A report released last month by the NSW Auditor-General has found that of four significant IT projects being run by the Sydney Water Corporation, only one is running on budget and to schedule.
Adverse audit findings are nearly always quickly acted upon, and whether by coincidence or not, Sydney Water issued a Request for Tender (RFT) for the "provision of various project review services for IT projects" on 2 December.
The RFT "aims to establish relationships with up to three project review service providers", initially for three years with up to two additional two year extensions.
According to the RFT, Sydney Water’s IT Program Management Office (PMO) oversees the IT Project Program of Works. This year there are 30 new or continuing projects. These projects are categorised as:
- Small projects under $500,000;
- Medium projects between $500,000 to $ 5,000,000; and
- Large projects over $5,000,000.
The RFT says approximately 16 Health Checks, 14 Post Execution Reviews and 19 Benefits Realisation Reviews may be expected to be shared between the successful suppliers in 2010.
According to Sydney Water, Project Health Checks are required on a regular basis to ensure that projects are following and meeting Project Delivery Framework, Project Governance and Budgetary requirements.
An industry briefing will take place at 9:30 am on 8 December at 1 Smith St, Parramatta.
Sydney Water has a total Operating Expense Budget of $1.11m and a total CapEx budget of $1.29b. The corporation is one of the Government’s major utilities and sits within the State Government’s Environment, Climate Change and Water Super Department.
The Auditor-General’s Volume Seven Report: Financial Audits, focusing on Environment, Climate Change and Water, follows the release in 2003 of a report outlining "numerous problems with the governance and implementation" of Sydney Water’s Customer Information and Billing System.
The four current Sydney Water IT projects the Auditor-General makes mention of are:
- Information Management Program;
- Field Resource Management (FRM) Stage 2;
- Customer Management System (CMS); and
- Maximo consolidation project.
The Auditor-General underscored the CMS and Maximo Consolidation projects as the two that are running both significantly behind schedule, and substantially over budget.
The CMS is a two-stage project which aims to improve customer service, reduce reliance on multiple unsupportable systems and reduce operating costs. Stage 1 was originally budgeted at $21 million. In the Auditor General’s report, the revised cost is $55.3 million – more than double the original budget – and with a revised delivery that’s more than one and half years behind schedule. The project is now due to be completed in February 2011.
The audit attributes the budget increase to system integrator costs pertaining to:
- An inadequate original budget following quotes from prospective service providers;
- An extension to the design phase to incorporate proof of concept and extensive review cycles (with a consequent delay in implementation date); and
- Extended procurement phases for both CMS software and system integrator services.
According to a Computerworld report in January 2008, CapGemini was engaged to assist in the development of business process specifications and requirements definitions. In October 2008, Sydney Water issued a tender for the implementation of a Siebel CRM solution.
The Maximo consolidation project will replace the Corporation’s current asset management systems which are "approaching obsolescence and are unsupported by external vendors." It is also running substantially over budget, with a revised budget of $31.3 million up from $18.4 million. It has also seen a schedule set back and is now due to be released in October 2010 (from August 2009). The reason for the budget over-run is underestimation of the complexity of the project. The project is now on track to the revised schedule and budget.
The only project that has not exceeded budget and schedule forecasts is the Information Management Program. It was budgeted at $24 million and is due to be completed as per the original service delivery date of June 2011.
According to the audit report, the corporation’s Information Management Program will replace previous document management systems and deliver new systems to better access and share information. The new project is believed to be based on Oracle’s Unified Content Management System. (In December 2004, Sydney Water implemented IBM DB2 Document Manager and Content Manager as a document management solution).
Field Resource Management involves developing a geospatial information system and mobile documents capability, utilising Tensing Mobile GIS. The Corporation commissioned the first stage of FRM in July 2008 at a cost of $19.7 million. It commenced FRM Stage 2 in August 2008. The project is running on budget but is five months late.
FRM Stage 2 builds on the Stage 1 deployment to provide up-to-date location information to the field workforce, reduce search time and improve safety and operational efficiency. Its budget is $7.9 million, with implementation scheduled for November 2009, three months later than initially scheduled. It has an expected ROI of $1.2 million per annum.
Intermedium identified a $58.5 million allocation to Sydney Water Corporation for ICT CapEx in the 2009-10 NSW Government Budget.