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Finance and
Performance Committee
19 February
2015
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IS
Transformational Programme and NewCore Project Update
File No.: CP2015/00714
Purpose
1. This
report updates the Finance and Performance Committee on progress of the NewCore
project and more generally the IS Transformational programme and budgets for
the period ending 31st December 2014.
Executive
Summary
2. The Long-term Plan (LTP)
2012-2022 included $159 million of efficiency savings for the 2014/2015
financial year. These savings were budgeted to increase to $188 million by
2017/2018.
3. Critical to the success of
achieving these efficiency savings is the Transformation programme.
4. The Transformation programme has
made strong progress with a number of key projects being completed and a
further number of key projects currently in progress.
5. NewCore is one of the most
significant projects that underpins organisational transformation. It enables
the future radical transformation of key customer-facing services while also
reducing the cost to serve each customer. The annual benefits of NewCore are in
excess of $10m annually when the project is completed.
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Recommendation/s
That the Finance and Performance
Committee:
a) note
progress on the NewCore project and more generally the IS Transformation
programme.
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Discussion
IS Transformation Programme
Projects Completed
6. To date there has been strong
progress across the transformational programme with a number of key projects
completed.
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Project
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Issue addressed
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BSR
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Reduces
significant wastage by eliminating duplication and effort caused by disparate
legacy processes and systems which impede mature, cost effective, customer
focused delivery of shared or support services.
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Contact Centre Consolidation
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Challenges in understanding the
consistency, quality and volume of customer interactions across the region
due to multiple business processes and operating models across multiple
locations and technology platforms.
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AMPM
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Disparate systems and processes being
utilised to manage core asset management for parks and property functions
leading to inefficiencies for maintenance programmes and asset utilisation.
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HRIS
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Lack of visibility in relation to core
Human Resources information available to cost centre managers to actively
manage staffing levels and costs.
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Desktop
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Ongoing support for desktop environment,
Windows XP, ceased by vendor introducing risk to the organisation as well as
inconsistent environments being managed.
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Library System Upgrade
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Life cycle management reducing impact to
library services.
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Holistic Performance Reporting (Holly)
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Improve decision making through providing
timely and relevant financial and non-financial reporting as part of the
overall Finance Transformation programme.
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Projects in Progress
7. IS transformation projects
underway include :
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Project
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Issue addressed
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NewCore
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Transforming services to customers
including digital solutions and reduction of costs, by:
· simplifying
and standardising our customer and business processes for customer
interaction, rates, regulatory services and related property data,
· enabling
more effective development of digital solutions for customers, giving them
more choices around how they want to interact with the council,
· consolidating
core customer-facing systems that support those processes,
· creating a
standardised base set of processes and systems for implementation of the
Unitary Plan and bylaw reviews, where only one set of systems needs to be
updated, as opposed to multiple legacy systems, and reducing operational risk
associated with complex end-of-life systems.
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Data Centre Consolidation
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Consolidation of IS infrastructure
resulting in lower operating costs, lower operational risk and stronger
platform for technology enhancement projects.
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Capex Projects Hub
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Raise the standards of project management
and project maturity through implementation of best practices and
standardising project management approaches/methodologies for Auckland
Council.
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SAP Hana & Hybris
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Life cycle management reducing impact to
NewCore project midstream and allowing multi-channel online transactions.
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Network consolidation
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Consolidation of IS network
infrastructure resulting in lower operating costs, lower operational risk and
stronger platform for technology enhancement projects.
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Workplace Strategy
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Support of new working practices through
mobile technology deployment.
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NewCore detailed discussion
8. NewCore is
one of the most significant projects undertaken by Council and underpins
organisational transformation. It enables future and more radical
transformation of customer-facing services, our digital/on-line interface, and
will reduce the cost to serve as a result.
Project % complete as at December 2014
· 32% v Plan 29%
Key achievements in last quarter are:
· Selected
Hybris (an SAP online e-commerce solution). Work commenced to implement.
· Commercial
agreement signed with SAP and work has commenced for Property and Consents
project within NewCore. This followed a decision to use SAP as the best
equipped solution to meet our property and consenting business requirements.
Key risks/issues being addressed (subset of risk
register):
· Data
Quality – combining the data from the legacy councils into one integrated data
set that enables us to deliver a consistent set of services to our customers.
To help address this a Data Governance Council is being formed to be able to
make decisions and set standards for Auckland Council.
· Change
Management – As we consolidate, simplify and standardise there will be changes
required in how we operate. This transformational change will be led by the
operational heads and supported by the NewCore change programme team.
Upcoming significant milestones
· Commence detailed design workshops,
otherwise known as “design sprints” for Property and Consents, on 16th February
· Procurement – complete the vendor
reviews and RFP evaluation, by 28th February
· Lean Design approach completed for
Property and Consents, by 31st March
NewCore Project Costs Year
to Date and Project Life to Date
Current year
Actual YTD December 2014
$ 20.8m
Full Year Budget FY14/15
$ 46.7m (approved November 2014)
Forecast for FY14/15 is on track to be completed within the
approved budget of $46.7m
Whole of Project Life
Actual Life to December 2014 $
51.3m
Budget Life to June 2015 $
77.7m (approved November 2014)
(end of current financial year)
Actual spend on track for project life to revised budget
and no overspend forecast to June 2015.
Project
Completion forecast
The forecast cost for full completion of
the Project is $156.9m as presented in the IS Transformational programme budget
update to Finance and Performance Committee in November 2014.
· Fully costed resource model is in place that
will be reviewed and updated on a quarterly basis for the remaining life of the
programme.
· As appropriate rates and pricing are
being locked in with key vendors.
IS Transformation Capital Budgets
9. The overall
capital budgets for the IS transformation programme are shown in the in the
following table.
Consideration
Local
Board Views and Implications
10. Transformation projects are of
corporate support in nature. Local board views were not sought.
Maori
Impact Statement
11. Transformation projects are of
corporate support in nature. Iwi views have not been sought, nor is it
considered there is a specific impact.
General
12. There is no further general
information.
Implementation
Issues
13. There are no implementation
issues.
Attachments
There are no attachments for
this report.
Signatories
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Authors
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Bruce Gardiner - Acting Manager Finance
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Authorisers
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Kevin Ramsay - Chief Financial Officer
Dean Kimpton - Chief Operating Officer
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