Background

In the year 2010 of March, the Queensland Health implemented its first stage of planned two-stage implementation of the new rostering and payroll solution. The state agency that is the CorpTech was responsible for management and the contractor for delivery was IBM Australia (Day, Harrison and Halpin 2012). The outcome was a failure in many aspects, there was delay in delivery by two years, an over budget, incorrect payments to the employees and performance issues. In the year 2002, the Queensland government had established the ‘Shared Services Initiative’.

The purpose was to amalgamate and rationalize the services of the government across many departments and agencies that had been applied overseas to public sector with success (Glass 2013). The government wanted a higher standard of corporate service functions and a low cost to it by reduction of the acquisition, licensing and the information and technology workforce. This was done by the centralizing the IT management and operations, simplifying systems and business processes that can be reused by government agencies and departments, and adopting a uniform set of business applications and common set of computer technology platform.

The Queensland government had fifteen payroll systems in thirteen government departments from the LATTICE package, TSS, SAO and Aurion. Queensland Health covered 15 regional districts. The shared services and various payroll district hubs manage the payroll system. The LATTICE is used for payroll and ESP Kronos for rostering.  The payroll solution was to integrate to the Queensland Health enterprise the financial and asset management, decision support system and the HR systems. This payroll system was uniquely complex in nature. There was inaccurate payroll payments and defective functionality.

The report is show the projects negotiation and conflict report, which is a communication tool. This tool is used as the basis for management negotiation, identifying conflict areas and stakeholder engagement. In the year 2002, the Queensland government had established the ‘Shared Services Initiative’.

The Queensland Health went live with the new payroll system had two interfacing systems Workbrain and SAP and these have experienced significant and ongoing challenges within the system. Yet in 2005  three years after the progressive rollout was completed, Queensland Health received notification from the LATTICE system vendor, Talent2, which their existing LATTICE system was becoming obsolete and was no longer going to be supported, with services and updates ceasing on 30 June 2008 (Thite and Sandhu 2014).

In order for Queensland Health to pay their employees, the disparate payroll system, LATTICE and ESP (Environment for Scheduling Personnel) rostering engine, was utilized. However, the LATTICE solution required a substantial amount of manual interventions to accommodate the complex award and incentive structures evident within Queensland Health.

Payroll System Complexity

 The QH employs approximately 85,000 staff across a range of professional occupations. Among them, many worked for 24 hours, seven day a week. The staffs were employed under the two Acts that were impacted by six different industrial agreements that created 20 allowances.

For Project 2 the negotiating position and conflicts in relationships of the participants of this project are described below.

The Queensland Government received a system from the IBM, which was faulty, and over priced in nature. Legal advice was provided to terminate the contract and pursue for damage control, but the State opted for a negotiation settlement.  The government did not analyse or examine the risks in the contract. Thus apart from financial and societal implications associated with Queensland Health implementation failure, the failure has also had national, industry wide ramifications.

Due to the Queensland Health’s disastrous payroll implementation project, the government radically improved their ICT strategy and governance procedures. Both client and consultant organizations are more cautious throughout recent ICT projects due to the increase in compliance, which leads to project delays, and increased project costs (Eden and Sedera 2014).

The negotiators should have been aware that the blind attachment to the winning all from the negotiation without satisfying the other parties could be a poor long-term strategy. This may lead to the other side lose their will or ability to maintain their side of negotiated agreement (Hill, Jones and Schilling 2014).

CorpTech became the technology service provider for the whole-of-government. Its first Executive Director was Mr Geoffrey Waite. CorpTech had two roles. One was to provide specialist information and communication technology advice and services in the areas of financial transactions and human resources for all government departments. The other was to design and implement financial transaction and payroll systems as part of the SS Initiative. Its failure, attended by enormous cost, damage to government and impact on workforce, may be the most spectacular example of all the unsuccessful attempts to impose a uniform solution on a highly complicated and individualised agency.

The negotiating method recommended is the strategic and tactics. The system did not perform adequately with terrible consequences for the employees of QH and equally serious financial consequences for the State. After many months of anguished activity during which employees of Queensland Health endured hardship and uncertainty, a functioning payroll system was developed, but it is very costly (Duffield and Whitty 2015)

Due to the Queensland Health’s disastrous payroll implementation project, the government radically improved their ICT strategy and governance procedures. Both client and consultant organizations are more cautious throughout recent ICT projects due to the increase in compliance, which leads to project delays, and increased project costs

Negotiation and Conflict Report

The funding envelope for QH payroll currently includes the  funded and unfunded components with significant proportion of these components representing ‘committed’ expenditure based on the current system requirements and need to invest in the ongoing improvements to maintain and improve system performance. 

Stakeholders would benefit from the greater visibility of the funding shortfall between what has been committed versus what has received funding allocations to assist with determining the priority for future spend and value for money assessments.

Apart from financial and societal implications associated with Queensland Health implementation failure, the failure has also had national, industry wide ramifications.

The negotiating position recommended should be according to the structural approach. The negotiators should have been aware that the blind attachment to the winning all from the negotiation without satisfying the other parties could be a poor long-term strategy. This may lead to the other side lose their will or ability to maintain their side of negotiated agreement (Hill, Jones and Schilling 2014).

The negotiating position recommended should be strategic approach. A specific plan or strategy to obtain the desired result should have been created by the QH. The negotiators should have alternatives to maximize the gains that are the payoffs. The strategic models applied were normative in nature. There needs to be the best solution applied from all the perspectives of the negotiation through the critical risk theory and game theory (Booth, Sutton and Papaioannou 2016). The negotiators face challenges during the decision-making, as they do not have incomplete information about the intentions of the other negotiator.

