Queensland Health Payroll System Project Failure: A Detailed Report

This report provides a comprehensive analysis of the Queensland Health (QHS) payroll system project failure. It details the primary issues, including poor resource allocation, misaligned goals, and inadequate communication, which led to significant problems during the implementation phase. The report examines failures during the early project stages, such as improper communication of business requirements, cost overruns, and time constraints, as well as the impact of multiple agencies involved. It further explores schedule delays, cost overruns, and the early delivery methods used. The analysis includes a discussion of changes in the recent delivery methods, focusing on the need for well-defined business requirements and alignment with project management methodologies, recommending the System Development Life Cycle (SDLC) approach. The report concludes with recommendations for project managers, emphasizing the importance of clear planning, project management skills, and the adoption of agile methods within the SDLC framework to improve project outcomes and prevent similar failures in future projects. The project's failure resulted in significant financial losses and operational inefficiencies for Queensland Health.

Running head: QUEENSLAND HEALTH AND ITS PAYROLL SYSTEM PROJECT FAILURE
QHS and its Payroll System Project Failure
Name of the Student
Name of the University
Author note

1QHS AND ITS PAYROLL SYSTEM PROJECT FAILURE
Table of Contents
1. Primary Issue with Queensland Health and Payroll System.......................................................2
2. Failures during Early Project Implementation.............................................................................2
3. Schedule Delays and Cost Overruns............................................................................................4
4. Early Delivery Method for the Project........................................................................................4
5. Changes during Recent Delivery Method....................................................................................5
6. Recommendations for Project Manager towards the Project......................................................6
References........................................................................................................................................8

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1. Primary Issue with Queensland Health and Payroll System
In the year 2006, the Queensland Health, Australia had decided to bring in a new form of
payroll system for their employees. In order to achieve this purpose, the Queensland Health had
chosen IBM Australia as the primary contractor for implementing a new payroll system in the
year 2007. The initial price of the contract was set at approximately $46.5 million (Queensland
Health payroll fail: Government ordered to pay IBM costs 2020). The project indicated towards
developing of a new kind of payroll system, which was expected to be finished in a time duration
of six months.
From the discussion and analysis of the case in relation to designing the new payroll
system for QHS, it can be discussed that there were many issues that lead towards the poor kind
of implementation of the payroll system (Paterno and Zhao 2018). Software analysts and project
manager had pointed to the facts that inappropriate form of resource allocations, misaligned
goals, poor communications and insufficient resources were considered as the primary issue
towards the poor implementation of the system.
In this project, the management of various combinations of wage payments for over
24,000 workers were withhold. Based on noticing the worst case of the QHS, the IBM Company
had planned for initiating and completing the entire project in just a time period of six months
(Pain et al. 2015). In this prospect, a certain lack of various identifiable objectives were leading
towards a significant cause for the failure of the total project outputs.

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2. Failures during Early Project Implementation
During the time of preparing of the project contract between State of Queensland and
IBM Australia, the initial idea was set for replacing of the aging payroll system at QHS.
However, during the progress over the project, there were a series of 35,000 payroll mistakes,
which had ultimately raised the project budget to an amount of AU $1.25 billion (Paver and
Duffield 2019). When the payroll system was put under live operating conditions, a large
percentage of employees at Queensland Health, which included staff, doctors and nurses were
paid incorrect amounts and some of them were not paid at all.
The obvious failures that had been made during the early phase of implementation of the
designing of the payroll system for QHS are discussed as follows:
1. Improper form of communication had led to poor form of communication of business
requirements to IBM. The Queensland Health had not specified their business complexity to
IBM based on which they would design an efficient payroll system (Carlton and Peszynski
2018). Hence, due to a poor level of communication of initial business requirements, the final
project costs had escalated to four times while taking three months longer than the expected time
of delivery.
2. Cost overruns and time constraints were the leading reasons for letting the system to go
to a live test condition without going through the testing phase, which further led to certain cases
of 35,000 anomalies (Carlton 2018). In these case, it occurred that some of the employees were
partially or not paid at all while on the other hand, the system had inadvertently paid extra
amounts to their thousands of employees leading to complicated situations.

