The once in a lifetime overhaul that Centrelink deserves

The Department of Human Services is considering upgrading its 30 year old Income Support Integrated System (ISIS) in the new year. It's an incredibly risky task but this is too big an opportunity to ignore.

The Department of Human Services (DHS) has indicated it is considering upgrading its 30 year old Income Support Integrated System (ISIS) in the new year. This upgrade presents a once in a lifetime opportunity for DHS to improve its digital offering which is currently cumbersome, unproductive and still full of paperwork.

However, as many government departments before it, DHS has an incredibly risky task ahead.

DHS CIO Gary Sterrenberg has said he is looking at other successful projects to see what DHS can learn, which is certainly encouraging. Some of these projects were outright successes, others had successful aspects and some were complete disasters.

One example that still stands out in many minds is the payroll upgrade of Queensland Health which suffered a staggering budget blow out of $1.25 billion.

Large complex programs, like the upgrade of ISIS, are notoriously difficult to implement. They are hard enough when the applications are reasonably new and well-understood. When they are old, people have moved on and there is very little accurate documentation, they provide a formidable challenge.

But this is too big an opportunity to ignore. The digital transformation that has to occur for DHS needs to go far beyond the online form approach, which was a legacy from the Government’s 2000 Online Strategy.

How can this succeed?

Sterrenberg’s proposed measures like breaking the project into smaller pieces or work packages should improve the chances of success. But, this in itself creates further complexity as the relationships between these pieces of work needs to be understood and effectively managed. Other programs have deployed software and techniques that have managed such complexity to ensure that benefits can be achieved even though compromises are made and changes in direction are incorporated in the project.

Where do you start with a project like this? Is it feasible to reverse engineer the application’s code to better understand the business rules? Even if this is possible, is this sufficient to gain a complete understanding of the whole system including the business processes, compliance obligations, systems functions and roles and responsibilities of the people involved?

Is it necessary to gain a clear understanding of the current systems in order to move forward? Many would argue that a new system can be designed without consideration of the current systems. This sounds like a great theory and provides a compelling proposition in cutting costs but ultimately ends up being penny-wise and pound-foolish. Any savings from not fully understanding the current state will come back to bite during the project, or, worse still, after implementation.

This was seen in the upgrade of Queensland Health’s payroll where it was uncovered that when the payroll system went live the payroll calculations were done incorrectly. This resulted in Queensland Health having to employ an extra 500 people to perform the manual override of the payroll system.

If DHS doesn’t analyse carefully how processes are performed, how their systems are currently functioning, how they’re used by employees, its transactions and the compliance obligations before building the new system, what will be delivered will not be fit for purpose.

What’s the solution?

The upgrade of ISIS will require a more comprehensive capability than simply a set of documents, set of spreadsheets or bunch of diagrams that describes the business.

The best way to capture this information is in the form of a business model that represents the detailed interactions of business processes, roles of individuals, how systems will be used and how compliance will be managed. The business processes are a great place to start. There are people across the organisation who understand the processes that are performed and what the systems provide in relation to these processes. However, this exists as organic knowledge in scattered, disconnected documents and as knowhow held by workers.

A coherent, consistent and integrated model will help to bring together the information locked up in thousands of documents into one reliable source in a way which can cater to various stakeholders who will require different snippets of information at different times, in varying forms. It would help DHS management to understand the scope of the upgrade and be more strategic in decisions and it would also help project managers to align requirements with specific roles, processes and systems.

The business model should also be used to simulate the expected operating environment of DHS, capture all knowledge, communicate to all parties concerned, incorporate changes that are discovered, drive the development of ICT systems, deliver an operating model and allow future changes in the operations.

While a business model is great for planning and helping management make strategic decisions, implementing the business model requires an intuitive business management system (BMS). A BMS has the capability to see systems and processes across an entire organisation and identify where IT is problematic or needs updating.

A BMS links operational processes, responsibilities, controls, risk and compliance obligations through one integrated system. It is used to guide the operations of the organisation and to simulate how new IT software and systems will impact the organisation. Most importantly, the BMS can capture and manage knowhow in a manner that is relevant to people across the organisation, not just the IT staff.

The BMS will assist in validating the business case, by allowing a comparison of costs and performance between the old and the new models. It will be instrumental in the implementation phase as it will generate the standard operating procedures and training guides and include the compliance obligations. It will be the single source of truth for business operations and allow the agile adoption of further technological improvements.

One final point on the capture of an accurate current state is that this provides strong guidance on implementation. The DHS needs to make a big transition from their current business model to a new business model, not just from an old IT system to a new system. The BMS will provide a clear understanding of all aspects of the current business model and the future business model, making it clear how to make the transition between the two.

Having implemented a new business model powered by an active BMS will enable the DHS to incorporate future change, responding at lower cost and greater speed to future requirements and taking advantage of new technologies.

DHS is an organisation that impacts hundreds of thousands of Australians. The upgrade of ISIS presents a timely opportunity for DHS to digitise its offerings to create an organisation that is efficient and meets the needs of the people that depend on it. Starting with a solid understanding of the current business in the form of a business model is critical to success.

Bruce Nixon is the chief executive of business management systems provider Holocentric.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles