Some random thoughts about Auckland’s IT debacle

The more I think about Auckland’s IT debacle the angrier I get.

Let’s put some perspective on?the?more than $1 billion spend.

Total amount blown by?the?Auckland Council on IT =?$1.24 billion. There is no revenue to the Council for that spend: it is gone, with more bills to continue. No profit either…just ongoing massive sunk costs.

In contrast the market capitalisation of a company like Xero is $2.03 billion, and they have revenue…$70.1 million in 2014 and $123.9 million in 2015.

New Zealand’s largest IT company is Datacom.

New Zealand head-quartered and owned information and technology organisation Datacom Group Ltd is pleased to report a strong year of progress and substantial lift in profit for the year ending 31 March 2014.

The total Group profit before tax totalled $64.7m compared to last year?s $50.9m, an increase of 27%.? Operating profit before gains on assets divested was in line with last year, with overall revenue up by 1.3% from $870m to $881m.

Datacom Group Chairman Craig Boyce says, ?We?re pleased to report an excellent performance.? Overall the Group maintained a 10-year compound annual growth rate of 12.5% for revenue and 11% for profit; this result demonstrates the sound strategic direction of the company and the long-term financial stability of the Datacom Group.?

[…] ??

Revenue for Datacom New Zealand rose by 12% to $466m for the year; this was achieved through growth in the core service lines of software development, IT management and data centres across all locations.

Those are?last year?s figures, but they could have had all 3700+ people of Datacom?working for the?council?and still have some change left over.

As you can see the Auckland Council has spent $1.2 billion of ratepayers’ money and achieved nothing. There are no savings, no earnings and no profit.

What exactly have we got other than lining the pockets of some consulting companies and software companies?

Hell, with that much cash we could have built a new Datacom or EDS, or even a new Telecom, and at least earned something for it.

I can’t believe the super-smart Vic Crone couldn’t see this, she’s a whizz at business….instead she just wants some heads to roll.

“This is a shambles,” Ms Crone said. “With over $1.2 billion wasted and nothing to show for it, the lack of leadership, oversight, transparency, discipline, and expertise is staggering.”

She added: “Having worked in the IT and communications sector in senior management positions during my 20 years in business, I have never seen such gross negligence at all levels of project management, and heads must roll.”

Note she said worked in…none of her capital has ever been risked. Sales, commissions and shuffling paper are her skills. Phil Goff isn’t much better.

Another mayoral candidate, Labour MP Phil Goff, said the spend was huge and there clearly needed to be better political oversight and explanation for the blowout in costs.

“My constant experience of IT projects in Government is if you try to create a greenfields system, you get into trouble, whereas if you buy off a shelf … you are in a much safer place,” Mr Goff said.

It is a complete balls-up. Len Brown should be crawling on his knees over broken glass begging our forgiveness…his lack of oversight as to what has been happening on his watch…he’s been the only Mayor…hard to blame anyone else. It’s astonishing. The CEO should be rinsed as well. Surely these people should have been reporting to him.

We need a clean out at council, both politically and in management.


– NZ Herald