Talent2 faces financial penalties if Novopay not fixed by Wednesday – Key

John Key: giving the Conservative Party room to carve a niche

Novopay's maker faces financial penalties if problems with teachers pay are not fixed by Wednesday, Prime Minister John Key says (teachers' pay day is Tuesday).

The PM’s pressure comes after a new problem with the system emerged over the weekend. It was discovered a school could see the pay, and edit details, of a teacher who worked for another school.

The government paid Australian company Talent2 (formerly Morgan & Banks) $30 million to develop Novopay. Since the new online system was introduced three months ago, thousands of teachers have been incorrectly paid or not paid.

Mr Key said he could not comment on the specifics of Talent2’s commercial contract, but financial penalties would be likely, among other measures, if the mid-week deadline was not met.

Yesterday, the NZEI – a union representing 50,0000 teachers – demanded a full public inquiry into what it calls "the Novopay debacle".

This morning, the prime minister brushed aside the call. He said the blame for Novopay problems lay with Talent2, not the government. Pressure was being put on Talent2 to fix the errors.

"The issue isn't with the associate minister in this case. Craig Foss is doing a good job," Mr Key told TVNZ's Breakfast programme. (Associate Education Minister Mr Foss has taken over responsibility for Novopay from Education Minister Hekia Parata.)

"The issue is with the provider."

The prime minister said there were 60,000 teachers and their payroll system was complex, with three layers of rates teachers could be paid at.

But mistakes were not good enough, Mr Key said.

"Talent 2 worked on that for a long time. It's a big project. The government's paid them a lot of money and they should have got that all right.

"A lot has been fixed up, but not enough. So to those teachers who haven't been paid and are owed back-pay, that is unacceptable because people rely on their pay to pay their bills."

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45 Comments & Questions

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Why are we paying to have a new system developed when there are plenty of good payroll bureau's based in New Zealand that could easily have handled the eduction departments needs like a number of New Zealand corporates. Surely the "All of Government" system should be working to have one payroll provider for "All of Government" ??

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We deal with a number of payroll providers on behalf of clients in our Chartered Accountancy business. It is common knowledge that 100% accuracy is the service standard in the payroll software business as it is the fastest way to lose a client if you can't perform! (the trickle down effect you are seeing here)
Talent2 should absolutely be on the block for this matter! I am sure there are some fantastic NZ companies who could step into the breach.

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$30 mill for a payroll system, what did those people use the same advisers who advised Auckland City on there computer elephent!
Gee I guess we really just do have far to much easy money dont we...

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what is it about changes and strategic thinking that we cant seem to get right.Its the oldest trick in the book to overpromise and under deliver and then cope because once you are in you are in.Why they didnt do the system from the ground up instead of the sky down and spend some time with schools at the start we will never know.Surely it couldnt be arrogance.

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Talent 2 - I've used them in another large NZ organization and they were nothing but trouble / really don't understand NZ legislation - can imagine they would have been in the guinea pig phase when dealing with MOE.

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Are you a prat? I suggest that perhaps MOE come out to play as well. The previous provider was a bloody shambles. Also this Novopay system bears little to no resemblance to the T2 product used by other Major organizations, it is distinctly MOE designated. Perhaps we could hear about the number of education staff who are now being paid the correct rate and not the exorbitant dollars paid in error for so long it became accepted as the actual salary paid and the new system picked up the correct values. There is more to this than what is being published, perhaps T2 are being diplomatic in not replying.

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Yeah nah T2 got a good deal here.30 million and yet can't get. Muppets T2.

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Yeah nah T2 gotta go.major shambles

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$30 million to employ Australians to build a bug ridden system for NZ.

No wonder unemployment is shooting up.... when will the government begin supporting NZ Made??

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Probably another case of "you scratch my back and I will scratch yours" buddy system of giving business to some one they know - someone in government here knows the top guy at Talent2 and they strike a deal !

