never heard back from them.

  5. Perhaps before ranting about corruption & incompetence you might try looking at the complexity of the QH payroll. The number & complexity of award conditions that are involved in paying the 80,000 + staff would fill a small bookshop. The huge number of changes resulting from ongoing “award” updates is swamping their capacity to fix the existing defects.

    If QH are at fault for something, it is lying down to every union demand for the last 10 years. However, it’s really not possible to blame them when you had an entrenched Labor administration who were responsible for directing the executive and who backed the unions all the way. A classic case of being careful what you ask for in case you get it.

    • What, seriously? We have to redesign actual working organisations because computers aren’t good at complexity? Unions are at fault because they didn’t take into account the difficulties software architects might have when seeking increased pay for their members?

      50 years of project management as a science and we still blame the client for being more complex than Northwind? How about the incredibly expensive PM consulting companies actually carry out the job they are paid for?

    • The figures of 4500 variations and 80,000 employees sound like huge numbers, maybe in payrol circles they are, however applying a logical algorithym to process a multitude of designed variations is not that difficult.

  6. Press release from the Australian Computer Society, 2005

    Wednesday, November 9, 2005: The ACS (Australian Computer Society) has signed an agreement with Queensland Health that will result in the provision of Information and Communications Technology (ICT) professional development services to employees at the state health body.

    The ACS Enterprise Partner Program agreements is the first of its kind, and meets the ACS objective of providing professional ICT training to workers who want to continually update their skills. These agreements are a major step forward in developing ICT professional standards in Queensland.

    ”We are delighted that Queensland Health has signed up to the ACS Enterprise Partner Program and we hope that more organisations across Australia follow them,’’ said ACS Queensland Branch Chair, Mark Lloyd, at an ACS luncheon briefing in Brisbane today.

    ”This is a major step forward for the ACS and we will be promoting the enterprise partner program to more organisations around the country,’’ said ACS National President Edward Mandla. “The ACS appreciates the strong endorsement from the Queensland Government in the professional development programs that we offer to the ICT workforce.’’


  7. ‘prime contractor IBM, Queensland Health itself and government shared services provider CorpTech — significantly underestimated the necessary scope of the project’.

    Surely that just cannot be correct. How in Hell’s Bells can a company give a quote to anyone and ‘underestimate the scope’. I’m sure if I was given the plans for building a shed and I quoted a price, if I then went to the householder and said, ‘sorry, the shed was bigger than I quoted for’, I’d be told, ‘you quoted the price based on the plans, build it for that price’, methinks that would be fair enough too.
    I said in a previous post, Governements shouldn’t design IT by committee. In this case it appears that neither should they let IBM/SAP/CorpTech within cooee of it either.

  8. “If you work in Queensland Health’s IT department, best to evacuate now. ”

    .. seems like sensible advice to me, but why stick at just Qld Health? Things are pretty rotten in most states from what I can see, across a multitude of agencies (and god only knows how bad at a Federal level). I’m not sure it’s worth working in public service IT anywhere in AU now, if you have any self-respect and care about what you do.. who knows what negative impact it will have on one’s career in the future. The private sector has so many better opportunities, and appreciates good people far, far more. Just steer clear of the numpties who provide services to government, since they tend to get infected with the same diseases.

  9. How many “half a billion dollar” payroll systems exist out there ?
    Furthermore, why is a company under contract (i.e. IBM) even given the flexibility to blow out their initial contract?

    Time to stop spending our hard earnt dollars and do your homework before signing a contract.

  10. Liberal Government: You are no better if you allow this payroll system to cost the Australian tax payer $500,000,00 [no matter who is to blame].

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