Finance CIO unpacks errors made in parliamentary SAP rollout

A lack of user consultation on a key SAP implementation is causing ongoing friction between parliamentarians and the system’s designers and overseers.

The parliamentary expenses management system - PEMS - has drawn heavy criticism for being some $30 million over budget and years behind its original schedule. The cost is currently $68 million, with $4.04 million a year budgeted for maintenance and hosting.

The government referred the project to the Australian National Audit Office (ANAO) for investigation late last year; the proposed audit remains “under consideration”.

However, a lengthy line of questioning at senate estimates on Tuesday provided some additional insights into the ongoing issues with PEMS, as well as what originally caused many of them to materialise.

Finance chief information officer John Sheridan said PEMS had been processing parliamentarian and staff expense claims successfully for some time now.

He took issue with overly-simplistic representations and descriptions of the system. 

While its main use case is to make parliamentary expense claims more transparent after high-profile scandals like the infamous 'choppergate', Sheridan said the SAP-based PEMS is more than that.

“It’s not just an expense management system [or a] system for checking on credit cards, as it’s been suggested sometimes. It’s an enterprise resource planning (ERP) system,” Sheridan said.

“It looks after the HR systems so it manages 2500 people, more or less; it pays I think 2200 people every fortnight; [and] it looks after what looks like in this financial year will exceed 150,000 claims over that entire period.”

Sheridan said that employing contractor resources to build the SAP system is a contributing factor to the costs incurred so far.

“A lot of the cost is in hiring specialising contractors - not consultants - to provide the program experience that is required to deliver this complex SAP system,” he said.

“If I were to guess, I would say that’s where the majority of funding has gone - in paying for developers to do that work.”

On the issue of delays, Sheridan said the timing of the project meant it was impacted by a series of external factors.

“We had to unfortunately amend the schedule several times since it was originally conceived as a consequence of a range of matters outside the control of the project,” he said, listing two elections and Covid lockdowns as having an impact.

The delays were “regrettable but necessary”, Sheridan said.

Two issues are currently impacting PEMS. 

First, the project team had expected to have an expenditure reporting function live in July last year, which now isn’t expected to be in production until September this year.

Second, there is a much deeper challenge caused by a lack of end user engagement on the project, particularly in the way that PEMS was designed and built.

It's clear that parliamentarians and their staff still encounter a range of usability issues, including a mix of badly-designed and inefficient claim submission processes.

Sheridan, together with members of a revamped steering committee overseeing the build and operation of PEMS, outlined a range of initiatives designed to invite user feedback and resolve usability problems.

While some of the problems have been addressed, others would need to wait until after the delivery of the delayed expenditure report module later this year.

Root cause analysis

Special Minister of State Don Farrell, who referred PEMS to the ANAO, said he’d had some preliminary discussions with the board of IPEA - the independent parliamentary expenses authority, which is the ‘business owner’ of PEMS - this week in a bid to better understand where the project had gone awry.

Farrell’s hypothesis is that the project was too driven by technical personnel at the outset.

“As best I can see, what happened was that the people running the project tended to be the ‘technocrats’ - the people who were experienced at building these sorts of operations, and there was insufficient involvement from the users of the system,” Farrell said.

“I think we now have a combination of those groups working together, and I think the combination of the technical people who know how to build all these systems and the involvement now of the users hopefully ends up in a better product.”

Estimates aired complaints about a lack of user consultation in the development of PEMS. While a user reference group existed, there was an alleged lack of participation, and issues raised in the forum were often deferred.

The result is a clear disconnect with a cohort of parliamentarians who are frustrated with the way PEMS handles expense claims.

Both Sheridan and finance deputy secretary Mary Wiley-Smith - who chairs the PEMS steering committee - acknowledged the outstanding usability concerns.

Sheridan said that usability issues were being collected in a central system and prioritised for remediation, though there was confusion among senators about where and how to report issues.

He also said that around seven user briefings were run in November and December last year, both at parliament house and remotely, “around requirements and concerns users had.”

That had led to some immediate changes being made to PEMS, particularly around notifying parliamentarians as expense authorisers and staff as submitters “when claims were submitted or rejected”.

Other immediate “enhancements” addressed security concerns, such as people being permissioned to use PEMS but not logging into it.

“We are aware of other user accessibility issues and the plan is for those to be considered by the governance committee after [the expenditure report] is delivered, and then prioritised and worked on then,” Sheridan said.

Wiley-Smith concurred: “There’s a number of issues being raised by users. I would say that as a department and as a steering committee, we are completely aware of a lot of these issues. 

“We want to actually hear about them [and] we want to actually investigate whatever users are experiencing.”

Wiley-Smith added that the user-centric lens being applied to PEMS today is a relatively recent change, coinciding with her shift to finance in August last year.

“I would say since I’ve been here, we’ve been very focused on users,” she said.

“A lot of outreach, talking to users. We also send out people to sit with parliamentarians one-to-one to work through what the issues are. 

“If there’s a problem with the system they bring that back and we have a list of those things we need to upgrade or fix.”

Delayed expenditure report

In addition to usability, the main concern with PEMS is the lack of expenditure reporting possible via the system.

Although it is taking in travel expenses, office expenses and similar types of data, the system can’t generate a report on that data, which is a problem given the system - and project - exists to bring transparency to parliamentary expense claims.

The reporting module was meant to have gone live in July last year, as part of a larger phase of work. Instead, it was pushed out to September 2022, and then to May 2023.

Sheridan indicated the formatting of the data is the problem.

“The issue about the expenditure report is getting a quite complex, detailed report with a very high expectation of layout and detail ready in time, and that’s what we were not able to do,” he said.

“It’s a matter of taking the data that’s in the system and producing [a report] in a particularly detailed and historical way that’s being required by the business owners.”

Farrell, together with other senators, was broadly unimpressed that the reporting didn’t work.

“I was mightily surprised when I discovered that, having switched off the old [expenses] system and turned on the new system, that there was simply no way we could get that information until these new computer programs [for reporting] were developed,” he said.

Sheridan said they could not revert to reporting via the old system because data was no longer being collected in there.

“The information has been input into the new system which is live and working, not into the old system, [meaning] we can no longer report from the old system,” he said.

“We could, I guess, dump an Excel spreadsheet of all the data [into the old system] because it’s all in the [new] system, but it’s not in the format that the expenditure report was… and is still required.”

Sheridan is confident that the revised timeline for delivery - which will see the report in IPEA’s hands by May, followed by several months of user acceptance testing, culminating in a planned September 2023 go-live - is achievable.

Farrell said the expenditure reporting module would be a good test of the PEMS team’s ability to satisfy user needs and deliver a system that meets community expectations for transparency.

“I think that’ll be the key if we’ve been able to satisfy all of that,” Farrell said.

“That’s the purpose of what we’re trying to reach at the moment.”