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My wife works in a primary school office and they are at wits end with it. She's looking for another job as the extra hours and grief she gets from staff builds up. Left on hold by helpline with phone on speaker listening to elevator music. Its a joke.

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Feel your pain Anon, my partner hasn't been paid for 6 weeks now leaving us on one income with no respite or support. What really gets to me is how utterly weak the union have been in their handling of this on behalf of the teachers.

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People need to start looking into the Education Dept and not at the provider! Problems like this are generally not software specific and instead often relate to bad practices/policies.

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We haven't had such an obvious and public display of failure since INCIS in the 90's.

There are plenty of methods to produce quality software in existance, and most likely just like most failures the TESTING Phase has probably been largely been underestimated and the matching of test tranasctions to real scenarios poorly understood from the design phase.

In other words, a mediocre job, overcharges , now on a spiral of dissatisfaction to ovlivion as all confidence has been lost, even if the system has nearly been corrected, a text book failure scenario,form a Management perspective.

Replace the mamagement ( as in assume ownership ) but keep the system is probably where its heading....

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>"We haven't had such an obvious and public display of failure since INCIS in the 90's."

To be fair, we're still waiting for the new Auckland Council and IRS system projects to begin.

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So what's that, $600/ teacher to set it up?

I guess it is not really unbelievable, it's what governments do. A whole raft of expensive tendering processes, output requirements and boxes to tick. Adapting the way they run things to use proven and and cost-efficient off the shelf or off the cloud solutions is just way too hard.

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This is just a disgrace! Payroll has to be one of the the most well understood areas of IT. How could this possibly have been a $30M project, and so difficult. I know a few IT companies that have built considerably more complex systems for considerably less than $30m, and they actually work....

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I think actually payroll is one of the most complex areas for IT to deliver. Having worked on a few of these systems in the last few years, and teachers payroll is far more complex than "normal" payrolls. This isn't saying Talent2 are not to blame - just that they weren't capable enough.

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Latest Tui ad:

The National party government really care about New Zealand jobs and building up NZ development companies.

yeah right!

30Million to an Australian company and probably pay them a monthly management and and upgrade license fees, glad to see our Government cares about NZ jobs. From this Governments track record I hoped they asked Warner Bros for permission first, this governments corruption is truly astounding.

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How do you know the peole working on the project are in Australia? Talent 2 has significant operations in NZ.

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Regardless of where their people are, you can be sure the profit is not staying in NZ. At 20%, that's $6M of NZ taxpayers' money gifted by NZ government to Australian interests. And if this costs NZ taxpayers less than $90 at the end of this debacle, I'd say we got out of it lightly.

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Talent2 is not an Australian business - it is an Asia Pacific business employing thousands of people in the region and supporting thousands of clients. ANd they do alot more than just payroll. The people on this project are most likely NZlander's who pay local tax and spend in NZ. People are crazy to think a bunch of Aussies came over and then took the money and ran away. Narrow minded thinking.

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They are 100% Australian owned according to Companies Register. Four Aussie directors in Syd and Melb. No kiwi investors so no profit retained in NZ. I'm pleased if tax and income spend is happening in NZ as a result of the project, but I'm not happy that a) work has been sent offshore, b) profit has been sent off shore, c) this project is off the rails and costing the taxpayer big time, and d) people are not being paid. Open your own mind up when thinking about this.

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As this contract was awarded before National was elected in 2008 maybe you should open you eyes and not play partisan politics!

Or is just easy to make off the cuff remarks that are not actually based on fact?

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Um... The incredibly poor decision to go with Novopay was made by the Labour Govt (signed off by Chris Carter) in 2008 (probably when they knew that the election was list and a National Govt would have to deal with the consequences...)

