Tasmania’s huge payroll overhaul may go cloud

news The Tasmanian Government has flagged plans to overhaul its dated whole of government human resources and payroll systems, in a move which will affect some 28,000 employees and may see the state shift its systems into a cloud computing/software as a service model.

According to tender documents released this month and first revealed by Intermedium, most of the state’s departments and agencies currently use the same underlying payroll technology (in different implementations), and have done so for almost two decades. The ten different platforms service some 28,000 employees across 43 awards and agreements and pay out around a billion dollars every year. However, the Tasmanian Government noted in its tender documents, the platform had become difficult to manage.

“It is 17 years since this system was installed and it is time to comprehensively review the solution and the way it is implemented,” the tender documents state. “There is an unacceptable level of risk associated with the age of payroll technology, lack of clarity of the long term viability of the product, lack of consistent take up of productivity tools such as employee self-service, adding to Agency cost through inefficient practices and duplication, an aging HR workforce leading to a loss of key payroll knowledge, inconsistent IR interpretation and an increasing number of manual workaround processes throughout Agencies.”

“There are high levels of duplication both at a business and technical level across the 10 payroll systems mainly due to the period of time and changes in support arrangements and government reorganisations over the 17 years.”

In addition, Tasmania noted: “Machinery of Government changes are problematic with so many individual Agency databases and regular restructuring and reorganisations resulting in legacy databases.” And there are also problems linking the current payroll structure to the state’s finance systems. Most Agencies use the same finance system, Finance 1, however over time the interfaces and business processes between the payroll and finance systems have diverged as Agencies continue to use a variety of processes and payroll costing models.”

With all of this in mind, the state has gone to market seeking an independent consultant to undertake several studies to assess its current situation ad to general a detailed roadmap for the future of its payroll systems over the next decade, aiming both to make the most effective improvements with minimal cost and/or maximum return, but also to learn from the experiences of other government jurisdictions.

Traditionally, payroll systems have largely been hosted in-house by major government departments, but one of the aspects which Tasmania will examine will be the consideration of a move to “a more contemporary environment (software as a service or cloud environment)” in order to help deliver efficiencies to the state.

The state wants to sign up a consultant to examine its situation and have its reports and detailed proposed roadmap delivered by late June this year – which gives the successful consultant very little time to examine the state’s systems.

The news comes as governments around Australia are increasingly examining the case to shift to cloud-based technology solutions in an effort to make their IT operations more effective and efficient.

In early December last year, for example, the New South Wales Government added to early signs that it is moving to adopt the kind of ‘cloud-first’ IT procurement strategy which jurisdictions such as the United States, United Kingdom and New Zealand have pursued over the past several years, in a move which could fundamentally change the way the state buys and uses technology.

And earlier in 2012, several major New South Wales Government agencies, the Department of Trade and Investment and Transport for NSW unveiled major and wide-ranging plans to imminently purchase Software as a Service-style IT solutions, detailing the new interest in the cloud computing paradigm through tender initiatives kicked off at the time.

One of those tender initiatives has already resulted in a major cloud computing deal. In July, German software giant SAP won a substantial deal with the the Department of Trade and Investment which it described as its biggest deployment of its Business ByDesign software as a service suite globally, and its first cloud platform win in the local public sector. The $14.5 million deal will see SAP deploy a cloud-based ERP platform to the department, consolidating many other legacy systems onto the one centralised platform along the way.

Transport for NSW (which was formed from the merger of the NSW RTA, maritime, transport construction authority and Country Rail groups) was also talking to the industry in May about SaaS packages. The tender documents have gone offline, but an article by ZDNet.com.au details the fact that in March, the agency went to the market with a proposal to abandon in-house infrastructure and migrate 35,000 email accounts, 25,000 desktop environments and some 2,000 BlackBerry devices to new systems, all labelled “as a service”. ZDNet quoted Transport NSW’s tender documents as follows: “The group CIO is actively promoting a strategy of ‘as a service’, recognising the potential for leveraging the economies of scale and expertise of the private sector in the delivery of core technology platforms and capabilities to government.”

In a separate briefing in October, NSW Finance Minister Greg Pearce noted that the state was developing a new cloud computing strategy, including talking to IT vendors about the development of a dedicated private cloud platform which could be used by departments and agencies across the NSW public sector.

In Queensland, the state’s new LNP administration has publicly canvassed the idea of shifting its failed whole of government email consolidation project into the cloud.

However, it also remains true that payroll consolidation projects are fraught with danger for state governments. A KMPG audit into Queensland Health’s payroll disaster – which resulted in tens of thousands of public servants going without pay while others were overpaid — found the project has already cost $417 million and will need some $837 million to fix over the next five years, and the Queensland Government has opened a royal commission into the issue.

opinion/analysis
Wow, has Tasmania ever opened a can of worms. If I was a state government right now, I would be extremely, extremely, EXTREMELY leary of kicking off any kind of huge HR/payroll systems consolidation/upgrade project, considering what happened in Queensland with the Health payroll systems upgrade, and considering that there are also more minor problems in several other jurisdictions around Australia.

However, the Tasmanian Government does have a good history in general when it comes to technology. TMD, the centralised government IT strategy agency down south, does have its head screwed on well most of the time, and it’s been a while since we’ve seen the same kind of IT disasters in Tasmania (at least publicly, they might be going on behind the scenes) as we’ve seen in most of the other states, notably Queensland and Victoria, neither of which appears to be able to do anything right when it comes to IT projects or service delivery right now.

If the Tasmanian Government does pick a cloud-based HR/payroll system, it will be fascinating to see how it’s delivered. And I have no doubt that such an implementation would be very closely watched by other government departments around Australia, and quite possibly used as a template, if it was successful. Certainly nobody would want to use Queensland Health’s payroll systems upgrade as a template, unless it was a template for how to get your Premier and his cabinet to lose the next election.