Published on the 18/12/2024 | Written by Heather Wright
NSW harmonisation of ERP not all smooth sailing…
An AU$200 million New South Wales government ERP shared services platform now has ‘most’ agencies onboarded, but an Audit Office of NSW report has highlighted some of the challenges the project has faced.
The SAP-based myWorkZone system is part of NSW’s Process and Technology Harmonisation (PaTH) program – previously the ERP 20. Program – which kicked off in November 2021 with an estimated $187.3 million allocation from the Digital Restart Fund.
“This led to excessive user access… and increased the risk of unauthorised transactions or changes not detected in a timely manner.”
It aims to consolidate government ERP and SAP systems in order to simplify and standardise corporate and shared service systems and support for more than 55 NSW Government agencies.
Digital NSW says the program has ‘delivered’ myWorkZone, which includes onboarding, payroll, vendor payments and financial reporting, to more than 60,000 NSW Government employees.
Most agencies were onboarded by October 2024, 19 months after onboarding began.
A AU$341 million federal all-of-government ERP project, GovERP, was dumped earlier this year, with a scathing reuse assessment finding little reuse opportunities for the work already done.
The PaTH program of work, meanwhile, saw PcW paid $12 million over two years to develop a data migration strategy, while Accenture won the initial $163.7 million deal to deliver the system. That estimated contract cost has since been amended to $196.0 million for horizon 1 of the three horizon strategy.
Deloitte was also involved, winning a $1.5 million Blackline software-as-a-service contract. $4.3 million was also allocated for the BlackLine SaaS solution which will integrate with the multi-cluster SAP ERP PaTH system.
While the Department of Customer Service was initially assigned program sponsor, in keeping with most NSW whole-of-government IT projects, the NSW Department of Communities and Justice took over control of the project in late 2021.
The State Agencies 2024 financial audit by the Audit Office of NSW highlighted PaTH as a complex multi-agency program.
It highlights issues with training, documentation of project implementation and unclear accountability, along with a lack of key controls.
It notes that despite the development of a comprehensive training curriculum, no benchmarks were set or mandated for attendance, and there was less than 70 percent participation in courses such as purchasing and project portfolio management.
“Ineffective training ahead of system implementation increases the likelihood of operational errors and delays, reducing staff effectiveness in identifying and responding to issues,” the Audit Office report notes.
Key documents detailing activities such as data migration plans and tests, data reconciliations and approvals and signoffs for key milestones were also missing in action and could not be provided ‘within a reasonable timeframe’ by the DCJ. Others hand not been updated, leading the Audit Office to warn that the absence of complete or available documents can lead to delayed decision making, inaccurate reporting, compliance issues and increased errors, impacting project success sand stakeholder trust.
The report also highlights concerns inconsistent restrictions and segregations for key SAP transactions due to ongoing changes to systems, business structures and users groups. It notes the onboarding of a high number of agencies at the same time, each with their own unique business process requirements, scale and requirements, meant the internal control environment had not fully settled or matured.
“This led to excessive user access and inadequate enforcement of segregation of duties that increased the risk of unauthorised transactions or changes not detected in a timely manner.”
There was also a lack of clear arrangements around roles and responsibilities, including cost recovery arrangements, between the two shared service hubs – the DCJ and the Department of Planning, Housing and Infrastructure (DPHI).
The Audit Office report says the DCJ and DPHI have been working to address some of the ‘learnings’.
Catherine D’Elia, Process and Technology Harmonisation project sponsor, acknowledges early challenges, saying the team ‘has turned this project around because they leaned in and had dedication and determination to get it done’.
The team was restructured, governance improved and deliverables broken down into smaller agile deliverables.
“NSW is the first Australian government to be able to make a successful ERP work at this scale. We’ve got a lot of momentum now behind the success we have had to date.”
