GST Implementation Project

Phase 1 Project Review

Report for the GST Planning and Coordination Group

Prepared by: Richard Lette GST Implementation Project Manager 16 January 2000

1. Introduction The GST Implementation Project Business Plan specifies a number of project review points, the first of these being at the end of Phase 1 – Scoping and Planning. The purpose of these review points is to provide the Project Team and the Steering Committee with the opportunity to: review progress and the current status of the Project against the Project Business Plan; assess the implications of any deviations or other factors; and determine what changes to the Project Business Plan and other aspects of the Project may be required. The reviews focus on four key areas: the Project Plan; staff resourcing, budget; and risk. The intention is to ensure that the Steering Committee is provided with sufficient information to make informed decisions to ensure that the desired project outcome is achieved. This document details the outcomes of a review for Phase 1 of the Project. The review was undertaken and documented by the Project Manager. A draft of the document was provided to the Project and Quality Management Advisor for the Project for comment and subsequently amended based on this feedback. 2. Summary of Outcomes • A number of elements of Phase 1 were not completed, or only partially completed, and

will need to be completed as part of Phase 2 or included in Phase 3 activities. • The completion date for Phase 2 should be extended until 28 January to ensure that there

is time to properly assess identified issues and that sufficient information is available to fully proceed to Phase 3.

• Progress in Phase 1 was affected by staff resource constraints within the Project Team

and in Divisions. • With the commencement of the GST Financial Analyst in mid-late January Project Team

staffing should be sufficient. However, Divisions need to ensure that adequate resources are devoted to the project.

• The budget for the Project Team is considered to be adequate. • No changes to risks or risk management strategies appear to be required at this time, but

greater attention to risk management is required in Stages 2 and 3.

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3. Progress and Current Status 3.1 Project Plan – Process, Tasks and Outputs The Project officially commenced on 13 October 1999 with the approval of Version 1 of the Project Business Plan, although basic ground work including planning, development of project documentation and filling of positions had been underway since the beginning of September 1999. As noted in Project Reports provided to the Steering Committee, the work program was initially impacted by other commitments of project team members, and delays and disruptions associated with collocating members and establishing necessary facilities. There was also a delay in the commencement of arrangements with the GST Adviser but this was relatively minor compared to other factors. Progress in Phase 1 was also affected by the need to respond to requests from the Department of Treasury and Finance and, to a lesser extent, involvement in the work of the AHMAC GST Working Party. While the extent of these external requirements was not anticipated when developing the Project Plan, the work that has been undertaken will generally contribute to later phases of the Project. Despite the problems which have been encountered during Phase 1, the majority of key tasks were completed either on schedule or in a manner which allowed the key output for Phase 1, the Scoping and Planning Report, to be completed within the required timeframe. A Milestone History Report, tabled at the last Steering Committee meeting is provided at Attachment 1. This report monitors changes in scheduled completion dates for key elements of the Project. In the case of the attached report, changes at the process level (as opposed to the lower task level) are identified (the change indicated in the current report reflects the delay in establishing a project site on the Department’s intranet). The status of individual project tasks in the approved project plan summary is provided at Attachment 2 (completed tasks have been shaded) As can be seen in Attachment 2, the timeframe for some individual tasks and associated sub-outputs slipped. This slippage was largely due to: the need for more issues workshops than planned and difficulties in convening them (Task 5.11); delays in compiling information and issues (Tasks 5.7, 5.8 and 5.10); and the need to have the GST Adviser undertake a review of systems and processes due to the lack of this information across the Department - although further work on scoping system changes is required in Phase 2 (refer Task 5.7). Problems with the issues workshop process may have been compounded to some extent by the deferral of initial project and GST awareness sessions originally planned for mid-late October due to project team resourcing constraints (Task 1.5). These sessions, albeit reduced in duration, were subsequently incorporated into the issues workshops. While not an ideal solution, the format of the workshops was generally well received. Furthermore, combining the two sessions avoided possible duplication and “burnout” by participants.

