Datacom in discussions over Novopay contingency plan

Minister in charge of troubled payroll system announces ministerial inquiry

The acting secretary of education Peter Hughes has begun talking to Datacom about a contingency plan which may involve replacing Novopay.

Cabinet minister Steven Joyce, who announced a ministerial inquiry and technical audit on the troubled teachers payroll today, says Hughes has “commenced dialogue with previous supplier Datacom”.

The Ministry of Education signed the contract with Talent2 for Novopay in August 2008 and it was to be implemented two years later. But there were delays and it went live in August last year. During that time Datacom continued to provide the payroll service which it had developed as a bespoke service since 1996.

Today, Joyce told that rolling back on Novopay was "not a decision you would take lightly" and he would prefer not to "jump horses".

In the meantime, Joyce says solving software problems will be accelerated, and further resources and staff would be poured into fixing problems which have seen hundreds of teachers go unpaid and schools go into the red.

He says the extra cost is likely to run to millions of dollars. The government will supply cash and resources in the interim, until contractual issues were worked out with provider Talent2.

The technical audit would be carried out by Murray Jack of Deloittes to examine the "stability" of the payroll system, and Joyce says it will report back on whether problems were "critical".

The audit will include results from an audit currently being undertaken by Ernst and Young.

Joyce says Novopay is one of the largest and most complicated payrolls in Australasia, and he stressed there was no quick fix.

It was "too challenging" to say when teachers would begin to be paid properly, but the remediation plan stretched "to weeks, even months".

Joyce will take a proposal for a ministerial inquiry to Cabinet and it is likely to take three to four months. But he doesn’t want an inquiry to get in the way of fixing the problems.

Joyce was handed responsibility for fixing Novopay after Education Minister Hekia Parata and former associate Craig Foss failed to get to grips with the debacle.

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Matthew Jenkinson


It's great that both Ernst & Young and Deloittes are auditing the system to determine its stability. Perhaps KPMG and PricewaterhouseCoopers should be consulted as well to ensure the minister is getting the best possible advice.



I wonder if Datacom bid against novopay but lost because a)being the incumbent they knew what was required intimately and so therefore b) lost because the price was more 'expensive'.

Govt will never stop buying on up-front sticker price. They talk about risk mitigation, long term sustainability, total cost of ownership and protecting stakeholders long term interests - but it is all bollocks. "Give us ya cheapest up front price please and we know best."

I hope Datacom puts a premium on their return.

Anonymous if Blank


Parata says the fact that some MoE staff didnt get paid is "Karma.'

Parata justifies her lax signing off Novopay on the grounds that "hindsight is wonderful."

Glib, unacceptable fob-offs from the government's Great Communicator. Huge amounts of public money have been squandered. As the responsible Minister at the time she has an obligation to answer questions about her accountability straightforwardly and directly. Otherwise she should go.



does anyone know where you can get a copy of the 'report" that has been referred too in various news articles. I am interested in using it as a problem solving case study for my class if anyone has any other interesting documents you can refer me too.




I heard that Datacom simply outsourced the entire management of the school payroll system to the company that originally built it.

Does anyone know if this is true?



Modern day version of INCIS. RIP INCIS as you have been superseded my friend.

Takes two to tango. so shared blame with mass in-competence on both sides. And everyone ducks for cover and takes no responsibility. Meanwhile our poor teachers cop the lot!

Suggest you could halve the size of MoE and you would not notice any fall in productivity, and projects would be simplified and successful. Talk about too many chiefs and indians!

Matthew Jenkinson


Apparently the minister is unaware of Brook's law when it comes to software:

"Joyce says solving software problems will be accelerated, and further resources and staff would be poured into fixing problems which have seen hundreds of teachers go unpaid and schools go into the red."

Matthew Jenkinson


How much does the minister know about data modelling? The ongoing issues with Novopay are indicative of flaws in the design of the data model rather than bugs in the software.

If the data model being used accurately reflects the complexity of the ministry's payroll then the software will naturally become more stable over time as bugs are found and eliminated.

Unfortunately what is more likely is that the developers are struggling to adapt an inadequate data model to fit the expectations of the ministry. If this is the case then it will take years to put the necessary kludges in place to make it work correctly. It will also make any ongoing maintenance inordinately expensive.

Talent2 probably started the development process using a data model that was developed for another company or organisation. This is a fundamental mistake many developers make when developing software. The analysis and data modelling needs to be done from scratch to correctly fit the organisation concerned because each one will inevitably be different.

Matthew Jenkinson


It would be very interesting to know how deep the ministerial inquiry and technical audits will go. Will any of them be looking at the actual analysis, design and development processes being employed by Talent2? And how compliant will Talent2 be in providing this level of detail in order to determine where the fault lies?

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