Rotorua Lakes Council chief executive Geoff Williams. Photo: LDR / Laura Smith
A major council IT system upgrade cost about $14.9 million more than first budgeted as the project stretched years beyond initial schedules.
Rotorua Lakes Council points to Covid-19 and complications from unexpectedly becoming an "early adopter" of new software as reasons for the budget and time increases.
The project wrapped in May, a decade after the council first started looking for a system to replace several legacy processes in 2013.
It signed a contract for a two-stage rollout of TechonologyOne's OneCouncil in 2016, with $3.456m initially allocated to the project.
In 2017, TechnologyOne was providing 25 other councils in New Zealand with the software, and Rotorua's council projected it would create cost savings of about $60,000 a year.
In March of that year, council chief executive Geoff Williams told councillors that phase 1 was expected to go live that November and phase 2 in July 2018.
"The base premise is to use the 'out-of-the-box' solution with minimal change," his report said.
Information presented to the Audit and Risk Committee meeting in July this year showed the first phase went live in May 2018 and the second started in August 2019 and went live this May - five years later than originally projected.
It said the overall project cost was $18,413,700.
The council later revealed, in a response to Local Democracy Reporting questions, that almost half of this was spent on consultants, at $9,497,450.
Rotorua LakesCouncil corporate service group manager Thomas Collé. Photo: LDR / Andrew Warner
Council corporate service group manager Thomas Collé said the upgrade was triggered by a need to replace legacy systems up to 24 years old and by a software vendor ceasing investment in one of those products.
He said the council recognised in 2016 that the software no longer supported the size and complexity of the organisation, resulting in time-consuming and manual business processes.
The replacement OneCouncil system "facilitates seamless online end-to-end business processes, enables effective management of data and information, provides accurate and timely reporting, and enables the development of e-services and mobile access".
He said the investment would give the council and community "a platform that will keep pace with the changing needs of our business for at least the next 10 years and beyond".
"It will provide a platform that allows engagement with the community and better availability and transparency of information."
Collé said the total cost included licences, vendor support, third-party assistance and project-related staffing costs.
Money was allocated and approved each year through long-term and annual plans as the budget was then forecast to $14.9m.
"Additional funding totalling $3.5m was sought later [May this year] due to the increased resourcing and consultancy costs, arising from the impacts of Covid and increased configuration costs which came about from [the] council being the first in New Zealand to implement the CiA Property and Rating solution," Collé said.
"Neither of these two factors were known at the time of setting original budgets."
He said the 2016 time and materials contract had estimated costs based on the expected time to complete the original scope of the project, which was between 19 and 21 months.
He said phase 1 - accounts payable, supply chain and financial reporting - went to plan.
Phase 2 - property and rating modules, document management, enterprise maps and community portals - had a delayed start in August 2019, and the Covid-19 pandemic within six months, "changing the way the project worked".
Rotorua had planned - and budgeted - to leverage off development work by other councils scheduled to implement a significant part of the system earlier.
When those other councils slowed or stopped their projects, however, Rotorua wound up doing this development work.
It became an "early adopter" by default and this meant it could not "benefit from the anticipated leveraged work of the earlier adopters".
Phase 2 went live on 31 May 2023.
While some issues were being worked through, Collé said there had been a number of successful significant business processes run including animal licences, rates strike and billing and water billing.
"This has been a significant change project across all aspects of Council and for the most part is working well, staff are having to learn a new system and having to adjust to new ways of working.
"We see this as an investment in the city's future and we will continue to partner with the vendor to ensure enhancements and new functionality are taken up to keep us at the forefront of providing good information and solutions to our staff and customers."
IT upgrade capital spend by financial year
2016/17 and 2017/18: $3.456m
2018/19: $1.2m
2019/20: $2.3m
2020/21: $2.9m
2021/22: $3,634,908
2022/23: $4,922,500
Total: $18,413,408
Source: Rotorua Lakes Council
Local Democracy Reporting is Public Interest Journalism funded through NZ On Air