A $70.4million, three-year, systems integration contract at Transport for NSW (TfNSW) heralds Deloitte’s return to the government ICT market as a serious contender, being by far the largest contract of any sort that it has signed with NSW government in recent years or indeed with any other jurisdiction.
In addition to the Deloitte contract, TfNSW has awarded two other major contracts related to the cluster-wide overhaul of its Enterprise Resource Planning (ERP) systems.
A $13.2 million contract has been signed with Ernst and Young for business transformation and change management services and BackOffice Associates has been awarded a three year in a $12.8 million contract to migrate data from the array of existing systems into the consolidated ERP platform.
BackOffice Associates, headquartered in Massachusetts and with an office in North Sydney, specialises in data migration solutions. In December 2013, it acquired ENTOTA, a specialist SAP Data Services consultancy.
Prior to the award to Deloitte and Ernst and Young, Fujitsu had been the only major multi-national supplier incumbent at TfNSW. Prior to the creation of the TfNSW cluster , RailCorp and the then Roads and Traffic Authority (RTA) had major contracts with Fujitsu to provide desktop support, service desk, server management and data centre operations, which are understood to in effect have been extended to the present time. Fujitsu commenced its contract with RailCorp in 2006 and with the RTA in 1997.
The services required under these contracts are now being market tested as part of TfNSW’s Next Generation Infrastructure Services procurement. TfNSW is evaluating responses from a restricted Request for Tender process, following an initial stage EOI. The restricted tender is understood to have been issued to a total of seven of the original 25 EOI respondents. Deloitte did not respond to the EOI. Industry rumour suggests that the evaluation of the Centralised Computing Tower has now proceeded to final negotiations with two bidders.
“The NSW Government ICT market has been reformed profoundly since the election of the O’Farrell Government. With the pronounced shift in engagement with industry, and the changes to its procurement frameworks, many of the major IT Services firms are looking at NSW with renewed focus, creating a much more competitive landscape than existed under the previous Labor Government”, said Intermedium’s Principal Analyst, Judy Hurditch.
Deloitte’s ERP contract is its largest in NSW for some years. Its next largest is a $5.2 million contract to assist with the overhaul of NSW Police’s computerised operational policing system (COPS). Deloitte will develop the specifications for three stages of build work which will then be put to tender. Deloitte’s other NSW contracts have been for consultancy, management and audit services.
In the Federal sphere, Deloitte is yet to have the same impact. According to Intermedium’s AnalyseIT, Deloitte’s total contract value since 2008-09 is $32.5 million. As with NSW, this consists of mostly consultancy services.
The Transport ERP project commenced in 2012 as a result of the NSW Government’s Commission of Audit which found TfNSW’s had 130 separate systems for business processes and reporting. The Commission’s Report suggested that “the number of systems can be consolidated to between 12 and 24 which will result in both clarity and an estimated recurrent cost saving of over $100 million per year.”
$151.3 million was allocated to TfNSW in the 2012-13 State Budget for Business Systems Improvement which includes consolidating the ERP systems of its several agencies into a common integrated solution.
The Deloitte, Ernst and Young and Back Office Associates contracts absorb $96.4 million of the overall funding for the program. In addition to this is a $5 million deal signed in 2012 with PriceWaterhouseCoopers to provide revised cost-estimates and a blueprint in preparation for TfNSW’s July 2013 Approach to Market.
The NSW Department of Trade and Investment, Regional Infrastructure and Services (DTIRIS) is now in its second stage of consolidating ERP systems from its 16 agencies into one SAP cloud platform. NSW Government has already acknowledged the $14.5 million project as a success. The consolidated payroll system has been rolled out to all agencies within the cluster, and serves 8,500 people. This makes the DITIRIS project much smaller in scope than the TfNSW one, with the DITIRIS cluster just 15 per cent of the size of the NSW transport cluster.
On the horizon is the Justice Cluster’s ERP consolidation program, for which an EOI was issued in November 2013.
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