Cost of computer system project was 10 times above original estimate

A PROJECT designed to introduce an integrated computer system across the institutes of technology cost more than €58 million — 10 times more than originally estimated.

In 1995, the project was given a price tag not exceeding €5.1m; three years later it was revised to €25.7m; by July 2001, the estimated cost was set at €44.5m — although the scope of work involved in the final estimate was less than that envisaged under the 1998 figure.

Ultimately, the project, designed to introduce integrated management information systems across the 15 institutes, cost €58.4m, €5.7m more than the final approved budget.

Yesterday, publishing his analysis of the project, Comptroller and Auditor General John Purcell said it had “suffered in the initial years from inadequate project planning, resourcing difficulties, a lack of full commitment and weak governance and management structures”. He said the original plan “was not commensurate with the scale of the work to be undertaken” and “unrealistic cost projections and timescales were formulated”.

He criticised the manner in which a contract was entered into with US firm Systems and Computer Technology Corporation (SCT) to supply the system.

It was to cover the key areas of student administration, financial management and personnel management. A separate contract was negotiated with Innovative Interfaces Inc for the installation of a library system.

According to Mr Purcell, at the time the contract was entered into it was known there were gaps in the capability of the finance component of the software — Banner Finance System — but it was considered these difficulties could be overcome.

However, by 2001 the suitability of the HR component of the software — Banner Human Resource Systems — was called into question. The situation at the end of 2001 was that the institutes were contractually committed to purchase the Banner System although it had emerged that two of its main components were no longer suitable for purpose.

Legal advice indicated that proceedings against SCT for contract breaches would be problematic, and it could take two to three years before a court hearing. In the end, credits of €1.4m — a mere 15% of the initial contract value — were negotiated with SCT to reduce the cost of two substitute products that had to be bought in from two other suppliers.

Yesterday a spokesperson for the Higher Education Authority, which is responsible for the IT sector, said it was working with the institutes to develop good governance procedures.