Published on the 19/08/2016 | Written by Donovan Jackson

Decision could cost ‘a massive amount of money’…

Led by the Department of Internal Affairs (DIA), the New Zealand Government is trumpeting the anticipated advantages of entering into a wide-ranging agreement with Oracle – but some in the analyst and service provider space have serious reservations, with an Australian analyst predicting parallels with the IBM Census debacle.

Acting NZ Government technology officer Russell Cooke said the agreement entered into with Oracle ‘cements an 18-month commitment from many agencies across government and shows the strength of agencies working collaboratively’. “This is a significant milestone for New Zealand’s public sector that will generate substantial savings and benefits for all government agencies,” he added, in a statement.

The statement issued by the Department said the agreement has an initial three-year term, which is also expected to save time and resources through a simplified procurement process.

However, there was no dollar amounts put to those savings and little explanation of how they might be realised.

Instead, offered Cooke: “We have established the New Zealand Government as a single customer, which has given us a number of direct benefits including the scale to negotiate more favourable and flexible terms, particularly around costs and minimum commitments. This approach has enabled us to negotiate substantial savings and benefits tailored to government needs and requirements.”

In the absence of figures, and given high profile local, national and international government ICT failures which typically involve many millions more of taxpayer dollars than initially anticipated, scepticism is arguably justified.

Approached for comment, Melbourne-based IT probity advisor Darryl Carlton raised a number of red flags. By email he said, “The failure here is the same as what was evidenced in the ABS Census fiasco. Senior management are making commitments that they do not understand and they cannot comprehend the consequences of those decisions. They are misled by hungry sales people that are not concerned with the welfare or performance of the organisation.”

Carton added that Oracle has been selling the ‘whole of catalogue’ approach for a few years now. “They generally approach the non-IT executives and convince them of the savings associated with committing to the entire portfolio of Oracle products.”

This strategy, said Carlton, is designed to ward off ‘shadow IT’ efforts which generally favour cloud and SaaS solutions. “By getting the top of the organisation to commit to an entire Oracle portfolio they create a situation internally in the organisation where choosing any other solution gets refused, on financial grounds, on the basis that ‘we have already bought Oracle’, so any other expenditure is wasted.”

That’s problematic, explained Carlton, because it ignores the total cost of ownership, “Where implementation and modification costs far exceed the ‘sticker price’. Organisations become locked in to technologies that don’t work for them and expensive implementations. This will cost the Government a massive amount of money and it will delay their shift to genuine cloud and SaaS solutions.”

In its own statement, Oracle NZ MD Robert Gosling said: “The agreement, which is closely aligned with the Government’s ICT Strategy, allows New Zealand’s government agencies to make use of Oracle’s extensive cloud services to gain reductions in cost, increased operational agility, improved security, and to enhance service levels to the people and businesses they support.”