The new IT system for the IAG insurance company has been subject to further delays and the company believes it won’t reach even the first phase of its implementation before the last quarter of the year.
Originally the project – known as Endeavour - was scheduled to be completed by mid-2003, but industry sources now express little faith in it being fully operable before early 2005.
Company spokespeople say the development has hit unforeseen problems in system testing, but insurance industry sources, who predicted last year that there would be delays, say that the system may have been inadequately specified at the beginning of its development.
The mid-2003 estimate was subject to an extensive rethink following the ASX-listed IAG's acquisition of NZI early last year. At that time, a new implementation date of May to June 2004 was set. The latest deferment means that the system is nearly 18 months late on its first estimates.
"Our timeframes have been extended due to some unforeseen issues that have arisen during system testing," says IAG spokeswoman Kate Nelson.
"These are currently being fine-tuned both here and in the UK."
The Sirius system on which Endeavour is built originates from the UK, and industry sources said at the beginning that Sirius was in an incomplete state.
"In some instances this work has held up progress in other areas of the project," Nelson says. "However, we believe these are all normal issues that you would find in developing and testing a system of this size, and we remain satisfied that we have plans in place to address them going forward."
IAG's chief information officer, Catherine Rusby, was unavailable to enlarge on this account last week.
"The amount of testing was adequately estimated," Nelson said in further emailed replies.
"However, we did find some additional bugs and functionality expectation differences that we are now addressing. The whole point of testing is to ensure that we identify and resolve as many issues as possible before going live and ensure the system is delivering the functionality that our business requires. We don't believe we should jeopardise our customers or business simply to meet a date."
Company spokespeople declined to comment on the ongoing cost of the delays, rumoured to be as much as $1 million a month. Asked about the need to update the legacy system in parallel, they acknowledge this is being done, as would be expected.
"As part of our regular business practice, we constantly assess the health of our current legacy systems to ensure they are meeting current customer and staff needs."