Housing NZ denies $72m project is 'imploding'

Claims that Housing New Zealand's transformation project is in trouble are refuted

Some staff and vendors close to Housing New Zealand’s $72 million transformation project claim it is in trouble, but the state owned enterprise refutes their allegations.

“The business is not buying into it and it’s imploding,” one source closely connected with the Housing NZ project told Computerworld.

Another says there have been no proper business specifications done, no business architecture or process model. “No solution has been specified for how it should operate,” the source says.

Computerworld has been approached by several people outlining what appear to be major issues around the transformation project. Some are from vendors, some internal. None wish to be named.

There have been nine IT redundancies in the past few weeks.

Over the past four years Housing NZ has laid off 130 staff. The Public Service Association says it understands more change is coming.

Oracle and British software company Northgate have won the business to implement software for the enterprise transformation project to eliminate some manual processes and let field staff record details of property inspections using tablet computers.

HNZ chose Deloitte as its strategic adviser for the project.

The Oracle and Northgate software are to replace existing core systems: Rental, which was a bespoke development in the 1990s, and Finance 1.

The Dominion Post reported last year that whistleblowers and former managers questioned whether the spending was justified, saying the existing systems could have been modified to deliver the extra features at a much lower cost. It was claimed there was a conflict of interest for Deloitte, which has a practice implementing SAP and Oracle.

“A lot of people have left, and the project is virtually being run by individual contractors,” a source says. “It’s a governance issue.

“Oracle is struggling with delivery. You have to ask what oversight the board has.”

Oracle is due to deliver on March 31. When approached by Computerworld, Oracle referred all comment back to Housing NZ.

Earlier this month Housing NZ issued a request for proposal for information, communication and technology services. The successful bidders were Fujitsu, for infrastructure field services; Dimension Data, for hosting services; and Red Rock, for Oracle-related database services and operational management for Northgate.

In May, Optimation won a three-year contract for managed testing services. Computerworld understands it has moved from a fixed-price model to time and materials because it can’t get a fix on what it is supposed to be testing against.

Computerworld asked Housing NZ to respond to the claims of problems affecting the project.

CIO Paul Jepson says in an email: “Housing New Zealand is committed to having our ICT services delivered in line with industry best practice. As part of this commitment, we ran a RFI/RFP process in the market in compliance with government procurement guidelines. The results of this RFI/RFP process have been the selection of Fujitsu to deliver field services, Dimension Data to deliver infrastructure management, and Red Rock to deliver applications support and maintenance.

“Outsourcing these services has resulted in changes to Housing New Zealand’s internal ICT organisation and affected some permanent and contract positions. These changes are part of our broader strategy to improve the efficiency and effectiveness of ICT services delivery for Housing New Zealand.

“The project carrying out these changes to ICT and bringing our new strategic partners on board is tracking to plan.”

There have been suggestions that the project is out of budget. When asked whether Housing NZ was seeking more money a spokesperson for Housing Minister Phil Heatley responded: “Housing NZ advises that the project is on time and on budget.”

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