Greens claim NSW LMBR project turning into a disaster


news The NSW Greens late last week claimed to have obtained documents showing that the NSW Department of Education and Communities’ wide-ranging Learning Management and Business Reform program, which involves a number of rolling upgrades of business administration software, was deployed before it was ready, with “appalling consequences for administrative staff, principals, teachers and students”.

The Learning Management and Business Reform (LMBR) program was established in 2006 to modernise the way the Ddpartment manages and delivers student enrolment and administration, learning management, support services, finance, human resources and technology services to schools, TAFE NSW and the Department’s corporate offices. At the time, it was expected to be delivered in two phases over eight years and to incur capital costs of $386 million.

The LMBR program is replacing some of the Department’s legacy software systems that are old, inefficient, costly and slow. Systems to be replaced during stage two of the program include two payroll systems (iSeries for schools/corporate and Lattice for TAFE NSW) and the schools finance system (Oasis).

Since the original business case, some additional legacy systems in the human resources area have been added to the scope of work. The LMBR program will also replace some manual administrative systems currently used by staff in schools, TAFE NSW and corporate offices. The project as a whole is based on SAP software.

In a statement issued over the weekend, the NSW Greens said it had obtained documents showing that the rollout to 229 pilot sites in NSW occurred before the software was ready for use, with appalling consequences for administrative staff, principals, teachers and students.

Greens NSW MP John Kaye said: “The good will and morale of hundreds of school employees have been squandered by the rush to get the software system up and running in time to deliver the NSW government’s Local Schools Local Decisions autonomy restructure.”

“School administration staff, principals, teachers and students have been treated as expendable by a department that is only interested in meeting the NSW government’s timetable for devolving school decision making. Neither Labor nor the Coalition have been able to deliver a learning and management software system that works. The state government has rushed ahead with a rollout of a system that is not ready for use, imposing appalling financial and personal costs on school communities.”

“The project has spent 97 percent of its allocated funds and the evidence is clear that the software is a long way from being ready to meet the needs of school communities. The inevitable cost blow out is the least worrying aspect of the LMBR disaster. It’s the appalling toll on school administration staff and principals that should cause Education Minister Adrian Piccoli to go back to the drawing board on school software systems.”

“Local Schools, Local Decisions was supposed to provide greater flexibility and value for money for principals. So far all it has delivered to school communities has been unsustainable workloads and threats of debt collectors. The time taken for staff to deal with these administrative matters has had inevitable impacts on student learning outcomes. The Minister and his department must put an immediate halt on any further rollout of LSLD before even more NSW public schools are burdened with this administrative nightmare.”

The news comes as the Sydney Morning Herald reported late last week that the system’s failure was resulting in debt collectors threatening schools that had failed to pay suppliers. The NSW Teacher’s Federation has reportedly called for schools to withdraw from the trial of the system.

Despite the reported problems, however, the most recent audit of the project found that it had been delivered only a little late and only a little over budget.

In November last year, the NSW Auditor-General published a report into the system (available online in PDF format). At the time, the report stated that during the 2012-2013 financial year, the project’s budget was increased to $394 million, as the department had spent $373 million of the project’s initial funds, representing some 94 percent of its initial budget, as well as incurring $36.6 million in recurring costs that year. The project’s total capital cost was in November estimated to be some $458.7 million.

The project continued to have successes in certain areas. For example, the first ‘Human Resources and Payroll’ release was deployed to the TAFE Northern Sydney Institute in July 2013. Staff received their first pay using the new system in August 2013 with subsequent pays also running successfully, according to the auditor.

The ‘Human Resource and Payroll’ release was deployed to the TAFE South Western
Sydney, Sydney and Hunter Institutes in October 2013. The Department advised the auditor’s office there were no significant issues with either deployment.

And the deployments were significant, involving 19,029 staff being paid across 14 weeks, including 8,289 staff from four institutes in the most recent pay cycle. 5,470 leave applications were logged in the period tracked, with 5,078 approved and 392 waiting for approval with no errors.

In addition, a ‘Student Wellbeing’ package was released to 229 schools in September 2013 and the third version of the ‘Budget and Planning Consolidation’ package was released in October 2013. The Department advised the auditor’s office there were no significant issues with either of these releases.

