Feeds

IBM Australia on the stand over $1bn blowout

Inquiry asks why ex-IBMer wanted Big Blue in the race for payroll system

Beginner's guide to SSL certificates

In 2007 the Australian State of Queensland decided it needed shared services arrangements to streamline its affairs and reduce costs.

One shared service was a new payroll system that would be used, in part, by the State's health department. IBM won a deal to do the job for an initial payment of $AUD6.19m. But by the time the system went live, had received $37m and by 2012 a review by KPMG found the system's costs had reached at least $400m.

And still the system wasn't working. Staff were overpaid, underpaid and sometimes not paid at all. Queensland's State government even docked workers to recoup overpayments, which went down predictably well with unions.

All sorts of stakeholders are livid about the affair, more so when it was revealed another $836m is needed to get the SAP-based system working.

When Queensland's government changed in 2013 it therefore called an inquiry into the matter, and hearings this week got interesting as IBMers past and present took the stand.

What's emerged is a situation in which two companies – Accenture and Logica – had deep engagements with the agency seeking the payroll system. Both were therefore natural bidders for the work.

This week's hearings explored whether a consultant on the procurement process before the project, Terence Burns, gave IBM the inside running for the gig by suggesting the company bid and later by arranging a “dry run” at which IBMers could test their pitch. Burns is said to have felt that more competition for the deal would be a good thing.

There's nothing wrong with that, but Burns is a former IBM employee, having headed its operations in a South African province. He has has also filled numerous consulting roles around the world, including a stint running his own project turnaround consultancy. He had also once hired IBM for work in New Zealand.

Burns has denied having any conflict of interest that would have made his decisions on the project contentious. His statement can be read here (PDF). He's also said, during hearings, that he doesn't recall if he offered dry runs to other bidders, or conducted such sessions.

Before Burns, current IBMer – indeed the commercial and public sector lead for IBM Global Services in Queensland – Lochlan James Bloomfield took the stand. His statement (PDF) revealed that some IBMers were working inside the parts of the Queensland government that assessed bids and that they passed information about the assessment process to him.

Some of that information included a strong suggestion that Accenture had been able to read IBM's bid. Bloomfield's statement also says that in his opinion Burns dealt ethically with IBM throughout.

The inquiry will report at the end of April and The Reg will bring you news of its findings. If you'd like to tune in yourself, live video of hearings can be found here and transcripts here. ®

Protecting against web application threats using SSL

More from The Register

next story
Hey, Scots. Microsoft's Bing thinks you'll vote NO to independence
World's top Google-finding website calls it for the UK
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.