€100 million down the drain on new IT system and counting...

DublinWriter

I was surprised listening to Mary Harney being interviewed on RTE this morning to hear about the new Health Services Payroll system.

It was initially budgeted at €9 million and has cost €100 million so far with another €50 million estimated to get it working.

It seems to be a fiasco that's three times bigger than Martin Cullen's E-Voting sham, yet why aren't the media jumping all over it?

Does anyone out there have any idea of who got the contract for this?

jbkenn

Beggars belief, where do we get these gob$hites???? :mad:

Here is a tip for Mary, try it out, what have you got to lose

http://www.clearcutpayroll.com/features.htm

jbkenn

Cork

Something really has to be done with public sector tendering procedures.

Could you imagine this happening in Ryanair?

We need public sector reform big time in this country. The public sector needs to be lean delivering services efficently. It seems to be big, bloated and inefficent.

ishmael whale

Background article here:

http://www.imt.ie/displayarticle.asp?AID=8711&NS=1&SID=1

Essentially its seems to be based on an implementation of SAP ERP. IBM seem to be involved in providing the system, but its not clear if they are involved in the actual implementation. The ‘National Project Team’ is based in Sligo for no apparent reason (presumably just for the crack).

HSE have a website on the project here:
http://www.ppars.ie/Public/public_home.htm

If €100 million has been flushed on this one project, its easy to understand how so much money can have been lost in the health services to so little avail. At a guess, the cost overrun probably involves buying SAP and plonking it into the middle of the arcane and obtuse practices of the Irish health services administration.

NewDubliner

Cork wrote:

We need public sector reform big time in this country. The public sector needs to be lean delivering services efficently. It seems to be big, bloated and inefficent.

Don't worry, it will be all sorted out by 'decentralisation'.

DublinWriter

Cork wrote:

Something really has to be done with public sector tendering procedures....

We need public sector reform big time in this country. The public sector needs to be lean delivering services efficently. It seems to be big, bloated and inefficent.

Well, in this case it's IBM who are delivering the service.

However I do agree with what you say about the public sector tendering procedures. There seems to be the old "You don't get sacked for buying IBM" mentality where one of the Big 6 (Accenture, Bearing Point, et al) get the business where IT is concerned.

Cork wrote:

Could you imagine this happening in Ryanair?

Well, the exactly opposite happened there. The idea to develop a web site that could take bookings was developed by a number of senior management who had to 'hide' the cost by from Michael O'Leary by chopping it up into smaller IT expenses. It cost them about 100K. Aer Lingus' site at the time couldn't take bookings and cost close to 2 million.

segadreamcast

Cork wrote:

It seems to be big, bloated and inefficent.

Heh, the system or Mary Harney?

Yeah - this is a bit of a disgrace, surely someone in the media would've leaped on it by now...

jd

DublinWriter wrote:

Well, the exactly opposite happened there. The idea to develop a web site that could take bookings was developed by a number of senior management who had to 'hide' the cost by from Michael O'Leary by chopping it up into smaller IT expenses. It cost them about 100K. Aer Lingus' site at the time couldn't take bookings and cost close to 2 million.

My understanding is that the booking system Ryanair bought had internet capabilities out of the box. Senior manager hid the fact from O'Leary cause they reckoned he would try and get the features removed, and look for a reduction in price. The much touted microcost for the ryanair site was for the Brochureware front end afair.

jbkenn

From http://www.ppars.ie/Public/About%20PPARS/Project%20Scope/project_scope.htm

The SAP system operates via modules. Each module covers a business function such as Personnel Administration, Shift Planning, Payroll etc. PPARS is building the SAP HR system by implementing different modules to meet the requirements of the Irish Health Service. The project scope includes the following modules:

# Personnel Administration (PA) -This module records details of an individual’s employment history, for example, grade, pay scale, contract details, employment status, personal details, etc.

# Organisation Management (OM) – The Organisational Management module sets out the organisation structure of the agency based on funded and additional funding of posts. In doing so, it reflects reporting relationships, jobs associated with positions, vacant positions, position occupancy levels, etc. It facilitates organisational reporting and personnel modelling.

# Time Management (TM) - The functionality of this module is used to record the planned and actual working times for an employee and to calculate the associated premium entitlements, which are used by Payroll for calculating an employee’s pay.

# Payroll (PY) - This module is used to calculate pay and deductions for each employee based upon data recorded in the Personnel Administration and Time Management modules such as grade, roster, premiums due, voluntary deductions etc. The Payroll module streamlines the process between the rostering and payment of salaries and eliminates the necessity for the completion of different documents for payroll, personnel, attendance, etc.

