Super SA

In reply to the Hon. S.C. MULLIGHAN (Lee) (24 July 2019). (Estimates Committee B)

The Hon. R.I. LUCAS (Treasurer): I have been advised the following:

The supplier of the Bluedoor administration platform is SS&C Technologies (formerly DST Systems, who were purchased by SS&C Technologies in 2018).

In December 2015, the former Labor government approved the Minister for Finance (minister Koutsantonis) to enter into a contract with DST Systems for a total value of up to $24.32 million (GST inclusive) for the provision of the Bluedoor solution for a period of 12 years.

The total expenditure incurred with SS&C Technologies over the implementation phase, from 1 February 2016 to the closure of the project on 31 December 2018, totalled $12.9 million.

In addition, Super SA's costs over this period of implementation totalled $10.7 million, resulting in a total implementation cost of $23.6 million.

The supplier costs to implement the system included the analysis, design, development and configuration of the software over 3 years, with a dedicated team of SS&C staff allocated to the project during this period. The amount also includes $1.5 million as an annual fee for an ongoing production statement of work as allowed for in the contract. An annual licence fee of $600,000 is also payable.

The bulk of the membership, being those in the accumulation schemes (Triple S, FRP, Select, and Income Stream) were transferred over to Bluedoor as part of phase 1 of the project on 7 May 2018. This was significantly later than the initial estimated implementation date of 1 April 2017.

Phase 2 of the project (the transition of the defined benefit membership) was originally scheduled for November 2017. In December 2018 the Super SA Board made the decision to abandon phase 2 of the project, with the defined benefit membership continuing to be administered on an upgraded version of the existing Bravura platform.

The Bluedoor project evolved from the licensing of an off-the-shelf software application with limited customisation into more of a bespoke build, which was evidenced by numerous project change requests. This added significantly to the project's complexity, cost and timeframe.

Complexity was exacerbated by a lack of project expertise both within Super SA and the vendor, and this compromised the ability to communicate clear project requirements. Compounding this industry experience deficit, Super SA also experienced significant staff turnover since commencing the project, including the departure of the general manager of Super SA, the project sponsor (twice replaced), the project manager (twice replaced) and numerous other project staff.

There were indications of project delays and cost overruns in November 2017 when the Chair of the Super SA Board wrote to the Chief Executive, Department of Treasury and Finance, advising him that the board had committed extra funding from its reserves to finance additional expenditure required to deliver the project.

At the time, the board advised the chief executive that overall project costs had increased by approximately $7.3 million, taking the implementation cost to $22 million. The board also advised that it had committed funding to maintain the project until the expected completion of phase 1 at end of March 2018, and that it had requested a review of the business case for phase 2 of the project.

A variation agreement (new contract) was signed on 26 May 2019 to amend the previous terms and conditions of the contract, primarily to reflect the Super SA Board's decision not to proceed with phase 2 of the project. Super SA have recently finalised negotiations with SS&C Technologies for the annual production support agreement for 2020, which provides Super SA with greater flexibility to prioritise system enhancements that drive efficiencies from the platform.