$180m Vic Ultranet project a complete failure


news Victoria’s Auditor-General has published a damning report classifying the state’s $180 million Ultranet educational technology project as broadly a complete failure, with the project being hardly used by the state’s students and teachers and being delivered late, over budget and with significant contract probity issues.

The project was first mooted in the middle of the last decade, with its 2007 business case (following an earlier trial) promoting it as having the capacity to deliver an “intuitive, student-centred electronic learning environment” that would allow teachers, students and staff to access curriculum content, records, student reports and community features. After an initial pilot in 2006, when the project was dubbed ‘Student@Centre’, the system was then deployed to all Victorian Government schools throughout 2010, on the back of a contract announced in June 2009 with IT services group CSG, which in 2008 bought CingleVue, another local firm specialising in implementing Oracle solutions in the education sector. The project was based on Oracle technology.

In 2009, CSG said at the time that the Ultranet solution would be “truly world class”. Then-CSG chief executive Denis Mackenzie commented “This will be the first true enterprise solution deployed in P-12 education in Australia, and is one of the first systems in the world to offer such a high level of functionality to students, teachers, parents and administrators.”

However, a report published in late December by the Victorian Auditor-General has found that the project has suffered myriad problems. For starters, the auditor wrote, the project as a whole was “poorly planned and implemented”. “None of its three business cases had a well thought out needs analysis or gave considered options to deliver the project. The various business cases did not answer the ‘Why invest?’ question for the Ultranet, nor did they provide a sound basis for the project’s approval,” the report states, noting that six years after its announcement, the Ultranet project had not delivered its main objectives.

Furthermore, the project continues “despite advice from central agencies that it should cease or be delayed”, with Victoria’s education department apparently ignoring advice on the subject by the departments of the Premier and Treasury.

“It is difficult to understand why the Ultranet procurement was able to proceed to contract execution, given the significant concerns raised by DPC and DTF, as well as the many adverse ratings that DEECD had received from various Gateway reviews since the project first commenced,” the report states. “Further, this audit detected a number of serious process and probity issues in relation to tendering and procurement for the Ultranet. DEECD has advised that it has commenced a number of actions and further detailed investigations in response to these matters.”

The auditor wrote that they had little confidence that financial management practices relating to the project were sound. The project appears likely to have blown out in total cost to about $180 million — triple what it was initially expected to cost — and use of the project is declining, with on average, only 10 percent of students and 27 percent of teachers in Victoria logging on to the platform on a monthly basis from July 2011 through May 2012.

The auditor-general recommended the state’s education department urgently develop a comprehensive strategy to deal with the implementation of learning technologies in schools, as well as urgently reviewing its investment in Ultranet — and considering whether to pursue legal action against CSG. One option is to scrap the project as a whole, while another is to continue to fund it and fix the issues.

The Age newspaper has quoted Victorian Education Minister Martin Dixon as stating that the project was a failure of the previous Labor administration in Victoria and that he had had strong reservations about the project since the Coalition took power in the state in December 2010.

The news comes as the Victorian Government is struggling with almost all of its major IT projects at the moment. In November 2011, the Victorian Ombudsman handed down one of the most damning assessments of public sector IT project governance in Australia’s history, noting total cost over-runs of $1.44 billion, extensive delays and a general failure to actually deliver on stated aims in 10 major IT projects carried out by the state over the past half-decade.

In its its first response to the report, in June last year, Victoria appointed former South Australian whole of state government chief information officer Grantly Mailes, to lead a committee (VICTAC) to establish a new wide-ranging IT strategy to resolve Victoria’s ongoing problems with IT service and project delivery. It also appointed a high-level advisory committee led by Mailes which would provide advice on a new whole of government ICT strategy to rectify the ongoing problems.

Mailes’ office recently released the draft of a new whole of government information and communications technology strategy, with which it aims to start addressing the extensive IT project and service delivery issues. Most of the other states are suffering similar problems with IT project governance and service delivery, with the worst problems likely being suffered in Queensland, where the state in mid-December last year appointed a royal commission into the payroll systems disaster at Queensland Health.

I’ve been harping on about this for several years now. State Government IT in Australia is an absolute catastrophe of epic proportions right now — billions of dollars being wasted, projects simply not delivering on their outcomes, colossal setbacks in public service delivery. This situation is most likely the biggest issue in enterprise IT in Australia right now, bar none.


  1. I didn’t know you smoked cigars Renai!! :p

    But seriously, there’s too much “we know what’s best for you” going on in IT at the moment and not enough “How can we help folks do things better/easier/faster”. IT needs to get back to client focused, and not “What is the best way to give me a job” focused. That super-duper system may sound great at meetings, but if no one wants to use it, it may as well just be a $180m pot-plant…

  2. As far as State IT disasters go this one has nothing on the Qld Health payroll fiasco in terms of cost blowout/fix up costs, but it looks like this one was 100% outsourced, which is a bit more of a concern. The Qld disaster was primarily of the States own internal IT department’s making

  3. Thanks for providing such good ongoing coverage of State and Fed Govt IT issues Renai.
    Oz Govt Depts can well and truly piss money against the wall with the best of them it seems.

    • No worries. It’s a huge issue — billions of dollars of taxpayer money are literally being thrown against the wall here — personally, I find it hard to believe at times that things are so bad. Taking this project as an example, right from the original contract there were probity issues, and things started going bad quickly. But the Education Dept concerned ignored advice about the situation and just let it get horribly out of control, wasting years and years and more than $100 million along the way, for a project which looks likely to ultimately be scrapped.

      This is very far from being a standout project in state government IT at the moment. In fact, I’d say Ultranet is very representative. And that’s a terrible state of affairs.

      • It is a huge issue because it is known. Public Sector problems are more visible as Auditor-Generals, oppositions, and the media are keener to pursue stories in this environment. But in truth these disasters also occur in the private sector only, and this is a personal observations, the malignant projects seem to be identified earlier and curtailed quicker. The few of these I’ve managed to encounter go along the path of ‘demote or sack the decision maker(s) that made the wrong decision and the other decision makers in the organisation will try harder not to be similarly rewarded’.

        • Agree entirely with this.

          I suspect that this is the real reason contracts get done with “commercial in confidence” so often now days, if they knew they’d be on time, on budget and correct, they’d be plastering it in ads all over like companies used to do…

  4. Speaking of State Government IT, where has HEALTHSMART gone? Current Victorian Government abanded the project last year, that is, it’s been renamed Health Shared Services and still running… ;-)

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