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One of my first jobs was a pay clerk for 150 people back in the days before computers all calculated on a Burroughs. My boss told me that my job was one of the most important in the company. He said that it is an employers prime responsibility to pay the right wages and on time. Sadly in the new modern world these principles dont apply. I have watched with amazement as the guilty parties have all blamed each other none willing to take responsibility. The supplier the Ministry idiots are morons of the first order. My question to the PM is this. If the MoE cant get the simple task of paying people right what else have they stuffed up that you are not yet aware of. Because there will be plenty of hidden stuff ups you can bet.

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Education payroll is the most complex government application one can imagine in all of government administration. Most people think it is a breeze. I believe that until the individuals in government who selected this tender be called to account for this debacle - as I am sure that Talent2, M&B did not have the extensive and long held track record of successful large govt payroll systems for education to justify the selection. I think you will see that the job went to the lowest bidder and when the final total is added up, one will see that they are in fact the high cost solution after all. Fire the selectors.

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Your assumption is incorrect. Talent2 are leading providers of payroll systems to our major education providers being the Universities and have been operating in these environments for more than a decade or two. Another point that people are missing is this, Talent 2 users are well aware that the MoE placed significant demands on the T2 group, last minute alterations, personalization of user interface that took the product to way beyond its original concept. Dysfunctional chatter within the MoE project team itself doubtful had any positive influence on the project. As stated to another commentator who presumes what is written is gospel, Talent2's silence is deafening and no doubt more about sound ethics in avoiding the blame game.
Perhaps John Key would be well advised to sit down with the Senior Management team of Talent2 and have a listen.

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>"Talent 2 users are well aware that the MoE placed significant demands on the T2 group, last minute alterations, personalization of user interface that took the product to way beyond its original concept."

Some fairly fundamental and well-known no-nos, really.

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All of the challenges you list are normal implementation risks encountered by IT integrators who specialise in government application development and implementation. Unless the selected contractor is experienced in planning for these occurances and putting in place the management approaches to deal with these, they will fail. That is why a long standing track record of large governement systems implementations is critical in the selection process - and it is experience that has to be gained by prior demonstration of successfully doing it. As a IT application integrator for over 30 years in Australia, NZ, and US governments at all levels , I can confirm that T2/M&B is not ever encountered amongst the group of IT providers who can claim prior success - so if you believe other wise, I suggest you list those prior projects here. AS again, fire the selectors and you will get some comfort that those who created this mess will not screw up anything else in their career and ensure that future tender assessments contain a bit of career risk for themselves and not just the selected providers.

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Key tries to distance himself – how pathetic. “Financial penalties would be LIKELY” you mean there have not already been definitive financial penalties?!? Is it any wonder no one has any confidence in the credibility of this government. If more time was spent dealing with the bread and butter issues of governing the country and less time having cups of teas, forgetting who was illegally snooped upon, and running off to Hollywood, then something might actually get done.

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Talent 2 need to be held to account but it's time the bureaucrats who made the appointment were held to account. The Minister and PM should expect better from these inept public servants. Wtf - other govt departments with equally complex payroll haven't had these problems why on earth did someone decide to approve $30m on this - time for heads to roll?

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Novapay have been doing a system for the Australia government for 4 years now and it is still not correct. The payroll system for NZ MoE was started 4 years ago, why does it not work because there was no real data real time testing

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There is no Novapay system in Australia. It is a specific system just for MOE so get your facts correct. I believe MOE had at least 3 systems running before and lots of issues in people being overpaid. The Australian Govt uses many different vendors/systems at Federal, State and Local council levels.

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While not for a moment excusing the problems I think it needs to be pointed out that this payroll is not just a single employer with a large coprpoarate payroll office or three - every school is the payroll office for it's teachers (1000's of schools) and many teachers work in multiple schools simultaneously etc. Not 'off the shelf payroll system'.