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The delay in establishing a project site on the Department’s intranet (Task 1.6) was due to the need to focus effort on higher priority activities. It is now expected to be completed by 28 January. The delay should not have any material affect on the desired project outcome. Similarly, deferring promotion of the GST Help Desk to Community Sector Organsiations and other suppliers, probably until late January or early February, (refer Task 1.4) has avoided resources being diverted. It will also allow more time to clarify policy and procedural issues before having to respond to queries. Completion of the register of reviewable contracts (Task 5.10) slipped due to the large number of contracts which needed to be identified and examined and the lack of resources made available within Divisions for the task. The register and major planned procurement will be examined and necessary changes to procurement plans and contractual arrangements will be identified and implemented in Phase 3 as a discrete sub-project. During the issues workshops it became evident that a much more detailed account of supply transactions was required in order to determine appropriate GST treatments for goods and services produced by the Department (refer Task 5.8). It was found that this information was not readily available within Divisions. Consequently, it was necessary to initiate a survey to identify all relevant transactions. This task was to be finalised by 24 December 1999 but is now expected to be completed by 14 January. Due to the Project Manager’s involvement in more immediate operational activities and the absence on leave of the Project and Quality Management Advisor, one task that has been delayed considerably is finalisation of the Project Execution Plan (Task 5.4). While the lack of this detailed plan has not been a significant problem to date it does leave the project exposed to a range of risks, particularly the loss or extended absence of the Project Manager or other Team members. 3.2 Staff Resourcing The Project Business Plan identifies a core Project Team of 4 full-time positions – the Project Manager, a Financial and Business Analyst, a Communications and Training Consultant and an Administrative Officer. The establishment of a further position of Budget Analyst (later re-titled “Financial Analyst”, with the Financial and Business Analyst position being re-titled “Business Analyst”) was agreed but is yet to be filled. The other commitments of some team members during the initial part of Phase 1, absences on leave and due to illness, and the delay in filling the Financial Analyst position created resource constraints. Consequently, the Project Manager had to devote more time to operational tasks and less to planning, co-ordination and risk management activities, such as finalisation of the detailed Project Execution Plan. There has also been greater reliance on the GST Adviser, as well as the need for assistance from the Finance and Facilities Branch. Furthermore, during the course of Phase 1 there were several changes of GST Business Manager in most Divisions and, generally, GST Business Managers have been unable to devote sufficient time to project related tasks due to other competing priorities. This has affected progress with some project tasks to some extent. Nevertheless, the Project would not have proceeded as well as it has to date without the contributions which have been made by the GST Business Managers and their support staff.

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3.3 Budget From information available from the finance system and GST Business Managers, it does not appear that Divisions have incurred any GST related costs to date. Correct details on expenditure on the project team are still not available due to miscoding or incorrect entry of salaries and most non-salary expenditure by HR and, possibly, Finance. Journals are being prepared for salary and related expenditure and the problem with non-salary expenditure is being investigated. A correct account of expenditure year to date will hopefully be available soon. Nevertheless, there is nothing to indicate that the Project Team is not currently operating within budget. Non-salary expenditure has largely been within expectations, with the exception of consulting fees. As noted above, due to staff resource limitations within the Project Team it has been necessary to make greater use of the GST Adviser than envisaged. However, this additional cost (approximately $5,000) will be offset by the delay in filling the GST Financial Analyst position. 3.4 Risks The risk management plan developed at the beginning of Stage 1 appears to have been quite comprehensive and relatively effective in the management of risks to date. However, as noted above, time available to the Project Manager for risk management has been limited. The major risks that are being manifested are insufficient effort and resources in Divisions and instability of membership in the GST Planning and Co-ordination Group. Both problems have been managed as actively as possible and the impacts in Phase 1 have not been significant. 4 Consequences for Subsequent Phases 4.1 Project Plan – Processes, Tasks and Resources Slippage in Stage 1 was addressed by focussing effort on those elements of the work plan which were most critical to the Scoping and Planning Report, with the intention that remaining elements will be extended for completion as part of Phase 2 or included in Phase 3 activities. However, overall, more detailed information has been obtained from Phase 1 than planned and work has already commenced on addressing a range of issues, which will help expedite subsequent phases of the Project. Conversely though, as a result of the number of issues that need to be addressed and the lack of existing information on systems, processes, and contracts and other transactions, it will be necessary and prudent to extend Phase 2 until the end of January. Phase 2 will provide the blueprint for what changes are required to be made in Phase 3 in terms of specific tasks and sub-projects. In relation to the later, the intention is not to have the groups prepare fully developed sub-project plans, but rather to define the nature of the