# Personnel Development (PD) – There are a range of modules under this function including employee qualifications. This module contains a qualifications catalogue that will be used to record employee skills/ qualifications and the corresponding requirements for a job. Personnel Development is also used to support recruitment, employee development, training needs analysis, succession planning and shift planning processes.

# Training & Events (T&E) – This module will provide a record of all training and conferences / events attended by all employees and will facilitate the scheduling and costing of such events. Functionality includes events booking, scheduling employee attendances, correspondence with attendees, recording course evaluation, etc.

# Travel Management (TL) (Expenses Only) – Facilitates the claiming and approval of travel expense claims and payment of approved expenses through Payroll /Accounts Payable using electronic data input. Functionality allows employees claim expenses using electronic claim form, facilitates on line travel claims approval, etc. In providing this functionality, the module provides management with enhanced control over budgets and compliance with budgets.

# Compensation Management (CM) (mass pay increases only) – This module will be used to plan and implement mass compensation pay increases across the health sector.

# Managers Self-Service (MSS) (pilot) – A web application that will provide managers with reports and updates for their employees.

# Employee Self-Service (ESS) (pilot) – This will enable employees update a limited set of their personal details and information such as name, address, dependants, bank details.

# Electronic Time Capture (ETC) (pilot) – Process by which the working times for employees can be entered into SAP via electronic time capture systems such as swipe cards.

Maybe it's me, I'm missing something, but could somebody point out the "rocket science" that justifies this obscene expenditure

jbkenn

DublinWriter

jbkenn wrote:

From http://www.ppars.ie/Public/About%20PPARS/Project%20Scope/project_scope.htmMaybe it's me, I'm missing something, but could somebody point out the "rocket science" that justifies this obscene expenditure

But are they implementing all those modules? I've been involved in a few PeopleSoft implementations and rarely would you see more than 2/3 modules going live initially.

ishmael whale

DublinWriter wrote:

But are they implementing all those modules? I've been involved in a few PeopleSoft implementations and rarely would you see more than 2/3 modules going live initially.

The various newsletters and circulars here suggest they have/did adopt a phasing approach to implementing the modules http://www.ppars.ie/Public/News/PPARS%20Circular/ppars_circular.htm

Deloitte also seem to have some involvement in the project.

http://www.imt.ie/displayarticle.asp?AID=8834&NS=1&SID=1
Experts earn Euro52m from new IT system

….According to a breakdown of expenses provided by the HSE, Euro52.4 million has been paid to external contractors and consultants since the software was purchased in 1998. The consultants employed were not named in the HSE statement but Deloitte and Touche have been among those companies contracted. They have been working on the project for the past two years.
Total costs of the implementation reached Euro126.4 million by June 2005, according to the HSE. In addition, spending has increased significantly since the end of 2004, the figures reveal. ….. The total cost of the project was originally estimated at Euro8.8 million and national implementation was expected to last three years. Those estimates were revised within a month of the project’s start date.

ishmael whale

Leaving aside Enda’s grandstanding, at least the new regime in the HSE do seem to be taking action on the basis of ‘if you’re in a hole, stop digging.’

http://www.rte.ie/news/2005/1004/health.html
…PPARS was to handle the salaries for more than 100,000 employees in the health service but has never fully been used.….
The Chief Executive of the Health Service Executive, Professor Brendan Drumm, is recommending to the HSE board that they stop further expansion of the programme until there is a re-evaluation of it.
Had the HSE continued the roll out of the programme the final bill would have been over €200m.

Of course, none of this penetrates the happy clappy world of the ppars project website. (www.ppars.ie).
On this morning’s radio, the Department of Health seemed to be doing an arms length thing, pushing responsibility into the HSE. However, they would seem to have been involved in the project board.

http://www.ppars.ie/Public/About%20PPARS/Project%20Organisation/project_organisation.htm
The project is overseen by a National Steering Committee under the chairmanship of Pat Harvey, CEO, North Western Health Board. The Steering Committee is representative of all the agencies, the Department of Health & Children DOH&C and the Health Services Employers Agency (HSEA).

The project board’s duties are described as including (unsurprisingly)

…..
Manage national issues and risks
….
Monitor progress and resource allocation

Plus, presumably, the Health Boards Executive (forerunner of the HSE?) didn’t just find the money they spent under a rock, and the Department of Health would have had some involvement or role in the process through which someone would say “and we need another €100million for that oul’ payroll system” and someone else would say ‘fair enough, I’ve taken it out of the national coffers and put it in this suitcase’. Or maybe their role in the project just amounted to providing a Minister of State to make polite noises about the whole thing, and publically thank everyone within earshot.

http://www.ppars.ie/Public/News/dohc%20press%20release.doc
O’Malley Launches PPARS Project to Develop Information Support Systems
13 October 2004
Mr Tim O’Malley TD, Minister of State at the Department of Health and Children, today launched the 2004 conference for PPARS. ….
PPARS is a project under the Health Boards Executive (HeBE) work programme led by a national project team, which is based in Sligo…..
The Minister of State acknowledged the efforts of all concerned who have brought PPARS forward including HEBE, the PPARS national office, The Department of Health and Children together with staff in local hospitals and health boards. He also commended the input and expertise of the external strategic partners in the programme, Deloitte, IBM and SAP.

