Tanáiste and Minister for Health and Children Mary Harney TD has communicated to the Comptroller and Auditor General that she agrees with many of its findings in terms of its value-for-money report into the controversial Personnel, Payroll and Related Systems (PPARS) project, which began as a €9m SAP project in 1997 and went over-budget to the tune of €195m.
The comptroller’s report, which was presented to the Oireachtas today, highlighted considerable failures in how the project was implemented. These included a failure to develop a clear vision of what strategic human resources meant to the health service; complex decision-making processes; lack of readiness in the health agencies to adopt the change management agenda; a failure to follow on the pilot implementation strategy; and substantial variations in pay and conditions as well as organisational structures, cultures and processes at the various health agencies.
Although annual estimates were produced, the report found that there was no definitive budget extending over the life of the project that linked money to deliverables. By 31 August 2005, the total cost incurred in the project was €131m. This can be broken down as: €57m spent on consultants and contractors; €20m spent on the project’s infrastructure; €17m on the national administration of the project; and €37m on local agency costs.
The report said the principal consulting and contract payments were in respect of advice and support from Deloitte to the tune of €38.5m, project implementation assistance from Bull Information Systems to the tune of €3.3m and payments to contractors to configure the system to the tune of €11.5m.
The latest estimates as of October 2005 put the total cost of completion for the rollout in St James’s Hospital and eight Health Service Executive (HSE) areas at €195m in the period to 31 December 2006.
The Tanáiste welcomed the report as “objective and balanced” and said that although the PPARS project had overrun to a dramatic extent, it was important to remember the fact that the system works where it is now applied. She said: “While there have been teething problems, as is inevitable, the system is now operational and paying more than 32,000 staff, together with 4,000 pensioners and has the further ability to pay around 70,000 staff. So far in 2005 more than 600,000 payments have been made amounting to some €950m.
“Valuable lessons can now be learned for the management of this project and for IT and change management projects in the public sector generally.”
In terms of the conclusions she has drawn from the report, the Tanáiste said she believed that the aims of PPARS were correct and valid since there was a need to streamline and modernise payroll practices and systems throughout the health sector. But she pointed out: “This was the first major ICT project of its type in the health services for more than 20 years. A number of classic mistakes common to such projects in both public and private sectors were made in relation to PPARS, for example in regard to definition of the project and the tasks required to implement it, the lines of management authority and contracting strategy.
“The governance of the PPARS project proved very difficult because of the independent statutory powers and responsibilities of the former health boards and their CEOs. The HSE now provides a single organisation for project management and governance. This did not exist for the most of the lifetime of the PPARS project.
“The health service management did not have the internal capability to manage this complex project without an over-reliance on external consultancy resources. This matter will be addressed as part of the Government’s new peer review process for major public services IT projects.
“Notwithstanding the time pressures and a genuine concern to get the job done, it is regrettable that public procurement procedures were not adhered to on time in all cases for the awarding of contracts,” added the Tanáiste.
By John Kennedy