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sub-project in terms of an outline and who will be responsible - the task in Phase 3 is for those given the responsibility to then develop the sub-projects to the extent required and implement the necessary changes. Therefore, to ensure the effective use of resources, it is important that the deliverables from Phase 2 are soundly based and clear. Completion of the detailed Project Execution Plan needs to be a high priority for the Project Manager in the New Year, perhaps at the expense of more operational requirements. The Project and Quality Management Advisor agrees that this is necessary. 4.2 Staff Resourcing Despite two members being on leave at the beginning of January, Project Team staffing numbers should be sufficient with the commencement of the GST Financial Analyst in mid-late January. However, until that time greater use will continue to have to be made of the GST Adviser and, possibly, the Finance and Facilities Branch. While there have been delays in completing project tasks in Phase 1 due to changes in GST Business Managers and their other commitments, what is of more concern is to ensure that Divisional arrangements now settle down and that adequate resources are devoted to the project by Divisions. There is a significant risk that Divisions will not fully appreciated this need until too late. In the absence of proper resourcing of the project by Divisions, there will be a need to consider increasing resourcing of the Project Team (directly or through use of the GST Advisor), with the costs perhaps funded directly by the Divisions. Risks associated with Divisional effort and resourcing. and stability in arrangements for GST Business Managers are identified in the Project Management Plan and the associated management strategies are in place. The countermeasure for lack of effort by Divisions has been implemented through discussion with the Agency Executive Committee prior to Christmas and the release of a memorandum to Directors by the Project Sponsor this week. This communication has highlighted the problems of resourcing and commitment in Divisions and requested Directors to actively address them. It is too early to assess the response, but early signs are encouraging in some Divisions. 4.3 Budget At this stage it is anticipated that the approved project budget will be sufficient for the GST Implementation Project Team to undertake its required role. As noted above, there has been a need to utilise the services of the GST Adviser to a greater extent than envisaged during Phase 1 due to project staffing constraints and this may be the case in subsequent Phases. However, it should be possible to offset any such additional costs (possibly up to $10,000 to $15,000) through savings in other areas of the budget, particularly salaries and related expenses. As noted above, from information available from the finance system and GST Business Managers, it does not appear that Divisions have incurred any GST related costs, nor have

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they established project budgets of their own. Divisions will incur costs as a result of staff resourcing, obtaining profession advice and assistance, provision of specific training and systems modification or replacement. 4.4 Risks While the manifestation of risks has had limited impact to date, as the project progresses the nature of risks will change and the level of risk exposure will generally increase due to the relatively short and inflexible timeframe available. It is, therefore, critical that greater emphasis be placed on risk analysis, assessment and management during Phases 2 and 3. 5 Proposed Action Based on the above assessment, the following action was approved by the Steering Committee:

• No “help desk” or enquiries line be established for suppliers and community

sector organisations. A range of standard answers to a range of likely questions is to be prepared by the Project Team and distributed to staff as part of the Communications and Training Plan.

• Extending the date for the establishment of the project site on DHHS Online

until 28 January in light of current staff absences. • Extending the date for completion of the detailed Project Execution Plan until

21 January to allow time for consultation with Project Team members. • A more detailed examination of information systems be undertaken as part of

Phase 2, to be completed by 28 January. • Extending the completion of the supply transaction survey until 14 January with

analysis of the results to be completed by 28 January as part of Phase 2 of the Project.

• Extending the completion date for Phase 2 – Specify Changes until 28 January.

It is important to note that while it is necessary to extend Phase 2, this does not mean that the remainder of the Project will be behind schedule by one month compared to the original plan. As noted in Section 2.1, some of the work undertaken in Phase 1 of the project will generally contribute to work that would have needed to be undertaken in Phases 2 and 3, including resolution of policy, definitional and other technical issues.

