IRD abandons Oracle student loans system after spending $21m

Government department will upgrade existing FIRST system instead

Inland Revenue has abandoned plans to use Oracle to deliver the legislative changes to student loans contained in the Student Loans Scheme Bill. Instead, it will upgrade its existing FIRST system.

Peter Mersi, deputy commissioner business transformation, says it became apparent during the design phase that extracting the loan history and migrating data from the old system to the new system was more complex and time-consuming than expected.

“It would not have been possible to build and populate a new system in time for important changes to student loans expected to come into effect next year,” he says.

The project to build the new system was approved by Cabinet in 2009 and begun in 2010.

“To date, we have spent $21 million out of $35 million allocated by Cabinet,” Mersi says.

“By taking action before the more expensive build phase was entered, we have managed the financial and delivery risks. It is expected that the upgrade to FIRST can be completed within the existing budget for the project.

“We will be able to use elements of the new Oracle product.”

He says the upgrade should enable legislative changes affecting students to be put in place by April 2012.

“Borrowers will be able to notice improvements, such as being able to see their total borrowings without having to contact both the Ministry of Social Development’s StudyLink and Inland Revenue.

“While the new student loans system was intended to be the first component of a new computer system for the department, the complexity of student loans made this unrealistic given the legislative time frames.”

Changes to student loans are widely anticipated in next week’s Budget.

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