Housing NZ board approves controversial IT project

Claims of $70 million in savings are robust, Housing NZ says

Housing New Zealand’s board has approved the business case for the organisation’s controversial computer upgrade.

The development team will shortly be "entering negotiations with preferred suppliers," says spokesman Nick Maling.

Maling would not identify the candidate suppliers, though SAP is said to be one.

Housing’s information system upgrade, known as the Enterprise Transformation Programme, is claimed to have the potential to save it $70 million a year. However, that figure was vigourously questioned by opposition MP Moana Mackey, who says it is difficult to imagine what Housing could have been doing so wrong that a computer system change would save that much.

Almost $10 million has already been spent on bringing the project to approval.

Last week, Housing New Zealand defended its business case, saying it had been independently checked and was robust.

The savings figure has been checked by consultant KPMG and Independent Quality Assurance New Zealand (IQANZ), Maling said. The business case was run in accordance with the IT Monitoring and Gateway review processes developed by Treasury and the State Services Commission.

“I can confirm that the full costs of the programme to date have been $9.574 million, excluding GST, over two years,” he says.

Mackey claims “internal sources” have told her the true cost is about $20 million, but even $10 million is “worrying”.

“$10 million could pay for a lot of houses,” she says.

Maling declines to go into further details on the cost or the components of the $70 million per annum saving. Computerworld asked specifically whether part of the replacement issue related to software that the vendor no longer supports; this question was not answered.

Housing’s systems have had to be upgraded because they are “outdated, and costly to maintain”, Maling says. “Many don’t talk to each other properly and are inhibiting our business, and what we can do for the people that need our help.

“As one example, our core customer management system is 18 years old, and has been customised to cope with the Corporation’s requirements. It is a complex process to change the core system, and a longer lead time is needed than with modern configurable technology platforms.”

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