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Furthermore, upgrading of Finance One is a key and time critical sub-project. Work on the identification of, and planning for, necessary modifications to ensure GST compliance of the Finance One system and associated elements of the Department’s Statewide Financial System (SFS), is well underway by the vendor and the SFS project team. Consequently, it is anticipated that necessary modifications to the SFS will not be affected by the need to extend Phase 2. Other elements of the GST Implementation Project should be able to be accommodated within the reduced timeframe for Phase 3. This concurrent staging of processes and tasks between phases of the Project will need to be continued within the broad framework provided by the Project Plan as more issues are identified and addressed during the course of the Project. While no changes to risks or risk management strategies appear to be required at this time, it is intended that a more detailed review and assessment of risks be undertaken in association with the GST Planning and Co-ordination Group in the next few weeks.

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Attachment 1

DHHS GSTIP Milestone History Monitor

03/09/9917/09/9901/10/9915/10/9929/10/9912/11/9926/11/9910/12/9924/12/9907/01/0021/01/0004/02/0018/02/0003/03/0017/03/0031/03/0014/04/0028/04/0012/05/0026/05/0009/06/0023/06/0007/07/0021/07/0004/08/0018/08/0001/09/0015/09/0029/09/0013/10/0027/10/0010/11/0024/11/0008/12/00

03/09

/9901

/10/99

29/10

/9926

/11/99

24/12

/9921

/01/00

18/02

/0017

/03/00

14/04

/0012

/05/00

09/06

/0007

/07/00

04/08

/0001

/09/00

29/09

/0027

/10/00

Review Date

Review outcomes & monitorcompliance/managementImplement changes and other responses

Develop implementation plans

Scope & assess impact of GST on DHHS inputs& outputsEngage external GST Technical Advisor

Establish Steering Committee

Establish Project Team and infrastructure

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Attachment 2

Phase 1 – Scoping and Planning

Process

1. Establish Project Team and project infrastructure

Key Tasks Scheduled Start

Scheduled Finish

Status

1.1 Develop and obtain Steering Committee sign-off for Business Plan

1/9/99 13/10/99 Completed on schedule.

1.2 Create positions, advertise, select and appoint Project Team members.

6/9/99 29/10/99 Core project team positions filled by late September. Financial Analyst position created and advertised. Anticipate position will be filled in January.

1.3 Establish project office and facilities. 9/9/99 30/9/99 Basic set-up completed on schedule.

1.4 Establish and promote GST help desk arrangements for staff, clients and suppliers, including community sector organisations

6/10/99 15/10/99 Help desk established and promoted internally and to key CSO reps on schedule. Promotion to CSOs and other suppliers to be deferred as per Communications and Training Plan.

1.5 Arrange and undertake initial project and GST awareness sessions for staff

15/10/99 29/10/99 Initial sessions deferred due to resourcing constraints and undertaken in conjunction with issues workshops between 4/11-2/12. Further sessions to be arranged in accordance with Communications and Training Plan.

1.6 Establish project site on DHHSOnline 25/10/99 17/11/99 Work underway. Expected completion date 28 January.

Process

2. Establish steering committee

Key Tasks Scheduled Start

Scheduled Finish

Status

2.1 Invite and confirm members 13/9/99 17/9/99 Completed on schedule.

2.2 Arrange inaugural meeting 17/9/99 29/9/99 Completed on schedule.

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Process

3. Engage External Technical Adviser

Key Tasks Scheduled Start

Scheduled Finish

Status

3.1 Prepare Request for Proposals and distribute/advertise

10/9/99 18/9/99 Completed on schedule.

3.2 Evaluate proposals 4/10/99 6/10/99 Completed on schedule.

3.3 Seek endorsement and appoint adviser 7/10/99 11/10/99 Completed 15/10.

Process

4. Establish GST Planning and Co-ordination Group

Key Tasks Scheduled Start

Scheduled Finish

Status

4.1 Invite and confirm members 1/10/99 12/10/99 Completed on schedule

4.2 Arrange inaugural meeting 14/10/99 28/10/99 Completed on schedule

Process

5. Scope and assess impact of GST on Department’s inputs and outputs

Key Tasks Scheduled Start

Scheduled Finish

Status

5.1 Undertake preliminary impact assessment using existing information sources and prepare report for steering committee.