Hobbes

This is personal opinion..

Large corporations rarely "charge as you go". If they inital tender was for the original amount then I'd say that is what was tendered.

SAP is notorious for costing a lot of money and requiring small armies to implement. I suspect they didn't factor this in and/or bought a system that was totally incapable of managing what they wanted.

Or it could be budget filling.
I worked in Dept of Education a long time ago. During that time they bought 486s (about 20 of them) for what a dumb terminal could of been used for. When asking about this they explained how the budget system works.

Basically each department is given X amount of money for the year. If they spend less then X then they get less the following year. If they spend the right amount or over the budget remains or increases. So there were cases where money was spent like crazy coming up on the end of a budget year in various departments. Although this was over 10 years ago, it may of changed since then.

Mailman

I don't think SAP is to blame here.
The stuff described above is fairly standard and would have needed practically no customising and what customising is needed would have already have been done for other countries health sectors already.

There is a SAP expertise deficit in Ireland so if they were developing it here in Ireland then I wouldn't have much confidence in the implementation.

Nice earner for IBM, they provide the hardware, the DB software and they manage the hardware.
I bet it is all IBM hardware and DB2 even though SAP can be deployed on anything and that is the main benefit of SAP - you can negotiate good contracts because you can switch platform and DB on a whim.

gandalf

Hmm i believe Deloitte were the major earners here with IBM getting the smaller amount probably for the hardware.

As for the cost of this system, you were quoted at €9 million and it costs €100 million (some reports have it at €150 million) when are we going to see some peoples careers ended over obscene waste like this. It looks like this happened on Martins watch in the Department of Health, he should be removed from a ministerial position now. The people who were supposed to be managing this process in the Health Boards/ Authority should also be fired.

The reason we keep seeing this is because no one is being held responsible for their actions, if other civil servants/Politicians/consultants see people losing their jobs over errors like this then things will change until that happens we will still be pissing tax payers monies away like its going out of fashion.

Sarsfield

Mailman wrote:

I don't think SAP is to blame here.
The stuff described above is fairly standard and would have needed practically no customising and what customising is needed would have already have been done for other countries health sectors already.

There is a SAP expertise deficit in Ireland so if they were developing it here in Ireland then I wouldn't have much confidence in the implementation.

Nice earner for IBM, they provide the hardware, the DB software and they manage the hardware.
I bet it is all IBM hardware and DB2 even though SAP can be deployed on anything and that is the main benefit of SAP - you can negotiate good contracts because you can switch platform and DB on a whim.

SAP always needs customising. I'm not aware of too many implementations that didn't require quite a bit. And I'm talking globally.

While there may be a shortage of SAP expertise in Ireland, the contract market is global. Hiring in expert staff from overseas is standard practice. There are a lot of good SAP implementations in Ireland (including global projects implemented from here).

I'd be surprised if it's IBM/DB2 platform though I've no knowledge either way.

But SAP needs to be handled carefully. It's very powerful, so done right it's superb. done wrong it's ppars. To err is human, to really screw it up you need an ERP system.

Mailman

Most of the items on the list don't need customizing.

I'd be astounded if IBM negotiated the contract and allowed them to specify Oracle instead of DB2.

FergByrne

In the light of the eur70m spent on 'consultancy' with IBM and Deloitte and Touche for the health service payroll, has anybody taken a look at the timesheets? Even charging eur500 an hour, how could you account for 140,000 man-hours consulting on a payroll system?

This story emerged a few months back, they had only blown 120m at that stage. Watch the numbers here: 120m for 36,000 employees is 3,333 per employee. Spread that over say 10 years and you're spending eur333 per employee per year to calculate their payroll. Paying someone eur50 an hour to do it in gold leaf embossed on vellum, they'd need to spend half an hour a month doing the employee's payroll for it to cost more by hand!

You could re-employ the 500 soon-to-be-ex seafarers from Irish Ferries, pay them all 24 grand a year to do the maths, and it'd still work out cheaper.

In a similar vein, IBM are still cranking up the man-days on the penalty points system.

And then there's the Garda system.

Sarsfield

Mailman wrote:

Most of the items on the list don't need customizing.

