Council ignored early advice from consultants about leadership of IT project set to blow out by $8.5m

Cairns Regional Council ignored advice from project consultants concerning its current software adoption project, the cost of which is set to blow out by $8.5m.

Cairns Regional Council is set to blow its IT implementation budget by $8.5m, a 50 per cent overshoot. Picture: Brian Cassey

Cairns Regional Council ignored advice from project consultants concerning its current software adoption project, the cost of which is set to blow out by $8.5m.

In 2018 the council signed a 10-year contract with publicly-listed Australian software vendor TechnologyOne and purchased the company’s One Council IT infrastructure to replace its previous on-premises software.

The implementation of the software was meant to be rolled out over 11 modules in three years at a cost of $16.35m.

The Cairns Post revealed on Monday the council’s project is severely delayed – the project won’t be completed until the 2025/26 financial year and will cost $24.8m, a 50 per cent blow out.

TechnologyOne has a controversial history with Queensland councils. In 2017 Brisbane City Council severed a $122m contract with the company due to a feared $60m budget overshoot.

In 2019, when the software project was announced, Cairns Regional Council played down fears it would encounter similar issues.

Cairns Regional Council’s CEO Mica Martin said the project had strong governance. Picture: Brendan Radke

It can now be revealed consultants engaged early in the project’s life recommended the CEO be the project leader due to the oversight their position had of all council departments.

Instead, the council at the time appointed the Chief Financial Officer as project leader.

The council declined to comment on why this move was made and whether or not the decision had any impact on the project’s implementation delay.

Council’s CEO Mica Martin said project complexities and human resource shortages had caused the project delay.

“Council has invested $12.8m in the business improvement project, with a further $6.2m in the 2023/24 budget,” Ms Martin said.

“At this stage, council is about halfway through the project, which is expected to be finalised in the 2025/26 financial year.

“There has been strong governance in delivery of this project from the outset, which has been supported by routine oversight from the audit committee.”

At a meeting on July 11, council’s audit committee requested council management consider quarterly health checks on the project by consultancy BDO Australia.

Division 1 councillor Brett Moller, who sits on the council’s audit committee, said the project’s budget blowout was inevitable in retrospect. Picture: Isaac McCarthy

Ms Martin said the health checks were routine for the project.

“Independent health checks have formed part of the project governance since inception in 2018. Timing has historically been driven around key planned project milestones,” she said.

Division 1 councillor Brett Moller, one of three councillors who sit on the audit committee, said the budget blowout was inevitable in retrospect.

“From inception, the (project) has had a strong governance framework in place including independent assurance with a project leadership team, a project management team and external members representing external stakeholders,” Mr Moller said.

“Based on our leanings and better understanding of the product in hindsight … the original estimate was never achievable.

“As a result the forecast was reset last year, communicated to council, and council is working to deliver the benefits the project will bring as originally planned.

“Council had no choice but to invest heavily in new systems and through a tender process; TOBI was the successful tender based on best fit, functionality and value for money.”

Originally published as Council ignored early advice from consultants about leadership of IT project set to blow out by $8.5m