A Contrarian view on Novopay

A reader emails about Novopay:

Having observed the Novopay debacle over the last few months I have been dismayed by the lack of cold hard facts that would enable us to make an informed decision on this. Sure Parata has not handled it well but is the Novopay system actually that bad. The press has not told us what error rates are acceptable, what Novopay are achieving or what Datacom did before them. In frustration I did a quick bit of research online can came up with the following.

From two separate US studies I found an acceptable payroll error rate of 1.8%-2% is standard. Lets use 2% as it makes the maths easier. To be fair to Novopay we should probably use 3-4% in their first 6 months.

[Table 22 & 23 are relevant. Table 23 has the 1.8%.?Table 22 actually shows around 95% first time error free which is really a 5% error rate.]

I have heard various figures for total number of staff being paid each period from 85,000 to 95,000. TV3 says 92,000. lets use 90,000, again it makes the maths easier.

According to various news reports ( and Hipkins) 581 people were paid who shouldn’t have been, 7899 people underpaid or not paid at all and 6000 overpaid, all from August to November. Thats 4 months or as I believe school staff are paid fortnightly 8 pay periods.

So lets do the maths. 8 pay periods at 90,000 transactions per period is 720,000 pay transactions. If you add up Hipkin’s errors count they total 14,480.

14,480 into 720,000 is 2.011%. Pretty much on industry standard.

Actual number of people underpaid or not paid (the important figure really) is 7899 or 1.097%.

And all of this in the first 4 months of a new system. Doesn’t sound that bad really.

Cheers from Rusty

Your readers can draw their own conclusions as to the motivation for the outcry by teachers, unions, Labour , Greens and the press.

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