April 5, 2010 2:00pm by David Farrar

Housing NZ’s IT

A spokeswoman for newly reinstated Housing Minister Phil Heatley says he does not believe he will have a final say on plans by Housing New Zealand to spend $43 million replacing its software systems.

A pity, as there are some real questions about it.

The board of the Crown-owned corporation approved the business case for its Enterprise Transformation Programme last week. The spokeswoman says the project is an operational matter.

Two whistleblowers, two former managers and Roger Phare, operating officer at existing software supplier Technology One, have questioned aspects of the project, for which a bevy of consulting firms has been paid more than $6m for advice.

Yep that is $6 million just for advice on its IT.

Housing New Zealand has so far refused to detail projected annual savings of $70 million that have been called into question by opposition housing spokeswoman Moana Mackey, or comment on claims that it paid consultants up to $600 an hour and created a potential conflict of interest for strategic adviser Deloitte.

Now the very top lawyers in NZ do charge $600 an hour, but I’ve never heard of that level of charging on an IT project. You might pay it for top commercial lawyers in billion dollar deals, but rare for IT projects.

An earlier story in the Dom Post reported:

A whistleblower has claimed Housing New Zealand may have created a potential conflict of interest for a consulting firm that is providing advice for a $43.6 million information technology project. …

Housing New Zealand would not say whether Deloitte’s contract as strategic adviser precluded the consulting firm from securing any work implementing software that would be purchased as a result of the project.

Computer Society chief executive Paul Matthews says organisations need not preclude consultants that provide them with strategic advice from also having a role in implementing any solution, but it would be unusual and “not particularly good practice”.

“It really depends on the circumstances. With most conflict-of- interest situations, if the terms in the conflict of interest are clear and they are open and transparent and all parties are aware of it, then in some circumstances they may not be precluded, but you would expect in a larger project they would be.”

Housing New Zealand last month acknowledged a steering group comprised of senior executives had over- ruled a recommendation by an evaluation panel in appointing Deloitte. It said the panel had over- stepped its brief in recommending a rival firm do the job.

So the evaluation panel recommended another firm, and this was over-ruled by executives? This is the point as which you get nervous also.