Auckland Council’s $1.2 billion IT shambles

OPINION

Victoria Crone

Victoria Crone

Victoria Crone on Auckland Council's IT blow out

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See also: Auckland Council IT blowout: but Victoria, how would you fix it?

Reports have filtered through about the $1.2 billion blowout by Auckland Council on IT since the supercity was formed in 2010.

This level of overspend is phenomenal and it is unclear whether the council has anything to show for it.

What is clear is the council has failed in its governance responsibilities to Aucklanders and ratepayers.

Last year, the auditor-general raised some serious concerns around the project – NewCore – which has received attention for its $100m overspend, saying the project carries “an almost certain” risk with a “major impact”.  

At the time the council responded by saying all was under control citing the following reasons: “this includes quarterly reporting to the finance and performance committee, project steering group meetings held each fortnight in line with best business practice, and independent ongoing quality assurance reporting from EY to identify issues.”

So I took a look at the reporting mentioned, and while shocked, wasn’t surprised at what I found.

A review of the finance and performance committee meeting agendas and minutes show just how badly our leaders have failed us in governance.

In 2015, the same information on the IT transformation programme was regurgitated four times when updating this committee (in FebruaryMaySeptember and December). A quick review of the minutes of each of those meetings shows no overview of any discussions, except in September when the public were excluded for reasons of commercial confidentiality.

There is no mention of how investment is turning up in actual operational savings, except broad statements around targeting savings. Any type of rigorous risk reporting framework is completely absent.

Additionally, I find it astounding there was no mention of the vast gaps in governance highlighted by the auditor-general in 2015. This is a complete failure not just by council staff accountable but the governors of Auckland.

Having worked in the IT and communications sector in senior management and governance positions during my 20-years in business, I have never seen such gross negligence at all levels of project management and people must be held accountable for this, including the cost blowout and lack of governance oversight.

For $1.2 billion, you would not only have transformed your IT systems and processes, migrated your whole staff to modern-day computing solutions, such as cloud-based communications, and have built new network infrastructure, such as a mobile network. The fact the council is attempting to combine systems is an inaccurate justification for this level of investment.

We need strong leadership focused on delivering results for Auckland. There’s quite a few steps that need to be taken in order to address this level of incompetence.

Here is where I would start:

  • Demand the appropriate level of reporting from those accountable in the council to governance. This includes updates on benefits realised, milestones and gating which decides whether the project is moved to the next phase, rigorous risk assessment and monitoring, and a thorough update on scope changes driving costs and benefits, as a start;  

  • If governance reporting is not addressed satisfactorily in a short time frame (i.e. 3-6 months), then replace those individuals to get the level of accountability that is a fundamental tenet of large capital investments like this;

  • Ensure the risks highlighted by the auditor-general are taken onboard by council staff accountable for this programme and risk mitigation strategies are embedded not just in the programme but governance reporting;  

  • Ensure the benefits, outcomes, project scope, business and technical requirements were aligned and reported on regularly at both an operational and governance level;

  • Not take at face value that management is doing this. It’s clear from the significant gaps in what the council says it is doing and what is turning up at the committee meetings that the most prudent assessment would be to assume the appropriate levels of reporting and risk management are just not in place; and

  • Ensure management is running an incredibly strict capital prioritisation process around scope changes required.

This blowout is completely unjustifiable, especially when residents in Riverhead and Maraetai can’t even afford decent footpaths in their communities.

The irony of reading the committee meetings is the talk about deferring millions of dollars of desperately needed investment that has been put on hold while the IT funding goes unmonitored and ungoverned.  

I will provide strong leadership, fresh ideas, and deliver real results for Aucklanders. I have the governance and operational experience to ensure Auckland has the right level of reporting and questions in place to avoid debacles likes this.

Victoria Crone is a candidate for the Auckland mayoralty race


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The council and city management has shown a complete contempt for the people they serve, and seem to think they can continue to hide their incompetence behind closed doors.
To get my vote Victoria, you would need to make a strong statement about who you want out of the council and management so you have a realistic chance of achieving change.

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I hate to be a Debbie-downer, but I honestly don't see much here that will have a significant effect.

1. More project reporting
2. If things don't improve, install new project managers
3. Risk mitigation strategies
4. Yet more reporting
5. Scope creep management (this might actually help, if it's truly allowed to occur...but chances are it's already in place)

These are all things that will have been talked about before, efforts made etc.

At the end of the day you have massive projects trying to pull too many things together at once, expensive platforms (e.g. SAP) and even more expensive consulting companies (the likes of Deloitte), and council units full of "this is how we've always done it and it WILL NOT be changing" people. A lip-smacking ever-enlarging project for consulting companies if ever there was one.

A bit more huff and puff from the top is not going to change the fundamentals involved significantly.

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Debbie-downer, sounds like you have some first hand knowledge... As an "insider", I have to agree with pretty much everything you say...

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Ms Crone is boring. No ideas on what to do and has not figured out how to communicate to voters. These are not the same as cutomers.

I don't want a marketing and IT executive to head the Council. I want a mayor - who can do local politics and get results. The two are not neceearily mututally exclusive, but they appear to be in the case of Ms Crone.

