Novopay wins two-month reprieve

Datacom system not ready to take over, says Steven Joyce

Despite a wide range of faults identified in the current state of the Novopay school payroll system, Deloitte’s technical review says the system can be made stable to deliver payroll for the next eight to 10 years.

However this will depend on the Ministry of Education and developer Talent2 devoting enough resources to the effort. “Materially elevated and sustained effort” is needed to achieve stability, the review says.

Deloitte recommends sticking with the effort to put Novopay right for at least another six weeks to two months, though the responsible minister, Steven Joyce, reserves his right to take a different course sooner than this should he and his advisors deem it necessary.

The most likely alternative solution would be to revert to a system provided by Datacom, the provider of the previous payroll service, but despite a major effort by Datacom on developing a back-up plan, this is not at a workable stage yet, says Joyce.

“Datacom has done some very good work on their alternative proposal and I thank them for that, but switching to Datacom at this time would involve further substantial risks that would have to be borne by the ministry and schools,” he says.

Asked “if Datacom were ready now, would you ditch Novopay?” Joyce said he wasn't willing to deal in hypotheticals and says even if that were the case, it would not be a clear-cut decision.

The third choice, to re-tender the payroll project, would involve as much as two years’ further delay and considerable extra expense, he says.

The Technical Review points out that there are areas in which Novopay’s “system functionality does not adequately support the business processes”. Usability issues and a lack of input data validation contributes further to processing errors, Deloitte says. Reports generated by the system are “sometimes poorly presented or inconsistent”, detrimentally affecting visibility and control by schools.

However, the root causes of the problems have not been identified by the review, Joyce says; “that is not its function.” The question of root-cause diagnosis is one for the separate ministerial inquiry, he says.

Apportionment of fault and penalty payments is also a question that has been left largely in abeyance. People skilled enough to sort out who is to blame and in what proportion are a scarce resource and better employed remedying the faults, he says. Government has formed views on the question, as has Talent2, and those views are, as might be expected, different, Joyce says.

As of March 7, there were still 44 “very serious” defects in Novopay, Deloitte reports. This number needs to be reduced to no more than 10 over the next three months, its review recommends. There are in total 500 defects, down from 613 when the remediation programme started.

“Processes that support the [development] and management of workarounds [for these faults] need to be raised to a mature level”, says Deloitte. “The risk of poor data in the system through workarounds and point fixes needs to be mitigated through specific analysis and quality management plans.”

Deloitte lays out a number of recommended actions to be taken immediately; these include strengthening the remediation programme and establishing “a dedicated team with clear leadership accountability, to manage resolution end-to-end.” That unit is now being established within the Ministry of Education under the leadership of Cathy Magiannis, former CEO of Gareth Morgan Investments Group and former Inland Revenue deputy commissioner.

Meanwhile $6 million has been set aside by the government from its “between-Budgets contingency fund” towards meeting the costs of additional work that the Novopay faults have made necessary. This will be apportioned according to the number of full-time-equivalent staff at each school.

SEE: Novopay Technical Review (pdf 623 KB to download)




I asked my stay at home wife a question.....
Datacom typically ran the Teachers payroll application for the past 10 years with a 1% error rate... based on what you have herd from the Media over the past 6 months, what do you perceive to be the failure rate of Novopay?
Her response... 40%+
When I told here it was 1.9% she was astonished.
I am not saying that the T2 solution is perfect, and I feel sorry for the Teachers and their administrators that have to deal with this mess, but the Union's and the Media are stirring this story up on a daily basis to embarrass the Ministry of Education.
The Ministry needs to treat Teachers with more respect and ensure this project is finally delivered - there is no going back to Datacom now. The Union's need to stop turning this story into a Circus and focus on building a better relationship with the Ministry. Ironically, A teacher told me that because the Unions have negotiated the largest set of weird and wonderful payments and subsidies for the 100,000 teacher's it has made the payroll run so complicated that it is actually effecting the vary members they have been negotiating for.... Maybe the Ministry let Novopay go live as one final salute to the Unions, eye for an eye and all.... if this is the case, then the relationship is truly beyond repair. Thoughts?.....
BTW - I don't work for any of the companies mentioned, but know enough people in IT to be frustrated with this on-going saga.



I don't see how they can go back...

This blog states it a little better than I can

but basically, as time passes with the new data structures the ability to return to what you had requires the same effort to have made the change in the first place...

There is no going back.



Looks like the data is screwed after all..

"Data quality has been affected by system issues, raising the risk of future errors"

"Quality controls on data entry have not adequately prevented errors"



So, data quality was less than adequate. Datacom ran a service desk for years to deal with problems on their system. The only reason we didnt hear all the problems was because of this dedicated service desk which addressed issues as they came up and made no effort to address the real issues.Of course the data would 'always' be fine on the Datacom system because it was so loose and had people 'fixing' it.

So it begs the question, did Datacom give Talent2 dud data? Any application would be in trouble if it were built on the assumption of clean information, yet is provided with poor data.



I think we need to be very careful about contracting large contracts to outside NZ based companies. New Zealand needs the income and revenue to stay on our shores.



Even the supposedly hard man Joyce cannot take a hard decision. After all a hard decision would not be a popular decision! Also, how can he send a signal to business, especially IT Business to put up or ......!



Typical anodyne response by Deloittes. This is what you get when you have accountants pretending to do IT.

Matthew Jenkinson


Hopefully the planned software upgrades will improve the situation with Novopay.

If not it may be worth looking at the data model being used to see if it correctly models the requirements of the ministry.

Often on-going technical problems are a sign that the data model being used is incorrect.

A very common mistake developers make when developing new software for an organisation is to begin with a data model that was developed for something similar rather than starting from scratch.

Because Talent2 have developed payroll applications for other organisations they may have started the development process with a data model that was designed for another organisation.

If this is true then their initial analysis and design of the data model needed by the ministry will be skewed towards that other organisation.

Trying to massage the software to fit the ministry's requirements will then be like trying to put a square peg into a round hole.

Because each organisation is so different the software developer really needs to begin their analysis and data modelling from scratch.

Most software developers won't tell you this because they don't do it.

They mistakenly believe that it will be more efficient to begin the process with something rather than nothing.

With customised software it is better to begin with nothing rather than something because that something will probably cause the type of complications apparent with Novopay.

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