Introducing ‘The Cuba Replacement’:
The Federal Govt’s newest major ICT project

analysis The Federal Government has lived through half a dozen major ICT projects over the past decade. Customs had its Cargo Management Re-engineering overhaul, Immigration had Systems for People, Tax had the Change Program, and Defence is still wrangling with its desktop virtualisation and PMKeys undertakings. Now we can add one more to the list: The Department of Human Services’ ambitious project to revamp the Child Support Agency’s key ERP system, previously known as ‘Cuba’.

The first the Australian public heard about the project to overhaul the Child Support Agency’s key IT system was probably in May this year. At that stage, Human Services Minister Jan McLucas announced that the then-Gillard Government would, as the Senator said at the time, “deliver improvements to information technology systems to ensure millions of Australians receive government payments efficiently and effectively.”

When a Human Services Minister makes such an announcement, it usually refers to Centrelink. After all, the welfare agency is the big kahuna of Federal Government expenditure. It’s got one of Australia’s largest IT departments and doles out billions of dollars in payments each year.

However, as McLucas went on to outline, in this case she was referring to a different, but related, part of her portfolio — the organisation previously known as the Child Support Agency, which has over the past several years been integrated into the wider DHS organisation, along fellow portfolio agencies Centrelink and Medicare.

McLucas said the Government would invest $102.2 million over five years in the upgrade of the child support IT system.

With around $250 million in child support payments being distributed to families around Australia every month, the new system, according to McLucas, will ensure greater accountability and ensure much needed flexibility in to the future. “It’s important we have the right IT infrastructure in place to ensure parents continue to receive their correct entitlements now and into the future,” the Senator said at the time.

The current system has been in place for over a decade, according to the Government, and is at the end of its proposed lifespan. The longer the delay to replace it, the higher the cost of system maintenance and the greater the risk of error. McLucas expected the upgrade to commence in July this year, with the project to be implemented by December 2015 and further upgrades to be completed by June 2018. “This new system will have increased capacity to support both the current and changing needs of Australia parents,” said McLucas at the time.

In tender documents released last week, the Department of Human Services revealed key technical details of the current Child Support System, as well as what it is planning for the replacement infrastructure.

The current platform, known as ‘Cuba’, was first deployed in 2002, according to the tender documents — more than a decade ago, or an age in technology terms. It contains all of the Child Support Agency’s electronic customer records and supports transactions for assessments, payments and data exchange with external agencies.

And the scale of the system is not small. It directly supports over 1.2 million Australian children through providing some $3.2 billion per year in payments. It also helps the department administer child support services and collects child support so that separated payments can ensure “the financial and emotional wellbeing of their families”. The department’s tender documents also state:

“The Cuba application comprises approximately 650 screens and windows supported by 1,000 mainframe based servers and 7,500 code modules. The Cuba database consists of 350 tables with approximately 7,500 data access points throughout the code base. The current system processes more than one billion transactions each year.”

However, according to the department, things are not all well with the current platform. “The [Child Support System Replacement/CSSR] Project is intended to execute over a maximum of five years to address deficient capability within the department as a result of the current Cuba application being unable to fully or easily support Commonwealth government initiatives and directions,” its tender document state. “The department is currently investigating the feasibility of delivering the replacement system in a shorter timeframe (i.e. three years) while still achieving the core outcomes of the CSSR Project.”

It also notes that its aims in future include the ability to support self-sufficiency through online and mobile platforms — implying it has limited capability in that area right now — and that it wants to reduce the number and impact of “system-generated errors” in its current Cuba platform. It also appears that the current system is not able to easily handle “complex cases” or “emergency response situations”.

The department’s aims for its new Child Support System include the need to implement appear to be relatively standard in terms of major IT systems; it wants to implement a “strong, underlying, flexible and scalable ICT platform” that will still give it agility and flexibility in future; it wants to set up the platform to deal with future requirements, and it wants to greatly improve workload management and reporting; alleviating “manual workload practices” inherent in its current system, which it said “currently contribute to customer dissatisfaction”.

However, there are also more technical aims mentioned in the department’s tender documents; namely, it wants to “ensure that development activities are undertaken in a way that maximises software reuse opportunities”.

And DHS clearly understands the magnitude of the project it’s undertaking. “The initiative is a significant undertaking for the department requiring the complete replacement of the existing, core application (Cuba) along with the various programs and utilities that comprise the child support system,” its tender documents state. “The replacement of the child support system will need to be implemented in conjunction with other major service and system initiatives of the department.”

In terms of its future platform, the department has chosen an underlying technology for the Cuba re-development — software from German technology giant SAP, which is also used in a number of other major deployments across Australia’s state and federal governments.

