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Details of plagued $104m IT project revealed

A delayed, $104 million government IT project was plagued by a litany of problems including an unwillingness to pay the salaries required to attract skilled staff.

Customs began work on the Joint Border Management System (JBMS) in 2011, a project in partnership with the Ministry of Primary Industries aimed at merging and streamlining its ageing computer systems.

With an initial budget of $76m, the work was awarded to IBM who pledged to have it completed by 2012.

But the budget blew out to more than $100m, as did the completion date by five years.

While the system is now largely complete, Customs is still without a “risk and intelligence tool” designed to help detect drugs at the border by analysing up to 150 pieces of information on each incoming shipment.

During the drawn-out process, Customs said little about the delays, but a ' lessons learned' review carried out by Deloitte has revealed a project beset by problems.

Unwilling to pay for top talent

Describing the JBMS as a “once in 20-year event” for agencies like Customs, which required skills not widely available in New Zealand, the report found serious failings in the way the project filled those roles.

Hiring that expertise from overseas was a necessity but did not come cheap and the project had tried to unfairly fill roles with unsuitable staff who had no experience setting up such a large and complex project.

“In the early stages, the programme was not willing to pay the rates required to attract the right capability in New Zealand or from offshore.

“This led to many instances of individuals not ideally matched to roles, and this compromised the health of both those individuals and the programme.”

The report, which did praise Customs management for being transparent about the problems, said many felt the project had become a “tickbox” exercise rather than one that actively thought about how problems could be solved.

“As the programme progressed, the vendor did not commit the resources required to the programme. The level of commitment only raised once the Minister of Finance raised attention to the vendor executive that they were not delivering.”

It also began to affect staff morale within Customs, some who began to resent the resource-hungry project.

“Over its seven years, JBMS took its toll on the teams and broader agencies that it was delivering into.

“Over time, the perception in Customs was that JBMS was ‘why we weren’t doing anything else’ and this impacted JBMS’s ability to get broader organisational input and support.”

Murray Young, chief information officer at Customs, said a perception that a large project was dominating resources was common in such situations.

There had been a demand for a range of skills as the project progressed and in the early stages some tasks had been done in-house when it should have been done externally, he said.

“There’s no doubt the project took longer than it should have taken for a whole heap of reasons.”

IBM struggles

Technology giant IBM was awarded the contract for the project but struggled to deliver.

After a string of cost blowouts and unexpected delays, a new agreement was signed in 2014 but two years later IBM failed to complete the project within the agreed timeframe.

That left Customs to complete the remaining work on the complicated risk and intelligence tool, using $27.4m shaved off the sum payable to IBM. It is scheduled to be completed in 2019.

The Deloitte report was critical of the corporation’s work on the project, which had only improved once a top government minister contacted senior management.

“As the programme progressed, the vendor did not commit the resources required to the programme.

“The level of commitment [was] only raised once the Minister of Finance raised attention to the vendor executive that they were not delivering.”

Customs had been left hamstrung by a contract that heavily favoured IBM, who had assured it was capable of undertaking such a large and complex project despite recommendations it be split up.

“The vendor’s reassurance of their ability to deliver a project of this size led to the adoption of their methodologies, which many felt were not suited to this type of programme.”

Young said IBM’s New Zealand arm had struggled with resourcing initially, but had stepped up and largely finished the programme off.

When asked about why the Minister had to step in, Young was uncertain.

“You’re right in what you’re quoting, I think there was a lot more to that transaction than just that one discussion.”

IBM was contacted for an interview but responded: “The Joint Border Management System is an important transformational project to modernise New Zealand’s border control. Customs is a valued client with both parties committed to its success.”

Customs Minister Meka Whaitiri was unavailable for an interview.