How can you possibly know? The devil is always in the detail. And that's where the customising is required.

I'd be astounded if IBM negotiated the contract and allowed them to specify Oracle instead of DB2.

Why? You think IBM would turn down a contract if they had to work with Oracle?

Hobbes

Sarsfield wrote:

Why? You think IBM would turn down a contract if they had to work with Oracle?

IBM are more likely to push thier own stuff as solutions, although it is not uncommon to use competitors products in some tenders.

dahamsta

jbkenn wrote:

Beggars belief, where do we get these gob$hites????

I would've though you voted for them jbkenn.

Mailman

I would expect that with the public sector's track record for negotiating contracts that anybody negotiating with them would chance their arm putting in as many favourable clauses as possible.

Sarsfield

I was only basing my comment on my own experience with IBM, SAP and Oracle.

Shouldn't most of this thread be in a computer type forum? Or does the politics of business contracts count here?

bonkey

If its any consolation, the Irish government isn't in any way unique in this. A large Peoplesoft project in Switzerland I've been involved in was just as disastrously ovebudget.

Personally, I'm mostly convinced that the problem ultimately stems from requiring non-business politically-oriented people to make business decissions, and generally not requiring these people to carry the resultant reprecussions one would in business.

Thomond Pk

From 9m to 150m or 17 times over budget already and another 4.5 times the original estimate to complete. If this was Sub-Saharan Africa the country in question wouldn't get another International grant for a decade.

This really is off the beam....

Harney has to go

mike65

But heres the good news...;)

Mike.

DublinWriter

Mailman wrote:

I bet it is all IBM hardware and DB2 even though SAP can be deployed on anything and that is the main benefit of SAP - you can negotiate good contracts because you can switch platform and DB on a whim.

Ehhhhh no. SAP has a lot of DB-specific scripts. Even though SAP supports several DBMS'es, switching DBMS'es on any production SAP R/3 system would be nightmarish.

IBM implement a lot of Oracle s/w, including Oracle applications as well as Oracle's database.

But....who exactly is the principal consultant here? I heard Bertie mention Deloitte & Touche in the Dail today, then I heard Harney mentioning a consultancy called 'Hay'.

But who's doing the actual implementing? Anyone out there with any inside knowledge?

Sounds like this project suffered from the classic Public Sector big IT-project issues:

1) Project Creep/Fuzzy project boundaries
2) Unclear lines of responsibility (11 Health Boards, anyone?)
3) Over-ambitious implementation expectations

SAP R/3 is a complex system. It's run successfully in 1000's of companies worldwide. But if implemented badly it can be a total disaster. US Drug-distrubutor FoxMeyer went Chapter 11 in the US because of a failed SAP R/3 implementation. In Denmark, both Lego and Bang & Olfson nearly went under from bodged implementations of SAP R/3.

However, €150m is chicken-feed compared to the estimated 1bn Sterling lost in failed Government IT projects in the UK in the last ten years.

DublinWriter

FergByrne wrote:

Even charging eur500 an hour, how could you account for 140,000 man-hours consulting on a payroll system?

Have you factored in software license costs, hardware costs, backup facilities etc into your calculation?

FergByrne wrote:

And then there's the Garda system.

Which is working quite nicely now by all accounts. PULSE's problem was initial performance issues and a failure at management level of all parties concerned to stop the GRA scaremongering the media in their attempt to get more money for Guards for just using the system.

DublinWriter

bonkey wrote:

If its any consolation, the Irish government isn't in any way unique in this. A large Peoplesoft project in Switzerland I've been involved in was just as disastrously ovebudget.

In the light of the Health Service fiasco, no one has seemed to have noticed the recent bashing by the Comptroller General of the Prisons' Service for spending €1.7m on a 'inapropriate' PeopleSoft HRMS system.

Mailman

Can I just point out that I work with SAP product for a living.

Providing the system has been properly rolled out, our datacentre can take a system down and in 5 minutes have it up and running on a different DB, OS, kernel type and CPU.

Don't overstate the complexity of the R/3 system. The money was spirited away elsewhere. If nothing else SAP couldn't have been taking much money as software companies can only really extract licence fees from systems that are live with loads of modules up and running. This is a still-born project.

uncivilservant

Hobbes wrote:

Or it could be budget filling.
I worked in Dept of Education a long time ago. During that time they bought 486s (about 20 of them) for what a dumb terminal could of been used for. When asking about this they explained how the budget system works.

Basically each department is given X amount of money for the year. If they spend less then X then they get less the following year. If they spend the right amount or over the budget remains or increases. So there were cases where money was spent like crazy coming up on the end of a budget year in various departments. Although this was over 10 years ago, it may of changed since then.

It hasn't.