Case Study: Analysis of Queensland Health Payroll System Failure

This case study examines the Queensland Health (QH) payroll system implementation failure, a major technological project disaster. The analysis identifies the main issue as the project's complexity, encompassing system, information, industry, client relationship, and system complexities. Early implementation failures included system availability problems during cutover, leading to processing delays and backlogs. Cost overruns and schedule delays stemmed from inadequate planning, testing, and documentation, alongside communication gaps and poor team structure. The early delivery method lacked proper system testing and parallel system testing, resulting in data integrity issues. Recent delivery methods involve system reviews, additional staff, and preliminary inquiries. The study concludes by highlighting the need for improved business readiness practices, effective communication, and a well-designed team structure to prevent similar failures. The study also highlights the need for better risk management during project implementation.

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Project MGMT

Introduction
The payroll system implementation disaster at the “Queensland Health in 2010” is said to be
the major technological project failure. Queensland system is said to be the public sector
healthcare provider. It provides dental, aged care, and medical facilities in Queensland. In the
paper, discussion has been carried on the issues that are linked with the system failure of the
Queensland health payroll system. Afterwards, it has also included the schedule delay and
cost overrun that contributed to such issues. It has examined how an overpayment payment to
some staff has caused the issue. At the end, discussion has been carried on the early and
changes in delivery of the project.
Main issue associated with the case project
Complexity of the project is the major issue in the failure of QH implementation project.
Complexities in the project were connected with the system implementation, information
system, industry complexity, client relationship complexity and system complexity. All these
complexities were found in the initial stage of the project and further lead to failure of it.
During the cut over period of payroll to the new system, there was significant issue with the
system availability to payroll staff. It reduced the process time. This also created the
unprocessed adjustment and backlog of the payroll forms. As of 2 May 2012, there was
around 570 logged system issue. System enhancement and defect fixes were significantly
required to occur during the release schedule. At the same time, significant issues and delays
were found to prioritization of some other fixes such as legislative compliance changes,
bargaining changes as well as changed in pay date.
In addition to this, the inadequate documentation of business requirement was also seen at the
beginning of the project. The lack of periodic reviews related to the requirements of business
has brought difficulties in the system implementation. Communication gap, lack of training,
and ineffective designing of the team structure is also found to be the reason of QH payroll
system failure. It is found that the readiness practices and activities were not proved to be
effective (IT news, 2017).

Failures with the early implementation of the project
Time was the one factor that leads to the Queensland Payroll system failure. Due to the delay
in project, it was not able to ensure the successful implementation of its project. At the same
time, designing and documentation project structure was also not created and organised in
proper manner that further lead to the failure of project in its implementation phase. System
and process testing prior to go live was not able to identify the major implementation risk.
Due to this, effective payroll system has not been fully quantified and understood. It has
neither checked the validation of new process nor the system usability in the business
environment (Carlton and Peszynski, 2018).
In the initial time, the duration of project completion was August 2008. However, in June,
IBM has decid+ed to accomplish some extra planning in order to provide the whole project
solution in 2010. Therefore, changes cope as well as lack of organisation requirements have
results in the consideration cost overrun and project found to be unsuccessful. Lack of
communications well as poor designed team structure is another reason for QH payroll
system failure. Due to lack of awareness, configuration as well as ignorance has led to the
several negative outcome in the system failure. Moreover, organisation plan and changes was
also not accessible at the right time.
Schedule delay and cost overrun that contributed to such issue
It is seen that the worst failure of the project has been caused by the incapacity of their
leadership team to properly test as well as plan the system during process of development. In
the year 2010, due to the cost overrun and cost overrun, it has decided to let the structure go
live even without doing any test. Due to delay and cost overrun, it resulted in over
35000oayroll anomalies. At the same time, the cost overrun has caused the several workers
underpaid and non paid. As compare to this, it overpaid several employees with total of AU
$400 M. due to this, Queensland has disbursed millions in order to collect he unearned fund
from the employees. Due to its inability, it leads to the disappointment of QHS project of
Payroll. The issue of schedule delay has also brought the significant variations in the project
scope. IBM was not able to deliver to the original issue and further it was causing the delay
of 6.5 weeks to go live (Glass, 2013).

