Housing NZ didn't rule out adviser providing software

Whistleblowers say existing software could be modified for a fraction of the cost of replacement plan

Housing New Zealand has admitted it did not preclude consultancy Deloitte from bidding to implement a $43.6 million information technology project when it appointed the consultancy as its strategic adviser.

The Crown-owned corporation has also confirmed it paid some consultants working on the Enterprise Transformation Programme (ETP) project $600 an hour. Computer Society chief executive Paul Matthews says that is "certainly very much at the higher end of the spectrum".

"You would expect that if people were receiving those sorts of rates they would have expertise that was very much in demand."

Housing NZ corporate services manager Roy Baker says it decided to invest in quality advice up front and the market set the rate for some of the individuals.

Housing NZ is understood to be negotiating contracts with British company Northgate and with Oracle to replace its software.

Staff from the corporation visited Northgate, Oracle and SAP reference sites in Britain, North America and Australia as well as SAP's headquarters in Germany during four trips last year, according to information released under the Official Information Act.

Opposition housing spokeswoman Moana Mackey said in Parliament that another consulting firm, Resultex, had advised the corporation that its existing software systems were fit for purpose.

Baker says that although he understands "there are some people who do not believe that change is necessary", he firmly believes the ETP project will increase the corporation's ability to "improve services to those who need our help".

He says a number of Housing NZ's core computer systems are "past their expected lifespan and are no longer able to adequately support the corporation's needs".

This has been disputed by whistleblowers and former managers, some of whom have claimed its software could have been modified at a fraction of the cost.

Baker says the ETP project has been monitored by the State Services Commission, the Treasury, Independent Quality Assurance New Zealand, and Ernst & Young. "To date these agencies have expressed strong support for the Enterprise Transformation Programme."

Jason Ryan, a spokesman for the State Services Commission, which has the main responsibility for external monitoring, says the commission has not sought to contact TechnologyOne operating officer Roger Phare to discuss concerns he expressed last month.

TechnologyOne supplies Housing NZ's existing financial and business intelligence software. Phare said its software had recently been upgraded, replacing it with Oracle software was "lunacy" and Housing NZ had exhibited a lack of due diligence.

"The point that a whistleblower made is absolutely correct. They have now got a very full industrial-strength enterprise system. Definitely the Oracle purchase is unnecessary and in fact would send them backwards." Northgate's software would replace a separate specialist application, Rentel.

Ryan says the commission does not typically talk to other vendors as part of its monitoring process, and didn't in this case.

Housing NZ has experienced change in its management ranks in recent years. Eight direct reports to chief executive Lesley McTurk have left Housing NZ since Ms McTurk joined the corporation from Christchurch City Council in January 2007, while 19 second and third-tier roles have become vacant, not including roles that were disestablished.

A spokesman says individuals have "joined and left for a wide variety of personal and professional reasons".

Housing NZ says it has spent $9.6m excluding GST over two years preparing the business case for the ETP project, including consulting costs of $6 million.

It has paid consultants Deloitte, KPMG, Ernst & Young, PricewaterhouseCoopers and Independent Quality Assurance – all of which have provided advice – a total of $15.6 million, excluding GST, since July 2006. That includes payment for unrelated work, such as auditing, tax advice and services related to Housing NZ's urban renewal project in Tamaki.

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