Dita de Boni: NZ daftly addicted to smart solutions

The glitch-ridden the Novopay system continues to be a headache for schools the length of the country. Photo / NZME.

In a world that seems to have gone completely mad over the Antipodean summer, what a relief it is to live in a calm, peaceful country, with a rock star economy and a totally relaxed Prime Minister, looking to join parties while he leads us through a looming global recession and into continued prosperity.

Just as long as you are not young or too elderly; as long as you are European and belong to the top, say, 10 per cent of income earners; as long as you are healthy and/or holding private health insurance, and don't have a zero-hour contract at work; and if you have a savings account of several thousand, or multiple rental properties, you'll be sweet, bro.

But it would be a mistake to think that no craziness at all exists in our very own country. If the definition of crazy is doing something over and over again the same way and expecting a different outcome, we sure are guilty of that. And what we seem to do, time and again; what we have a yearning to do in our very DNA, it seems, is whack huge amounts of cost (i.e. jobs) from the administration of our large government departments, always thinking this can be done effortlessly. But alas, it rarely can.

The official description is "amalgamating back office functions" (i.e. keep on five people to do the work previously done by 25). Inevitably we find ourselves, many years and piles of silver later, in the clag. The cost of hiring consultants, or re-hiring experts made redundant; the cost of psychiatric services for everyone affected by large IT rollouts and cost-saving cock-ups must tally in the millions.

And yet, it keeps happening.

One of the latest was reported by Jared Savage in the Herald in December, when he revealed that plans to merge the computer systems of Customs and the Ministry for Primary Industries had blown out by three years and $30 million. It will take 15 years to realise savings of $535 million, but one is left wondering if the total cost of this amazing solution provided by overseas behemoth IBM could eventually equal, if not completely overtake, the original savings target. By which time, no doubt, a new system promising even more in cost savings will be in the offing.

This came after it was revealed that an IT system designed to capture savings from the Super City amalgamation at the Auckland City Council was $100 million over budget and also late - with a third party quickly drafted in to try to find solutions.

The granddaddy of all IT nightmares, Novopay, continues to give schools the length of the country problems, although fewer problems than at this time last year, proclaims Steven Joyce. It required an injection of nearly $9 million extra at the end of last year to run, bringing its total cost for the year to $35 million, about $17 million more than the last system run by Datacom. We are assured that it is a great asset.

Cost-cutting-mania doesn't always come in digital form, of course. Tony Ryall, honoured as the greatest Health Minister known to mankind with his remarkable achievement of never fronting for the media, had his beloved Health Benefits Ltd scuppered because it was unlikely to achieve $764 million in cost savings in five years as originally promised.

The Wellington City Council is the latest organisation that looks vulnerable to botched back-office amalgamation disease. No doubt it is getting the hard word to operate on a much reduced budget, so it is seemingly ignoring the lessons of history and choosing, in a way that can only be described as opaque, an Australian-based IT company to roll out a single IT system for nine regional councils.

It has rejected local companies vying for the contract (despite Wellington's oft-stated desire to be an IT hub). It has not answered the questions of many ratepayers over the decision. And, most tellingly, it gives the cost of the project as around $10 million, which Wellington-based ICT consultant Ian Apperley rejects, saying it will be more like $100 million, which could be a rather nasty surprise to citizens of the capital in the near future.

How long before this, too, is a budget blowout story? A "late for delivery" story? Luckily, I guess, we live in a rock star economy, so no doubt we can more than afford these costly cock-ups.