If Crone is elected mayor, I expect Dick Hubbard v2. Will be every bit as painful as DIck Hubabrd, v1.

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Organisational Management and Development - it isn't fluffy or exciting, but it is required urgently. This beast has too many heads (including the CCO's) all fighting for control. A razor gang needs to be let loose. Instigate an immediate freeze on hiring and a five year freeze on all wage/salary increases. Do not replace roles as people leave. Re-engineer services that have the customer (i.e ratepayer) as the focus. Make the executive accountable - if they have can't deliver, get rid of them.

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What we need is a Donald Trump standing for Mayor. A person who will look the Town Clerk and his cronies in the eye and say "Your Fired". Because that's what it needs. Aucklands governance AND management is a shambles and Agean Stables that needs hosing out and standing again. The fish rots from the head and so has this Council and its management. The tone is set at the top and it has been by the Mayor and the Town Clerk.

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How much did Victoria pay for this piece?

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Maybe get Penny Bright to go over this mess, she will sniff out in-competencies and miss appropriation a mile away, its not so much what has happened with project NewCore but who allowed this to happen and go on for so long

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Great, ask candidates what they would do to solve yet another council disaster which may have been averted if the media had asked the questions about what was going on. "Victoria, see that horse that just bolted past, how would you fix this fence thats been broken for ages?"

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This is absolute disgrace. Find me one rate payer who wanted the Council to proceed with a massive IT project and I will call them a liar. The bigger issue isn't that the project management was an unmitigated disaster (par for the course) it's that this Council is run by clowns with a completely distorted view of what the City needs.

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...according to Victoria Crone what the city (Council) needs is cloud-based communications and a mobile network.

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Firstly, they are 3 years into a 10 year amalgamation project and would have taken a good year or more to analyze and plan for the changes needed across all projects and departments. As I see it most of the hard assets such as engineering, transport and clerical admin are working fine, but IT is an issue as usual.
With some inkling of what is happening across the IT sector, there is a lack of incisive vision and firm leadership across the IT management. Use of cloud solutions would be extremely beneficial for Some IT needs, but not all, and SAP has done an expensive snow job on the old hands in place without looking at enhancements to competent legacy systems among the multitude of inherited solutions already present.
Ms Crone or any new mayor would have their work cut out just dampening internal groups wish lists, together with some of the contrary systems that were inherited from some of the old councils.

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I don't dispute the need for an efficient and streamlined IT infrastructure but cost-effective solutions should be a prerequisite and this project was never a priority for the ratepayers of Auckland. At a time when we are constantly told how bare the cupboards are this is a shocking mismanagement of funds.

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I hear you can now register a dog online?

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Good start Victoria but how much" Contractor paid entertainment" did it take for the Council staff to get "to know" the IT Contractor ..... and Council Officers to make their recommendations ?

Bottom line is Auckland Council is not the first Local Authority in the world to have Computerised Local Authority systems. Auckland with 1.4 m people is not even a decent sized city in world terms. Why not take advantage from other Local Authority knowledge, who have been through this process ?

Contracts - It is essential to start with correct Contract Documentation and the Contracts should be performance based. No performance - no payment. Contractors are best placed to manage risk and the IT Contracts should reflect this

All the above shows is Council Staff are not exposed and experienced in the Commercial World and they should not be negotiating Commercial Contracts in excess of $5m. If they do, all Contracts should be Peer Reviewed by experts before the Councils get sucked in by Consultant Contractors to an endless tunnel that never produces results.

The IRD, Health and Police Computer systems are also prime reasons why people without expertise in the area should not be negotiating IT Contracts.

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Out of all the challenges facing Auckland, is this what Victoria considers urgent? Really? Seriously?
Not the welfare of the marginal, housing crisis and slowly rising racial divide between the have and have nots?

If Aucklanders want a compliance and governance manager, we know who to call.
I believe Aucklanders want leaders who will take them to a new place. Not try to put a barn door when the barn is already burnt!

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Agree completely but I would immediately replace this committee....all need to go. I wonder where the mayor is on this. He and the CEO would have been aware of this. Governance under this administration is a joke. Time to cut this useful bunch and get an open administer in office.

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Sounds to me Victoria is putting forward reasons why she is qualified to be Council CEO. However we're looking for a Mayor!
That takes leadership and vision, and I don't see it here.

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Auckland ratepayers are suckers.

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Why must we ratepayers pay for council extravagance and incompetence? If the $1.2billion cost is included in our rates bills how much must each household pay? Does this resemble the earlier North Auckland councils overspend on a glorified sewage system foisted onto their ratepayers? Should we rebel and deduct the zit overspend for what outcome from our rates?

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I think Ms crone is insightful, lucid,direct. Having experience of 40 years in business i understand with great clarity what she is stating in clear concise language. Ms crones background is eminently suitable for our city,s most important role.

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Just wait until the rail tunnel starts!

Right now it is $1.4 billion over the original 2.4 billion budget because they "forgot" to include things like replacing level crossings.

How much more to come? One study said that the average cost overrun on such projects was 45% and they got half the predicted passengers. I doubt if Len's dream will do as well as that!

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