Early delivery method of this project
In the prior system, it does not included the system testing to know system is working
properly or not. The system testing was not perming and only the testing team tested a subset
of the worker pay before going live. At the same time, before launching system online, it also
not sued to perform parallel testing system. designing and documentation structure of project
was also not created and organised in proper manner that further lead to the failure of project
in its implementation phase. Due to this, the early delivery method included the data integrity
issue. Without any prior checking of the system and amount, it does not delivered the
expected benefits in budget and time. A figure of business readiness practices and activities
were not properly developed before the new system implementation. In this way, the early
delivery of the project required several changes in its implementation and system testing
(Asgarkhani et al, 2017).
Recent delivery method of this project
In the current delivery methods, the payroll system has been looking into the potential review
of new system implementation. At the same time, it has also employed dozens of additional
staff to fix. At has also appointed preliminary inquiry for looking at the vendors late payment,
implementation issues as well as regular additional cost for managing the system. In the
recent time, staff has to sue the paper records for their patient. In the recent time, it is also
required to include the electronic record of the patients (Moore, 2013). In addition to this,
“SAP S/4 HANA solution has replaced the 20 year old, out of support SAP ERP that is
known as he “finance and materials management information system.” It was the result of
heavily delay FSR (Financial system renewal) project of department in order to replace the
$36 million efforts for replacing the FAMMIS system. The new implementation process was
further centralised and standardised including the introduction of centralised pay and central
processing team. In the new delivery of the business processes, fundamental difference has
been identified regarding how line managers and district managers are providing the pay
information (Norris, 2016).
It is found that the digital hospital program is bringing improvement in the patient and
healthcare outcome. Moreover, electronic medical record has been started in the Queensland
hospitals that is powerful and valuable tool for the doctors. In the recent time also,
Queensland government is headed toward the other payroll disaster. Under this, initial plan of
those to spend the $100 million to outsource the payroll system for prison officers, state

ambulance and implementation of the new HCM solution. Previously, it was about to ensure
its accomplishment by June 2016. In the starting of the year, it has spent around $35 million
but none of the modules of HCM has been implemented. However, the ineffective decision-
making, unnecessary complex structures in management, and ambiguous responsibilities
have led to the time and cost overrun (Wikkins, 2013).
Conclusion
In the limelight of above discussion, it can be stated that Queensland health payroll system
faced several issues due to improper system implementation. The complexity of the project
has been seen by offering over payment to some staff and under payment and non payment to
some staff. The testing system of project was also ineffective that put negative impact on the
payroll system effective operation. . A number of business readiness practices and activities
were not properly developed before the new system implementation. It is seen that
communication was not proper. At the same time, the system had poor designed team
structure that further proved to be the major reason for QH payroll system failure. Due to lack
of awareness, configuration as well as ignorance has led to the several negative outcomes in
the system failure. A number of several business practices and activities were not effectively
as well as fully developed before the new system implementation.

References
Asgarkhani, M., Cater-Steel, A., Toleman, M. and Ally, M., 2017, December. Failed IT
projects: Is poor IT governance to blame?. In Proceedings of the 28th Australasian
Conference on Information Systems (ACIS 2017). Australian Association for Information
Systems.
Carlton, D. and Peszynski, K., 2018, June. Situational Incompetence: the failure of
governance in the management of large scale IT projects. In International Working
Conference on Transfer and Diffusion of IT (pp. 224-244). Springer, Cham.
Charette, R.N., 2017. Low Clearance Ahead: Can Predictable IT Crashes Be
Avoided?. Computer, 50(10), pp.86-91.
Glass, R.L., 2013. The Queensland Health Payroll Debacle. Information Systems
Management, 30(1), pp.89-90.
It News. 2017. The Qld govt is headed towards another payroll disaster. [online] Available
from: https://www.itnews.com.au/news/the-qld-govt-is-headed-towards-another-payroll-
disaster-461360
Moore, T. 2013. Worst failure of public administration in this nation': payroll system.
[online] Available from: https://www.smh.com.au/technology/worst-failure-of-public-
administration-in-this-nation-payroll-system-20130807-hv1cw.html
Norris, S., 2016. Governance standards: Improving standards. Company Director, 32(10),
p.52.
Wilkins, P., 2013. Getting smart from software disasters. Government News, 33(1), p.38.
Yazdanifard, R. and Ratsiepe, K.B., 2011. Poor Risk Management as One of the Major
Reasons Causing Failure of Project Management. Management and Service Science.