Work on $100 million National Oracle Solution suspended

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Picture: Minister of Health Dr David Clark

eHealthNews.nz editor Rebecca McBeth

Work on developing a national financial management and procurement IT system for DHBs has been suspended following the release of an independent review of the project.

Late last year, the Ministry of Health commissioned Deloitte to review the National Oracle Solution programme to inform its advice to the Government after New Zealand Health Partnerships, which is leading the design and build, asked for a further $22.8 million for the project.

More than $100 million has already been spent on the solution since 2012 “with little to show for it”, says Health Minister David Clark, adding that the Deloitte report is a window into a troubled project.

“Deloitte’s report makes clear that the project was not set up to deliver its expected benefits for DHBs. This underlines that there was an urgent need for the Ministry to intervene when it did," he says in a statement.

Clark says work on the programme has been suspended while his officials review a plan from NZHP to develop a highly detailed business case for work on this area.

"I'm expecting advice on this in coming weeks. I'm not in a position at this point to offer a view on the future of the programme," he says.

The NOS, based on Oracle business applications, is intended to replace all DHBs’ current finance and procurement systems.

The original business case, approved in 2012, envisaged significant savings from the centralisation of these operations and deployment was expected in 2014.

However, since then costs have significantly increased, timelines have been delayed, scope has reduced and the delivery approach has changed.

“These challenges have eroded confidence and trust amongst stakeholders over the ability to successfully implement NOS,” the Deloitte report says.

All DHBs have approved the latest revised timeline and their portion of the additional $22.8 million funding.

But the review says substantial additional investment would be required as this extra cost does not cover DHB implementation and change management costs, Pharmac change costs, ongoing support and maintenance or future roll-out waves.

The report recommends that the Wave 1 of the Oracle applications on HealthBIS infrastructure go live at the first four DHBs, but with increased support and oversight.

The process by which the Ministry of Health commissioned Deloitte to review the project has also been reviewed by Audit New Zealand.

Questions of a conflict of interest was raised in Parliament around Deloitte’s purchase in 2013 of IT company Asparona, which had worked on the NOS programme.

The Audit NZ review found that the Ministry followed the Government’s procurement procedures, but recommends that it significantly improve its awareness of conflict of interest in procurement processes.

“I’m advised the Ministry has accepted Audit New Zealand’s findings and has acted to address them,” Clark says.

This article was updated on Wednesday 5 September.

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