Novopay latest - Datacom working on spec

The government has now shelled out $11 million on school compensation ($6 million) and a top-up for Novopay developer Talent2 ($5 million).

How much has it spent on the backup solution being developed by previous teacher payroll provider Datacom?

Not a bean.

"Payment hasn't been discussed, but it will be discussed," a spokesman for Steven Joyce's office told NBR Online.

Payment may never be made. A former high-ranking manager says it is likely Datacom is working on "Plan B" for free - a reflection of the company's philosophy, but also in the knowledge that not charging the Crown at this point could be the best path to ultimately regaining the massive payroll contract lost to Novopay.

"Datacom has a massively strong 'do the right thing' ethos," former staffer Ben Gracewood tells NBR.

"I'd not be at all surprised if their what-if remediation work is gratis."

He adds, "You could also look at it as a sales opportunity with benefits."

Doing free work on Plan B was "No worse than piling money into a big RFP [request for proposal] response." It probably gave Datacom a greater chance of winning.

Datacom refused comment, although a spokeswoman says it will shortly break its silence.

(Mr Gracewood, who now works for Marker Metro, was a principal architect at Datacom, but not involved with its payroll business.)

One hungry, one whining
But certainly there's a marked difference in attitude between the two companies. Datacom, majority-owned by reclusive NBR Rich Lister John Holdsworth, seems hungry to win back the teacher payroll contract. By contrast, in one of his few interviews, Talent2 boss John Rawlinson whined to NBR that his company was losing money on Novopay.

The technical report released earlier this week said Novopay could be stabilised, but only if Novopay and the Ministry of Education lifted their game. It noted around 500 software bugs remained, and that although error rates had dropped to around 1%, there was a backlog of 19,000 transactions. The backlog had been particularly debilitating.

Mr Joyce says the backlog was caused not just by Novopay software glitches, but a lack of experienced staff (ironically, when the goverment originally evaluated proposals from Talent2, Novopay and third contender EDS, the Australian-based Talent2's "Ability to recruit pay clerks for New Zealand payroll centres" was identified as a key risk factor; see table below or NBR's original article on Novopay documents released under OIA here).

The minister has also made the broader point yesterday that the education system payroll - which allows for around 10,000 pay permutations - is far too complicated. A good point - but one that should have been made three years ago, and that neither Novopay or Datacom can fix.

Mr Joyce says he will make a decision on whether to persist with Novopay, or revert to Datacom, in six to eight weeks.

Click to enlarge:

Click to enlarge.

ckeall@nbr.co.nz