20/9/99 15/10/99 Document finalised and distributed to Steering Committee members and initial issues workshop participants on 3/11/99.

5.2 Develop communications and training strategy

13/10/99 29/10/99 Strategy completed 5/11 and signed off by Steering Committee on 10/11. Detailed planning underway.

5.3 Undertake detailed project execution planning with GST Adviser

18/10/99 3/11/99 Initial planning with GST Adviser completed on schedule

5.4 Prepare detailed project execution plan 25/10/99 3/11/99 Comments on draft PEP received from Project and Quality Management Advisor. Expected completion date 7 January 2000.

5.5 Arrange issues workshops 25/10/99 29/10/99 Completed on schedule.

5.6 Compile details of expenditure and revenue for financial analysis

1/11/99 12/11/99 Completed 30/11.

5.7 Identify and obtain information on receipting, invoicing and accounting systems

1/11/99 19/11/99 Initial survey completed by Deloitte 29/11. Further work required in Phase 2.

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5.8 Identify and obtain information on financial transactions relating to specific inputs and outputs

4/11/99 19/11/99 Initial transaction details compiled on schedule. Transaction survey commenced 3/12 to address lower level details and irregular transactions. Expected completion date of 14/1/00.

5.9 Identify and obtain information on pricing mechanisms and associated legislation

8/11/99 19/11/99 Pricing issues addressed and legislative mechanisms being examined by Treasury. Task completed on schedule.

5.10 Develop register of existing contracts and obtain details of major planned procurement during transitional period

3/11/99 19/11/99 Register completed 24/12. Register and major planned procurement to be examined in Phase 3.

5.11 Undertake issues workshops 4/11/99 12/11/99 16 issues workshops held between 4/11 and 19/11. Final workshop completed on 2/12.

5.12 Compile, analyse and assess workshop outcomes and other information in association with GST Adviser

15/11/99 3/12/99 Completed on schedule, except as noted above.

5.13 Prepare scoping and planning* – Project Milestone/Review Point

6/12/99 10/12/99 Report completed 10/12 as scheduled. Refinements incorporated in Version 2.

Phase 2 – Specify Changes

Process

6. Develop implementation plans

Key Tasks Scheduled Start

Scheduled Finish

Status

6.1 Undertake initial briefings with GST Planning and Coordination Group and other Divisional staff on planning process

22/11/99 26/11/99 Written briefing distributed to GST Business Managers for distribution within Divisions on 3/12. Meeting to discuss held on 8/12.

6.2 In association with GST Business Managers evaluate outcomes of scoping and planning report.

10/12/99 17/12/99 Workshop held on 17/12.

6.3 Develop Divisional and whole of agency implementation plans in association with GST Business Managers and Steering Committee* – Project Milestone/Review Point

10/12/99 24/12/99 Underway.

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Stage 3 - Build and Implement

Process

7. Implement changes and other responses

Key Tasks Scheduled Start

Scheduled Finish

Status

7.1 As defined in implementation plans. 4/1/99 2/6/00 No yet commenced

7.2 Monitor and review progress with business owners and project managers*

4/1/99 2/6/00 Not yet commenced.

Phase 4 – Monitoring and Review

Process

8. Review outcomes and monitor compliance/management

Key Tasks Scheduled Start

Scheduled Finish

Status

8.1 Review each element of implementation plans and confirm successful completion – Project Milestone/Review Point

22/5/00 30/6/00 Not yet commenced.

8.2 Establish compliance/management monitoring program, including:

• lodgement of GST returns • cashflows • documentation and record keeping

1/7/00 29/9/00 Not yet commenced.

8.3 Undertake necessary corrective action 1/7/00 29/9/00 Not yet commenced.

8.4 Undertake further training for staff on key issues

6/8/00 30/8/00 Not yet commenced.

8.5 Undertake post implementation review and prepare report for steering committee – Project Milestone

11/9/00 29/9/00 Not yet commenced.

Phase 5 – Maintenance

Process

9. Handover on-going responsibilities to business owners

Key Tasks Scheduled Start

Scheduled Finish

Status

9.1 Ensure that residual project responsibilities and outcomes of post implementation review are properly resolved and allocated as required*

2/10/00 13/10/00 Not yet commenced.

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