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$30 million, ahem, now that figure is for what? Did that sum incorporate the MoE project team costs, it didn't? so that means the concept cost a lot more yes?
The previous payroll system introduction generated the same hysterical cries of foul, heads must roll, strikes will take place, Datacom should be hung drawn and quartered, Yet, it all quietly faded into the sunset or did it....?
We have become a Nation that propels forward on the sniff of a story without seeing the two sides of the coin and then conveniently withdraw when the facts emerge and all the ranting and raving is shown to be an embarrassment.
For those calling out why a NZ company wasn't chosen, well it was a NZ Company that botched it previously and then stumbled its way through to the point where it was replaced.
Let's us questions, How often did MoE change the spec's during the initial phase and testing through to go live?
How solid was the data from Datacom to Talent2 and how many errors were tracked by T2 as a result of their system doing what it is supposed to. How much input did the MoE project team have and were they experienced enough to be in the mix?
How many Principals were against the project before conception and refused during the testing and trial phase to co-operate?
What were the original spec's for the system, how far outside of the original specifications did this system have to evolve and why?
Let's see some reasoned and factual commentary around this issue, not emotive clap trap about loss of National Pride by selling to the Aussies, or some other Political poison pen tripe. Last but not least, why did the MoE keep pushing out the go live date when T2 were originally set to go with Novopay many many months ago.
At what point did the MoE projects team run a side by side test program to evaluate the difference in the then existing system and the proposed replacement and for how long.

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We actually don't care who is responsible any more, somebody please step up and take ownership of this problem - stop playing the blame game and get it sorted. It is unacceptable that after all this time there are not only the errors from the first two pay cycles that are still not fixed, but ongoing errors - ridiculous errors - that are happening each pay cycle. It can't be the fact that teachers' salaries are so ‘complicated’ as the errors are in support staff pay as well, very basic. This mess affects all Principals, Teachers, Admin & Support Staff - everyone working at a school – it is always reported that ‘teachers’ are the ones complaining, it affects us all. The whole system is not user-friendly - just take a look at the website. I too am so fed up I am seriously looking for another job - no one should be expected to have to work with this level of incompetence. The fact it took so long for the Ministry to take this seriously has no doubt made matters worse. If they had listened to us in the first place instead of just saying there were teething issues, we probably wouldn't be in such a big mess. The bottom line is people deserve to be paid correctly and on time for the work they have done – no excuses and that also includes all of the extra work we administrators have had dumped on us. Please please somebody - just sort it out!

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Great, so now with more unemployment in NZ, it seems the most hopeless and self serving Government NZ has ever had has outsourced this 30 million dollar project to a useless Australian company.
How about NZ government spending on the NZ workforce and not on an Australian company who is probably using NZ labour on this project.
Resign John Key

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...actually wasn't the contract awarded under a Labour govt?

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Can NBR please confirm that this contract was awarded under the last Labour Government?????

[Education Minister Heklia Parata said in the House in answer to a question on September 20, 2012, that “it was the Hon Chris Carter who approved the contract with Talent2 to develop Novapay in 2008”.
The source is parliamenttoday.co.nz, as reported at 5.04pm on the same date. – Editor]

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How much did the Queensland health payroll implementation cost?

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Over $200 million to implement and then they have spent $200 million to try to fix it with projects to reach $1.5 billion for the 5years. They only have 70,000 employees. So $30 million is a bargain!!!!

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What a shambles. How many ministers both elected & list have been involved? Did any one on the board or on the advisory cpmmittee have any knowledge of the hve the slighest idea of what was being asked of the tenderer?
NZ 3rd class economically, masquarading as 1st.
So we had Carter, & then Parata,Foss & now Key involved. The mind boggles.

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Reminds me of the Queensland govt health payroll problem, since 2010 when it came into force it's cost the state govt about half a billion dollars to fix and it's still broken. They cannot scrap it as
They have no replacement, sound familiar?
The extra cost is causing several thousand job losses to pay for it, so guess we Will be getting it here soon.

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Having worked on many IT projects, I suspect the problems in Novapay run very deep. Imagine a 10 story building with dodgy foundations. There may be no quick fix here. As far as staff locations, my guess is they have kiwis gathering requirements and Indian/Asian developers writing the software on the cheap. This is not a good model!!!

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