Taking the lead from the private sector

"We put a stake in the ground and said 'enough is enough. We have to bite the bullet'." That was the view of Auckland Regional Council before it splashed out over $1 million on replacing eight different financial and allied systems with a single suite from SAP.

“We put a stake in the ground and said ‘enough is enough. We have to bite the bullet’.”

That was the view of Auckland Regional Council before it splashed out over $1 million on replacing eight different financial and allied systems with a single suite from SAP.

CIO Tony Darby says the regional council was the first local government organisation in New Zealand to adopt the German software in 1999. It’s more than just a financial package, he says, doing the council’s HR, payroll, organisational structure, workflow and projects.

Darby says large corporations like Carter Holt Harvey had adopted SAP and local authorities were watching the private sector and government departments switch to it. The system was initially aimed at large organisations but it eventually “came down the food chain” for local bodies, so ARC took the plunge.

The ARC used a template from a Crown Research Institute in developing its system, which in turn led to a template for Christchurch City and Wellington Regional Councils, when they also adopted SAP.

Darby says, to play safe, local authorities tend to follow private firms in seeing what is used.

The ARC chose SAP because it offered an integrated solution across a range of functions and was installed in just five months. Prior to that, the eight varied systems meant many manual processes, with “Excel spreadsheets everywhere”.

Darby says organisations are reluctant to replace financial systems but they need to assess the cost of existing systems in terms of time and paperwork in producing reports, reconciling information, maintenance and the like.

The regional council had “clipped on loads of individual systems” and systems became very complex.

While $1 million may seem a lot, Darby says integration between the consents processes and SAP will reduce the council’s “work in progress” billing by $500,000 a year. Month-end processes now take three days instead of 23 and payroll functions use the equivalent of half a staff member instead of two.

“You can build up a case fairly easily if you understand what the business is trying to achieve,” says Darby.

Usually finance departments push for new projects for them, when instead it should be IT staff, as was the case at ARC, he says. “We were the ones pushing the business case. We pushed the thing in and then we led the project.”

Looking back at the implementation and seeing what might have been done better, he says plenty of communication is needed with council staff to ease the adoption of new systems. Staff also need to be better trained and to realise adopting the software is fundamental to the business.

“There was always a problem of acceptability with financial systems. We got there in the end but it probably took six months more than we would have liked for the acceptance phase to come in,” he says.

Earlier this year, the system was upgraded to allow employee self-service over HR matters, filling in timesheets and spreadsheets online, plus online processing of purchase orders.

Making the switch

Over the Harbour Bridge at North Shore City, the council has used the GEAC-supplied Total Corporate Solution since 1986. CIO Tony Rogers says TCS is a purpose-designed suite of models for local government covering land administration, rating, budgeting, general ledger, accounts payable and receivable, building and resource consents.

But support for TCS will be withdrawn in 2004, he says, and the council hopes to have the new system in place in July 2003 after beta testing later this year. It is looking at GEAC’s new application called Pathway. “It is quite a swish set of applications now being phased out,” Rogers says.

“Most of us were pretty comfortable with TCS. It was a good application, way ahead of its time. [But] it went through many upgrades, the code got messy and it became ridiculously hard to support. As software ages, it becomes very complex. It was written in a language called RPG, which is a bit dated. Pathway will use Uniface, a fourth-generation language, which is easier to use,” he says.

TCS uses old green screens, while Uniface is Windows-based. It also offers more functionality and more integration to packages like GIS information systems and electronic document management.

Rogers notes that when planning an upgrade, councils must ensure the new systems fit the needs of the organisation, which for councils include meeting the various Local Government and Rating Acts they must comply with.

Another council facing a switch due to changes at GEAC is Thames-Coromandel District Council.

It has used the GEAC Gems financial software since June 1999, and prior to that, a Canadian system called Local Government FSG, which it had for just a year.

Gems is nearing the end of its life, so the Thames-based council is looking to adopt a new system by June 2003. “There’s a number of councils in that boat,” says IS manager Jeff Shaw.

The council has budgeted $200,000 for the change and is looking at an upgraded GEAC product. Shaw says he hopes for a system that will last more than two years, blaming “bad timing” by the council.

“You can never predict that someone would buy out Gems and replace it with something,” he says.

He wants the new system to be more user-friendly for both staff and public, something with more web-enabled features like e-procurement and online payment of bills.

Shaw’s advice: Keep the accountants involved. Get systems that are functional for them. Rather than have the bells and whistles, get the basics right. Sometimes the IT people make the decisions rather than the end-user.

A certain future

Someone else who might have had to change systems but no longer has to is Tauranga District Council.

Since 1998, it has used Origen, supplied by Tauranga firm Origen Technology, which faced an uncertain future earlier this year, following the death of company founder Tony Dixon.

Origen offers a fully integrated financial, land information and regulatory system that “pretty much runs right across our organisation”, says IS manager Robyn Dines.

The software integrates with the council’s Microsoft systems and “there’s not much it doesn’t do”, she says.

Dines says it being locally made was not a factor in the TDC choosing it, but rather it being “very cost effective and covering and broad range of applications, offering more modules than the others”.

Origen was recently taken over and its new owners Roy Simpson and Richard Hunter have pledged their commitment to the Origen language, which is linked to the IBM’s Universe version of the Pick language. Thus the council is sticking with Origen, for now.

Previously, Tauranga District Council used an old Sanderson system that was nearing the end of its life and was less flexible with fewer functions.

Dines advises anyone looking to switch financial systems to work well with the supplier to ensure it meets your business needs.

Environment Canterbury installed the Danish-made Navision system in 2001. Prior to that, the council used Decfin, a New Zealand system used by many of our local bodies.

Financial services manager Neil Mayo says Decfin was 20 years old and the council wanted a new system with a Windows look and feel and one that could do project management.

The upgrade cost $300,000 including staff training, software costs and installation. The main difference for users, says Mayo, is the accounts now have a “matrix structure” with general ledger reports, various modules, status reports and key dates for projects.

“It is quite complex, but we are very happy with it,” he says. Mayo also says efficiency savings arise because staff can do more work themselves, they print less copy, and using Crystal to drill down into reports means they can find things easier.

Environment Canterbury is now looking at user portals that work through the internet.

“That would be useful because one of our subsidiaries has staff throughout New Zealand,” he says.

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