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3. There were numerous boards and agencies present and involved with the project
outputs, which had caused confusion in assigning particular responsibilities to different persons
over the work to be performed for the project (Duffield and Whitty 2015). Ineffective form of
shared understanding of stakeholder expectations in relation to the deliverables expected for the
project led to the improper form of quality outputs.
3. Schedule Delays and Cost Overruns
The payroll system was not considered as a complete success towards the Queensland
Health Department. In the initial phase, IBM was awarded the responsibility of the contract of
$98 million on 5th December, 2007. However, it was seen at the end of October 2008, IBM had
still not achieved any criteria for contracted performance (Tursunbayeva et al. 2017). Despite the
situation of IBM being lacking certain areas as mentioned within the contract, Queensland
Health Department had awarded them with $32 million from the initial $98 million contract.
In May 2012, the Queensland Health had certain number of overpaid staff, which had
raised the cost of the project by AUD $112.3 million. In the defined budget, AUD $16.5 million
had been further been repaid while the waived amount was raised at AUD $3.3 million. The
outstanding amount that had remained was AUD $9 million (Asgarkhani et al. 2017). Due to
lack of skills based on team leadership, there was inadequate form of planning and testing of the
system during the process of development.
4. Early Delivery Method for the Project
A broad examination of the delivery method, which were being used for the Queensland
Health project helps in understanding the early delivery methods that were used for the proper

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designing of the payroll system (Walker 2017). A holistic approach was used for understanding
the focus of the stakeholders that were used for creating an influence over the outcome created
by the implementation of the Payroll Information Systems (IS). The impact of the delivery
methods of the project would be considered as highly critical in nature for gaining the proper
outputs (McNeill 2015). In the case of the QHS, the early delivery method that was used was
based on the shared service centre approach, which had formed a major impact towards the
implementing the payroll project.
5. Changes during Recent Delivery Method
In relation to the concerned project based on designing a new form of payroll system for
Queensland Health, the primary requirements were to ensure that the payroll system would be
able to manage the employee information such as leave entitlements and allowances, roster
information, which would need to be provided by the QLD Health payroll staff (Lekh 2015). The
Queensland Government had been in the process of establishing Corp Tech, which is considered
as a shared service entity comprising a form of government-supported approach that was
performed based on an information technology supported infrastructure.
The IBM Company had required to replace the existing form of QLD Health payroll
system based on implementing the Department of Housing model supported by SAP HR. Corp
Tech had provided approval over the initial phases of scoping and planning based on replacing
the existing payroll system known as LATTICE.
During the delivery of the project, the certain factors that should be considered for the
successful outcomes are a certain form of well-defined business requirements that would need to
be communicated to the IBM. The project managers and other teams working over the project

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should align with the project management methodology (Dora and Dubey 2015). In
consideration to the current outcomes being requested by Queensland Health Department, the
SDLC approach would be used for defining the new process of project delivery and gaining
successful outcomes.
In consideration of the SDLC approach, the initial phase would be considered as
planning. In this phase, the initial idea would be discussed by the state officials at Queensland
Health and the officials at IBM. Resource availability would also be discussed in this phase. In
the second phase, the analysis would be done over the acquired requirements (Karim et al. 2016).
In the third phase of the business, the system designers would perform a brief planning over the
design of the system.
After the design of the system, development of the system would be performed
accordingly as per the requirements of the project. Alignment with the methodology of project
management would need to be maintained accordingly based on bringing in proper outcomes
towards the end of the project (Thite and Sandhu 2014). In the final phase of the project, ongoing
vendor management would be performed by the business planners. Periodic planning and review
over the key stages of the project would also be need to be performed based on which the project
would mark its completion.
6. Recommendations for Project Manager towards the Project
In consideration to the failed case of the project based on designing a new payroll system,
it would be recommended that the project would need to maintain a clear form of planning
approach and project management skills. The prime recommendation that would be supported
for the improvement for the current outcomes as expected for the project would be based on

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implementing the System Development Life Cycle (SDLC) approach. In relation to the case
outlined for the Queensland Health, different critical issues based on low user involvement,
technical project management and integrated form of communication with stakeholders were
considered as the prime concern leading towards the failure rate of the project.
Based on the adoption of the capabilities supported by SDLC approach, the key factors
that discussed above would be considered during planning over the project. The agile methods
that would be implemented for SDLC have certain form of distinct advantages over improving
the technical factors affecting the project. Hence, from the understanding of the case and the
recommendations supported, it can be discussed that successful application of each of the
controls would be considered as greatly helpful for gaining the maximum benefits from the
project and leading them towards success.

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References
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the management of large scale IT projects. In International Working Conference on Transfer and
Diffusion of IT (pp. 224-244). Springer, Cham.
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9QHS AND ITS PAYROLL SYSTEM PROJECT FAILURE
Lekh, R., 2015, March. Exhaustive study of SDLC phases and their best praxctices to create
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