However, extensive customisation and systems integration work will also be required, with the department’s tender documents stating that the re-development “will require close liaison with SAP to redevelop base modules and avoid bespoke modification to aid efficient development of the new system and ensure upgrade pathways for SAP solutions are not compromised”.

The new platform will also need to interface with a variety of external systems; including, for example, the DHS corporate telephony platform.

Considering the work entailed, the projected timeframe for the project appears quite tight. DHS has entered an expressions of interest phase for the development work and plans to issue a formal request for tender document for the project in September or October this year, after short-listing a number of companies for the initiative.

It then expects to deploy the replacement project by mid-2016, giving it likely only about two and a half years to do so, while transitioning all existing customer data onto the new platform by the end of that year. It then plans to implement additional enhancements to the new system by the end of 2018, with a view to more fully supporting current government legislation and policy.

However, of course, a huge spanner could also be thrown into the works by the Federal Election — with any incoming Government having the potential to re-evaluate the project’s funding later this year.

In a certain sense, the re-development of the Child Support System isn’t as huge a deal as some of the projects which came before. The Cargo Management Re-engineering, Systems for People, Change Program and Defence payroll overhaul projects are all initiatives which will or have run into the hundreds of millions of dollars and involved substantially more resources than the Cuba overhaul at DHS.

However, the length of the CSS overhaul — probably five years, by the time it’s finished — as well as its importance to DHS, place it on a similar level of importance. If things go wrong as they did with Queensland Health’s payroll systems overhaul, which was also based on SAP, then the department could be facing a situation in which hundreds of thousands of Australian families are not receiving the correct child support payments; as tens of thousands of medical staff didn’t receive the correct payments in Queensland when that overhaul went off the rails.

And, historically, major ICT projects have gone off the rails to some extent in the Federal Government. Customs’ CMR project was botched and resulted in cargo literally piling up on wharves around Australia while technicians tried to make the IT admin systems function; at Tax bugs in the Change Program caused chaos for accountants right around Australia, and, like the other projects, Immigration’s Systems for People project blew its budget and ran late.

It’s not hard to guess that the CSS overhaul at DHS is going to suffer at least minor implementation problems; pretty much every major ICT project does.

Then, too, there are already indications that the CSS overhaul is going to have problems. Keen observers will have noted the following paragraph in its EOI document last week:

“Development of the child support system will require close liaison with SAP to redevelop base modules and avoid bespoke modification to aid efficient development of the new system and ensure upgrade pathways for SAP solutions are not compromised.”

Is DHS really saying that it wants its project partner to work with SAP on re-developing SAP modules to fit its own needs, and then re-integrate those modules into the mainline SAP codebase, so that future upgrades aren’t a problem? Some would call that a rather ‘ambitious’ approach. Convincing a mega-vendor to do anything like this is always going to be a headache. And especially for a project as small (on global terms, $100 million is nothing) as the CSS overhaul.

It could also be the case that the CSS overhaul is being used as a bit of a test case for DHS’s development capabilities. When McLucas announced its funding in May, the Minister also noted that a review would also simultaneously be undertaken “to consider the future of Centrelink’s main IT system”, its Income Security Integrated System.

“The Centrelink IT system supports assessments and delivery of income support and family payments to over seven million people, with over half a billion dollars deposited into the bank accounts of Australians every working day,” McLucas said at the time. “IT requirements are extensive and the review will examine options to ensure we can continue to support and deliver future Government programs, efficiently and effectively.”

“Australians place enormous trust in our systems to ensure they can access the services they need, when they need them. These IT investments will deliver the capabilities needed to improve access and provide a simple, streamlined experience for people dealing with multiple department services.”

It’s not hard to guess that if the CSS overhaul goes well, then Centrelink’s much, much larger core IT infrastructure will be the next cab off the rank in terms of a massive upgrade. This would make sense. You don’t want to undertake these kinds of projects simultaneously; and the CSS upgrade is probably more urgent, given that Centrelink’s core IT infrastructure has been well-maintained over the years. The IT department at Centrelink, led for a long time by legendary public sector CIO John Wadeson, has a strong reputation as one of the best in the Federal Government, and words is also that Wadeson’s successor Gary Sterrenberg has kept things very much on track.

However, it’s also true that Centrelink’s IT department, which has formed the heart of the newly integrated IT department at the Department of Human Services, hasn’t faced a massive IT re-development project such as Systems for People or the Change Program for some time. It looks as if the CSS overhaul will be used as a step project to gain experience, with a much, much larger IT overhaul down the track. In this sense, the performance of DHS in conducting the CSS upgrade will be closely watched indeed, both internally and externally.

It’s been a while since Federal Government watchers had a major enterprise IT re-development project to keep tabs on. Let’s hope the Department of Human Services keeps its ‘Cuba’ overhaul on track. Because there is no doubt that if it doesn’t, the office of the Auditor-General will not be lagging very far behind.