However, the audit report also noted that a number of other programs of work had been pushed back significantly — in some cases by up to a year.

I don’t have a lot of inside information about this project. However, I will make two points about this week’s claims being made by the Greens.

On the one hand, we’ve certainly seen plenty of ERP projects fail in Australian state governments, and recently we have seen a few based on SAP software. What is happening with the LMBR project is not new and these kinds of problems are to be expected with a deployment of this size and type. In fact, if anything, I am actually surprised it hasn’t gone off the rails in a manner far worse than this, as we’ve seen with other projects (for example, Queensland Health’s disastrous payroll systems upgrade).

In this sense, the Greens’ complaints here are legitimate. There is pain being felt out there in the real-world in schools and by their suppliers, and it is certainly the fault of the bureaucrats back in the education department’s head office, along with their IT suppliers.

However, I would also point out that in large part, the LMBR project is necessary and the audit published in November showed that quite a lot of the project is being successfully delivered, or already has been. The budget increase and time blowout being suffered by some portions of this very large and complex project are not yet extreme for a project of this kind.

The fact that the Greens and the NSW Teachers’ Federation are calling for the project to be halted, scrapped or re-worked indicates that neither really understands the complexity of the body of work going on here. Would you scrap the construction of a school building halfway through? No. Would you stop building a highway halfway to your destination? No. Major software projects such as this one are large and complex and require sustained effort to be completed. The complexity is often akin to building a massive skyscraper, or even more so.

The evidence as it stands shows that much of the LMBR project has been delivered and it would be foolishness to stop now. Based on the most recent audit, the NSW Department of Education needs to see this one through unless it can be irrevocably shown that the project has failed. Right now, the evidence so far (and I recommend you read the audit report delivered in November, which John Kaye’s media release does not mention) does not support the LMBR being wound back.

I’m happy to be corrected on this one; whistleblowers in the Department of Education and Communities can contact me anonymously with information here.

One last thing … let us not forget that the bigger lesson here is actually about ongoing investment in IT. If the NSW Department of Education and Communities had invested regularly in its administration IT platform, instead of letting it sit since 1993, it would not be suffering this ‘big bang’ project problem right now. Ministers need to become accustomed to investing regularly in incremental technology projects within their departments … instead of only consenting to funding allocations when old systems are on their last legs.

Image credit: Natalie Singh, royalty free


  1. I recently had an interesting and very private conversation with a SAP employee involved in a number of these high profile projects – this person described life in very Enron like terms.The amount of money that they were earning, the amount of money Gov was spending and that the money wasn’t real… it was like this person was in fantasy land.. It was quite bizarre, as though this person had lost all sense of reality.

    I guess I got a glimpse of the other side of these projects – the hidden part that we are never meant to know about.

    • To the taxpayer the money is real. Even more so if the money is being paid for ‘stuff’ that does not work or is no better then what it replaced.

      At some stage governments will realise that ERP vendors are yesterdays technologies. At some stage…..

  2. The fact that the project was started in 2006 should tell you that it is now probably a problem. Technology and ideas have moved on a long way since then.

  3. its a pilot system test to a small set of users (yes 300 is small). Typical newspaper dribble

    • Pilot generally implies a reasonable chunk of functionality is there and the phase is to iron out any unforseen issues. Considering the program was established in 2006, you’d hope it is ready to roll out!

      Issues such as those described, especially it being completely unusable, unreliable and having dismal usability are not pilot phase issues generally.

  4. So yet again, another massive chunk of public money thrown down the drain. When will Australian government and business realise that SAP is a horrible choice. As mentioned by others it is yesterday’s technology.
    It is slow, clunky, inflexible and that god awful UX!
    You think after so many public failures the truth would start to set in that it is not a good choice anymore

  5. The only reason such sums are spent is because it’s anticipated the system will save money in the longer term by allowing the same work to be done with fewer employees.

    Unfortunately the DEC IT department itself has been so rigorously restructured, there’s barely anyone but contractors on the ground. Such a large and complex project requires people with not only the expertise, but importantly the commitment to live-and-breath the project over several years.

    I predict that, having now blown the budget comprehensively, they will eliminate those positions, whether or not the system ever actually works as planned. And yes, SAP is a horrible choice.

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