Secret documents reveal Cairns Regional Council’s concerns over the introduction of new system by TechnologyOne
Secret Cairns Regional Council documents have revealed scathing criticism of a new software product by ASX-listed company TechnologyOne. OneCouncil implementation supposed to cost $16.35m but it’s blown out by 50%.
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Secret Cairns Regional Council documents have revealed scathing criticism of a new software product by ASX-listed company TechnologyOne.
A briefing from council’s chief financial officer and project sponsor Lisa Whitton to councillors and other council staff on July 20 last year stated the OneCouncil product was not the “‘out-of-the-box’ solution that we were sold”, an assessment first presented to the council’s audit committee in December 2019.
“The product is not the ‘turnkey’ solution we were sold,” the briefing stated.
“TechOne consultants have lacked appropriate knowledge and skills to guide council through the process, particularly configuration.
“(TechOne’s) resourcing model is inflexible and does not allow TechOne to appropriately support customers.
“The three phase implementation recommended by TechOne was unachievable.
“TechOne (has) not guided us well.”
The Cairns Post revealed last week implementation was severely delayed and the new cost estimate was $24.8m, a 50 per cent blowout, taking the total cost of the software to $36.5m including annual license fees. It can also be revealed the council has experienced major problems with implementing its new software product since the early stages of the project and has blamed TechnologyOne in part.
In September 2018, the council signed a 10-year contract with software vendor TechnologyOne and purchased the company’s OneCouncil IT infrastructure to replace its previous on-premises software.
The new software’s implementation was meant to cost $16.35m over three years.
TechnologyOne’s OneCouncil brochure says the software delivers corporate strategy and planning, financial management, property management, procurement, HR and payroll, capital planning, asset management, customer management, policy and compliance management, and documents management.
According to the July 20 briefing, the first phase of implementation was delivered $1.5m over budget and 12 months late; the council managed to recover about $750,000 in compensation value – free or discounted services and a six-month contract extension – from TechnologyOne.
“TechnologyOne’s OneCouncil software is the industry leading solution trusted by more than 600 local councils in Australia for the benefit of millions of ratepayers each year,” a TechnologyOne spokesman said.
“Since 2018, TechnologyOne has continued to employ experienced and senior managers to the project, who are working closely with a refreshed council project team and project consultants.
“We are absolutely committed to the council and to ensuring the successful completion of this project.
“Cairns Regional Council is already utilising TechnologyOne’s Finance, Supply Chain, Travel and Expense management, HR, Payroll and Electronic content management modules. The final stage of the project – the Enterprise Asset Management solution – is expected to go live in mid-2024.”
TechnologyOne has a controversial history with other councils.
In 2017 Brisbane City Council severed a $122m contract with the company due to a feared $60m budget overshoot.
But in March 2019 Cairns Regional Council leadership expressed confidence TechnologyOne and its OneCouncil product were the correct choice.
The July 20 briefing maintained the OneCouncil product was “fit for purpose”, although the council was “working through replanning (the) entire program”.
The council did not say why it waited three years to bring on an implementation partner, but the briefing from July 20 last year stated the project had not been replanned until that point “due to further discovery work taking place”.
The briefing goes on to state council “significantly underestimated implementation costs and time”.
The report also stated BDO, a new “independent assurance provider”, had been brought on to conduct periodic health checks on the implementation project.
The council has not disclosed the cost of BDO’s involvement, although the BDO contract was among a $12m council spend on more than 40 different project consultants in June 2022.
A week after the briefing – during a closed session of council’s ordinary meeting on July 27, 2022 – the council voted unanimously to bring in professional services firm KPMG at an estimated cost of $8.09m to get the sputtering implementation project back on track.
The meeting report stated the project needed a resource partner to alleviate critical program risks including council’s lack of experience in TechnologyOne product delivery and numerous single points of failure within the existing team.
“Implementation is taking longer and requires more resourcing than originally anticipated. It has been recognised that council does not have the required resourcing capability or capacity to deliver the balance of the program in the time frame required by the business,” the report stated.
“KPMG’s dedicated TechnologyOne implementation team has demonstrated their ability to deliver the TechnologyOne product stack of similar size, scope for local governments across Australia.”
The council predicted KPMG’s services would be required over a three-year period.
The council’s closed tenders register states the tender was awarded during the July 2022 meeting.
Council’s procurement policy demands council publish all contracts valued above $200,000, but the council’s contract register did not record any KPMG contract valued at $8m.
Instead, a KPMG purchase order valued at $249,378 was listed under November 2022.
After the Cairns Post inquired, the council updated its register to include three more KPMG purchase orders from December, January and April; the combined value of the KPMG purchase orders was then $5.2m.
A council spokesman said a “reporting issue” caused the discrepancy.
Council’s CEO Mica Martin maintained the cost estimate of implementation remained $24.8m even when KPMG’s services were included.
“Council does not comment on closed session meetings or workshops as they are subject to confidentiality, per the relevant legislation,” Council’s CEO Mica Martin said.
“We are confident the product is fit for purpose and represents the best value option available to the council.
“Per requirements, council publishes financial statements that report income and expenses each month which are audited by the Auditor-General of Queensland on an annual basis.
“In the most recent published audit, the Queensland Audit Office found that council’s financial governance was effective in every segment.”
Last week the Cairns Post also revealed the council had ignored early consultation advice on the implementation project – one consultancy, who is no longer involved with the project, recommended the CEO be the project sponsor; instead, the council appointed the CFO as project sponsor.
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Originally published as Secret documents reveal Cairns Regional Council’s concerns over the introduction of new system by TechnologyOne
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