Qld Health payroll: The lawsuit may be back on


news The new LNP Queensland Government is reportedly attempting to source legal advice created for the previous Bligh Labor Government with respect to whether it would be feasible to sue vendors involved in the disastrous Queensland Health payroll systems implementation.

In June 2010, following a damning report by the state’s Auditor-General into the payroll fiasco, which has seen many Queensland Health workers go unpaid and many others overpaid, the Bligh Government sought legal advice on whether vendors involved in the project could be sued for damages.

“The Auditor-General’s report clearly identifies failings on the part of contracted provider IBM,” said a statement issued by then-Queensland Premier Anna Bligh and Health Minister Paul Lucas, noting the state reserved its right to withhold final payment and seek damages. “We have sought Crown Law advice in relation to options for terminating the payroll contract with IBM and it’s only fair that we seek to reserve our legal rights. The Government has issued IBM a Show Cause Notice as to why the contract should not be terminated,” Bligh said.

That advice never went anywhere, to this publication’s knowledge, but it appears as if the new LNP Government led by Premier Campbell Newman may seek to resurrect the proposed legal action.
LNP Health Minister Lawrence Springborg is currently seeking to find the legal advice provided to the previous government, according to an article published by the Courier Mail newspaper this week, but had been stymied, allegedly, because the material had become a Cabinet document and was therefore protected. The Labor Opposition has denied that the documents hold a solution to the payroll mess.

The Auditor-General’s report filed in 2010 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. IBM had initially told the Government that a “relatively small” amount of functionality would be required to implement a similar new payroll system at Queenland Health as a previous build at Queensland Housing — despite the fact that the Housing rollout only catered for 1200-1300 staff, compared with Health’s 78,000.

The payroll systems rollout was based on software provided by German giant SAP, but SAP is believed to have had little to do with the implementation. However, also involved is the Workbrain workforce management software provided by software vendor Infor.

In 2010, IBM defended its implementation at Queensland Health, when asked to respond to the prospect of facing legal action by the Queensland Government. “As a global company with deep expertise in dealing with highly complex systems implementations, we vigorously defend the quality of the system we delivered to Queensland Government,” the company said at the time. Big Blue maintained it was “not responsible” for many key aspects of the payroll overhaul as confirmed in the Auditor-General’s report.

“We delivered within the governance structure established by Queensland Health and outlined in the Auditor General’s report,” the company added. “IBM has relentlessly and consistently delivered above and beyond the scope of the contract to assist Queensland Health identify and address concerns with its payroll process.” The company said its commitment to supporting the state in its mission to provide quality services to employees remained unchanged.

Whatever path the Queensland Government takes with respect to the future of the system, it is likely to be expensive. Springbord has publicly stated that the cost of fixing the platform may rise eventually to $440 million.

To be honest I don’t think the new LNP Government really knows what they are dealing with with regards to the disastrous payroll systems implementation at Queensland Health, and I don’t think they understand the dynamics involved between the implementation and the involvement of the various vendors either. Shocking, I know, that politicians may not understand complex technology implementations. I suspect it may take them three to four years to understand this problem and fix it. I await the next audit report into the issue with bated breath.

Personally, I don’t think it would be a good idea for the State Government to sue IBM over the issue. Frankly, Queensland is likely still very reliant on IBM to keep this system working, and while IBM may share some of the blame for the issue in the first place, I suspect any court would find the lion’s share of the blame should go to the Government itself and its poor governance of the project. Besides, it’s not as if the state is going to be able to avoid dealing with IBM in the future — no major Australian organisation is uninvolved with the vendor — that’s how big it is. Probably the better course of valor would be to use the payroll issue as a stimulus to get better outcomes in other areas.

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  1. Queensland Health executive have a habit of blaming everyone other than themselves. This is a repeat performance.

    For example, the precurser to the current non delivery ehealth program was the trakhealth related project. This also ended up in court. This occured when Queensland Health countersued the vendor for 5 times the cost of the project.

    What is now commonly known is that Trakhealth has been found to have been subsequently implemented in many other jurisdictions in Australia and overseas. This would seem to suggest that the problem(s) were in no small measure to do with the client.

    In addition, the rationale provided by Queensland Health for the breaking of the contract and subsequent legal case was that the vendor Trakhealth’s technology could not scale to Queensland Health requirements. Anyone in the industry who knows the circumstances and anyone who only has a mild interest would also know the small but not insignificant fact that Trakhealth is built on and uses perhaps one of the most widely used and respected technologies in healthcare. Hence Queensland Health was not entirely honest in its dealings.

    Advance some considerable years later a failed payroll program and complete denial that $0.5B+ has been blown on ehealth for no substantial outcome. (Anyone who has worked in QH ehealth knows the so called “viewer” which just won an award was a so called tactical quick win project of the original ehealth program. It would seem that a tactical quick win takes 5-7 yrs.

    (here’s hoping that’s sufficient for those in QH IT to keep their jobs and not have the whole lot outsourced by the NLP).

    • 100% agree its clear Queensland health can’t articulate their requirements to their vendors.

      But blame also lies on the vendors too. They shouldn’t be taking on the project blind like they have and caught wind the Queensland health were incompetent to hand such a project.

  2. Umm, it’s not ONLY an IT problem. One of the biggest issues was QH’s decision to centralise roster and timesheet processing at the same time as the roll out of the new system.

    The second big mistake was the architecture between SAP and WorkBrain. That was Corptech’s design.

    IBM did what they were told. And it works. If you put correct information into WorkBrain, it produces the correct pay (at huge cost it IT processing, but it does work).

    A pity the government’s lawyers weren’t on the ball when the contract was signed. If the government goes ahead with their suit far too many uncomfortable facts will come out. And IBM will still be able to say “we did what you contracted us to do”.

  3. “Did what you contacted us to do?” The contractual obligations were written in braille. I.B.M amongst others relied on the fact they didn’t think the system would be implemented until more money was spent on providing additional applications to read, correct and write payroll information in to databases that then could be fed into these programs. It’s fine to want something, but when you have promised you can supply something and then start changing the terms that/’s when you are in breach. [censored by Renai] IBM will quickly change their tune when they realise QLD”ers are tough and come from the smart state. We don’t take kindly to cockroaches or shonky business. They won’t be asked to develop I.T programs in this state again.

    Paul Lucas

  4. The solution was only designed to be an interim solution until the whole of government solution replaced it. When the main programme was halted, they had limited choices, as the existing system was failing daily. However instead of being sensible, it was a land grab by Qld Health, to see how much they could stuff into the solution, adding to it’s complexity and abusing the contract relationship between CorpTech (and hence IBM). CorpTech just stood back and let it happen.

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