$91 million for 'new visa processing technology'

Buried in an otherwise excellent report on NZ Tourism (found through this NZHerald article) is the statement:

“Immigration NZ is investing $91 million in new visa processing technology that will enable visitors to apply for their visas online”

That feels ridiculously expensive but, overall, this is very important to NewZealand and we need to make sure it works.

1: It’s expensive

The mind boggles. $91 million is an extraordinary amount of money to spend on any computer system. How unreasonable is $91 million?

• $91 million is 758,333 hours or 431 person-years of work at an average all-in cost $120 per hour.
• While $120 per hour is relatively cheap for contracting, at 8 hours a day and 220 days a year this equates to an income of $211,200 per year per person.
• Perhaps there is a lot of hardware in this budget but $91 million will deliver up to 30,333 pieces of hardware at $3000 each.
• Maybe there are new operating costs involved (although the business case pointed to savings.) In this case taking $21 million from the budget would bestow $2.1 million a year for 10 years, which is 10 of those expensive $211,200 people per year, or, more reasonably, over 40 people averaging $50,000 per year.

2: It’s well under way

Implementation of Immigration ONLINE (also known as the Immigration Global Management System, or IGMS) started in February 2012 following the cabinet’s approval of the business case in November 2011. The project is on track to complete the majority of functionality by the end of 2015, including online visa applications and processing, the use of electronic documents, automation of simple tasks, access to the system by approved third parties and significant improvements in identity management. Remaining functionality that is not central to a quicker and easier user experience, relating to, for example, retiring legacy systems, will be completed by the end of 2016.

It’s all being being done by Datacom – which as it is a local company means that the money is cycled back into the economy, and diminishes the net cost to New Zealand considerably. One could even argue that there is a multiplier effect which creates a net gain for New Zealand, as not only are Datacom staff spending money in NZ, but the tax (GST, PAYE and income tax) goes back to the government, the owners of Datacom are the government-owned Super Fund and a local family who plough (very smartly) money back into New Zealand through investments.

3: However, it’s worth it.

The project, even at the ridiculous price, is easy to justify if it increases migration and tourism. One presentation I found from Immigration NZ, for example, states that migrants add $1.9 billion to GDP each year. I don’t doubt that, and they also point out that education alone brings $2 billion of export earnings. So getting this right is really important, and the sooner the better.

How is it going? Another presentation, from April 2013, stated that end to end student processing was targeted for first half of 2014. Today it’s still ‘please complete the form“ and prospective students have a very long PDF to print out, and must supply a vast amount of physical evidence like photos, medical and police certificates, their passport and evidence of their ability to pay tuition fees and that they have a place at an educational institution. It’s a nightmare, so simplifying it is well overdue.

In January this year FutureGov reported that the project was on track. Let’s hope so,

Overall: Let’s make sure of this one

The concern with large projects like this is not just the cost, $90.5 million in this case but that the complexity makes them much harder to deliver a usable system that actually makes things easier. Nobody wants another Novopay, and I am sure that the conversations in the corridors of Immigration NZ, government and Datacom are held with that in mind.

This is arguably more important to New Zealand than Novopay (though I would be wise not to argue that one to one with an unpaid teacher.) Even during the worst Novopay periods teachers were still coming to work each day, and good for them. This Immigration system will, amongst other things, help or hinder students from paying  (generally tertiary) teachers at all. It’s also a critical piece of the tourism and immigration puzzle, both important drivers of our economy and society.

So I hope the government, Datacom and immigration stakeholders are well on top of this, and the project continues, on track and without fuss largely underneath the radar.

Lance Wiggs is an independent consultant providing management, strategy, growth and valuation consulting to industrial, media and internet based businesses. He blogs at Lancewiggs.com