Capital costs for parliament’s expense management software have more than doubled from initial budget to $60 million, with officials on Wednesday acknowledging a gross underestimation of just how complex the SAP system would eventually become.
The Parliamentary Expense Management System (PEMS) is the IT system that manages expenses and payroll services for parliamentarians, their staff and some government agencies.
The software project began in 2018 with an initial budget of $38 million that included $30 million in capital funding to replace an aging information management system.
PEMS remains unfinished today and serious delays have kept the public reporting of parliamentarians’ expenses hidden from public scrutiny.
An audit of the project found that it suffered from a lack of user planning and scope definition that led to a massive underestimation of what how bespoke the solution would need to be.
Appearing at an audit committee hearing on Wednesday, officials from the Finance department confirmed their project struggles could be traced to a decision to go for a largely “off the shelf” software product.
The German multinational was selected based on a belief that only up to 10 per cent of its product would need to be customised.
“It appears that assumptions were made around how much of an SAP system would need changing to deliver the outcome,” Finance first assistant secretary Kylie Bryant said.
“Those assumptions proved to be wrong.”
Six years later and with more than $74 million invested in PEMS, the system is finally delivering core functions but still relies on manual workarounds, other functions are still missing and most end users are dissatisfied with the system.
Ms Bryant blamed the “complexity of the system” for the issues.
She said Finance had wrongly assumed that widely used SAP software could handle the expense and payroll functions but it “is quite a different process for managing and supporting parliamentarians”, in part because of an unusual enterprise agreement for the staff of members of parliament.
Acting auditor general Rona Mellor said there were clearly gaps in the governance of the PEMS project but it also suffered from a failure to test and engage other agencies about the SAP software.
“What we don’t see evidence of here is engagement with this department and other users of that kind of software to see whether or not the customisation is going to be a risk,” Ms Mellor told the inquiry.
“We’ve certainly seen in other audits that over customisation actually leads to problems.”
The majority of the PEMS project costs have been for contractors, consultants, outsourcing and Department of Finance employees. PEMS is now a “very bespoke system”, Ms Bryant said.
Officials told the inquiry on Wednesday that if they could redo the project they would incorporate far more user engagement and testing and bring in business owners earlier, rather than treating PEMS as an ICT project.
Ms Mellor added that documentation is critical to a complex technology project that takes years to build and will see a cycle of contractors and in-house staff involved.
“…Be absolutely rigorous in the documentation so that you’re not caught short in the future. PEMS might have a ‘mark 26’ [in the future] and who’s going to know how it all patches together if we haven’t kept wonderful documentation [on] where the risks are, how it connects to the user experience, how it connects to reporting, how the two agencies connect,” Ms Mellor said.
“I think there’s probably a lesson here in the design of the delivery [and] the level of documentation you need, particularly if you’re contracting in.”
An earlier version of this article incorrectly stated the initial capital funding for the project was $20 million. The initial capital funding was $30 million.
