Govt reactivates pre-Novopay pay provider as problems persist

The government is reactivating its relationship with Datacom, the New Zealand firm that managed teacher payrolls before they were switched to the glitch-plagued Novopay system last year.

The senior minister made responsible for handling the Novopay debacle, Steven Joyce, announced a series of steps today, including "investigating a revised contingency plan led by the acting Secretary of Education, who has commenced dialogue with previous supplier, Datacom".

Datacom, a quiet giant of the New Zealand information technology sector, handled the education pay system from 1996 until August last year, when Australian firm Talent2 implemented Novopay as a replacement after a process that took the best part of a decade from the time of initial reviews in 2002.

Mr Joyce also announced terms of reference for a ministerial inquiry, with the intention that the results of a technical review be "fed into the inquiry, and for the inquiry to cover all aspects of the teacher payroll system from outset to present day".

The review will inevitably cover six years in which the payroll system changeover was under the control of the previous Labour-led government.

Mr Joyce warned there would be ongoing problems with Novopay in next week's teacher pay round, the first since schools have returned this year. It was especially likely to have trouble dealing with the details of new collective agreement for secondary school teachers.

"I have made it clear to all parties that the on-going issues with Novopay are unacceptable and new measures are being put in place to provide timely solutions.

"Novopay is one of the largest payroll systems in Australasia, covering approximately 110,000 people and 15 separate collective agreements. After meeting with the key parties involved over the past week, it is clear the issues it has are complex, that there is no quick fix and problems will continue for some time," he says.

Mr Joyce announced a technical audit of the Novopay system's stability would be undertaken, and that a senior accountant, Murray Jack of Deloitte, will lead a technical review to include results of an audit currently being carried out by another accounting firm, Ernst & Young, along with an accelerated audit of a sample of schools.

A new Novopay remediation plan will also be implemented, led by the Novopay management board, and the government will provide additional resources "on a contingency basis while reserving its contractual position with Talent2".


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This has INCIS (Integrated National Crime Information System) written all over it ... short memories, those government departments.


Nice of Datacom to oblige after being dumped for (I assume) a cheaper overseas provider last year.

At least we know the Kiwi-owned solution works.


Datacom has a long history of mis-delivery of projects. Government ones, in particular. So I'd be careful about crowing to much this is not an easy area for them. The fact is the unions and teachers have massively over-complicated pay structures and with so many allowances and rules and levels, etc. The old system had just as many issues and was considered a dog. Google it and you will find articles on it. Which is why it was put out for replacement. Shame talent2 was just as inept.


It's quite likely the Datacom system was end-of-life, so a replacement was necessary. Hence, reactivating it may not be that simple... if they begin to recommend an upgrade of it to latest technology, this could be Novopay 2.0


Whatever you do, please do not use Parata's dog shampoo to get rid of the fleas.


The Novapay issue is a big problem. I'm sure there was a very serious and detailed RFP. Equally, Novapay "ticked all the boxes". Unfortunately, the task was more complicaed than Novapay thought and they hadn't understood the nuances of the NZ market. It will be hard for Steven Joyce to find a solution in the short term. Maybe Datacom should given the task of supervising Novapay! A more knowledgable supplier using a low-cost Australian provider to execute the detail correctly. Puts a smile on my face.
Regardless, it won't be fixed quickly, which is a very personal problem for a number of teachers and schools.


Don't worry, the billion dollar IRD replacement system will not have any problems like this...


Is education really the most complex sector for pay?


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