The negotiating position recommended should be the behavioural approach. The personality of the negotiator is also necessary band this determines the course and outcome of the negotiated agreements. The art of persuasion and motivation by the QH and the government should have looked into the skills, expectations and attitude of the people involved. The concession exchange approach can also be applied. The concession exchange approach if applied has certain risks. The participants engaged in the negotiation process tend to miss the opportunity to find new solutions that are beneficial for the process. Both sides in this regressive process tend to have fewer gains if the concession exchange approach is used (Brown, Gordon and Rose 2012).

The negotiating position recommended should be integrative approach. If the integrative approach is used as a negotiation process then there can be mutual gains for both sides. There is importance of the exchange of information that is important between the IBM and the QH organization. The negotiators have to create value and develop the shared principles for the decision making process of claiming the outputs.

Impact of Implementation Failure

For Project 1 the negotiating method recommended that should be applied is of strategies and tactics. A careful plan or method is used with the means to use the available skills to reach a successful solution (Grosser 2013). There is a distributive understanding of the negotiations. The pre-suppositions are that there is a zero-sum transaction.

For Project 2, the negotiating method for the government and decision-making is the distributive bargaining where the use of threat of force to wrestle concessions from the opponent. The position of the government should be higher than the realistic estimate to be achieved. The tactics used in distributive bargaining are intended to help those who claim value for themselves while defending against the efforts of an opponent.

For Project 3, the negotiating method recommended is the strategic and tactics. The system did not perform adequately with terrible consequences for the employees of QH and equally serious financial consequences for the State. After many months of anguished activity during which employees of Queensland Health endured hardship and uncertainty, a functioning payroll system was developed, but it is very costly (Duffield and Whitty 2015).

For Project 4 the negotiating method recommended should be Structural, strategic and process oriented approaches to negotiation tend to share a distributive understanding of negotiations. The costs forecast to date reflect only the work to analyse the current systems prior to a decision being made as to the system to implement. The costs identified by Queensland Health include an amount of FBT payable on the overpayment loans. The costs are based on the current operating model for QH and do not take account of proposed changes.

The preferred form of procurement as an outcome from the negotiation process for Project 1 is the traditional segregated design and delivery procurement. The bidding process of the payroll system should be cheapest or the quickest (Roehrich and Caldwell 2012). There is a fixed time and a fixed-timed tender. Extensive system testing is a factor that is statically proven to be related to implementation success, where the more extensive the testing the greater the success of the implementation.

The preferred form of procurement as an outcome from the negotiation process for Project 2 is the Focus on Integrated Design and Delivery Procurement Arrangements—Emphasizing Planning and Control. For new programs and projects within the Payroll Portfolio, consideration should be given to deploying the robust approach of the Payroll Portfolio relating to governance frameworks, documentation, planning and quality management (Vetschera, Filzmoser and Mitterhofer 2014). 

The preferred form of procurement as an outcome from the negotiation process for Project 3 and 4 is Focus on Integrated Project Teams—Emphasizing Collaboration and Coordination. There is a clear need to demonstrate to line managers and staff what the benefits of specific improvements to the payroll and rostering processes will be from their perspectives as end-users (Rauniar and Rawski 2012).

The funding envelope for QH payroll currently includes funded and unfunded components with the significant proportion of these components representing ‘committed’ expenditure based on the current system requirements and need to invest in ongoing improvements to maintain and improve system performance.  Stakeholders would benefit from greater visibility of the funding shortfall between what has been committed versus what has received funding allocations to assist with determining the priority for future spend and value for money assessments.

References

Booth, A., Sutton, A. and Papaioannou, D., 2016. Systematic approaches to a successful literature review. Sage.

Brown, D.R., Gordon, R. and Rose, D.M., 2012. The BGR contingency model for leading change. International Journal of Learning and Change, 6(1-2), pp.66-78.

Day, D.V., Harrison, M.M. and Halpin, S.M., 2012. An integrative approach to leader development: Connecting adult development, identity, and expertise. Routledge.

Duffield, S. and Whitty, S.J., 2015. Developing a systemic lessons learned knowledge model for organisational learning through projects. International journal of project management, 33(2), pp.311-324.

Eden, R. and Sedera, D., 2014. The largest admitted IT project failure in the Southern Hemisphere: a teaching case. In Proceedings of the 35th International Conference on Information Systems: Building a Better World Through Information Systems. AISeL.

Glass, R.L., 2013. The Queensland Health Payroll Debacle. Information Systems Management, 30(1), pp.89-90.

Grosser, M., 2013. Legal lessons from the Queensland health payroll report. Government News, 33(5), p.20.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Rauniar, R. and Rawski, G., 2012. Organizational structuring and project team structuring in integrated product development project. International Journal of Production Economics, 135(2), pp.939-952.

Roehrich, J.K. and Caldwell, N.D., 2012. Delivering integrated solutions in the public sector: The unbundling paradox. Industrial Marketing Management, 41(6), pp.995-1007.

Thite, M. and Sandhu, K., 2014. Where is My Pay? Critical Success Factors of a Payroll System–A System Life Cycle Approach. Australasian Journal of Information Systems, 18(2).

Vetschera, R., Filzmoser, M. and Mitterhofer, R., 2014. An analytical approach to offer generation in concession-based negotiation processes. Group Decision and Negotiation, 23(1), pp.71-99.