The hardest part of welfare payment reform will be getting staff on board, said Human Services Deputy Secretary John Murphy at the GovInnovate summit yesterday (Tuesday).

DHS is spearheading a massive shake up of the way it processes benefit payments, embarking on an ICT overhaul courtesy of the Welfare Payments Infrastructure Transformation, WPIT for short.

The government will drop around $1.5 billion over seven years replacing the creaky Centrelink payment system, which was built in 1984.   

But Mr Murphy said replacing the technology was likely to be “the easiest part of the journey” and that the biggest challenge of the change program would be engaging and winning over the Department’s 35,000 staff and effecting the great leap forward culturally.

“Given enough time and money the technology is the area that we would be the most confident about,” he added.

The Deputy Secretary is right to be nervous. On Tuesday DHS staff voted down a new enterprise bargaining agreement for the third time, this time by 74 per cent.

The long-running dispute over pay and the proposed dilution of working rights and conditions will not play well for the government, which will have to push through transformative change in the face of flagging morale, resignations and further strikes.

Mr Murphy said that while the legacy ICT system still worked it was coming under increasing pressure, which would only intensify. WIPIT represented a “complete reimagining” of the processes behind welfare payments for the past 30 years.

The statistics would give anyone pause for thought.

In the 1980s DHS delivered $10 billion in welfare payments to 2.5 million people each year. Now the same system delivers $100 billion in payments to some 7.3 million people each year. Payments are projected to hit almost $191.9 billion in 2019-20.

“Like most things, I’m sure the architects of the original system couldn’t quite envisage the amount of change and growth the platform would need to support,” he said. “The platform is not broken per se but we do recognise that it is not going to be able to do what we want it to do over the next 20 years.”

Welfare payments is a vast and complex system that has been built up over decades. There are 30 million lines of code, for example, and 40 different core payments with 38 add-ons.

The ecosystem also includes looking at the volume and nature of phone calls to DHS and how they are dealt with, visits to shopfronts, as well as online interactions through the website and mobile apps.

Mr Murphy said he wants to avoid specialist staff fielding calls about answers that could be supplied automatically, for example, on the progress of individual benefit claims.

“We want them [DHS staff] to spend more time talking to welfare recipients about their needs rather than answering questions [such as]: ‘I lodged my claim three weeks ago. When will it be processed? A lot of calls are very routine. I want to focus the efforts of those people on helping people who are the most in need.”

The vision is to have omnichannel, straight-through processing with better real-time data and analysis. It involves the capture and multiple reuse of data from many sources, such as the ATO or education and training providers, so that clients only have to provide information once.

For example, DHS could use the information universities hold on enrolled students so that the student would not have to contact the Department about starting courses or changing course hours.

Mr Murphy said the focus would also be on individuals and how they communicate with the Department when their circumstances change.

“We are very much looking to adopt the philosophy [that] we’ll play back information to welfare recipients and ask them to confirm it, rather than [having] many, many forms, questions and definitions of incomes.

“It is incredibly difficult for citizens to understand what they’re entitled to and what information to tell the department. We want to make it easier for people to understand what they’re entitled to and tell them straight away that they’re not eligible.”

At the moment, he said the system was clunky when it needed to respond to policy changes which affected welfare payments, “It is challenging to implement them. Even relatively simple changes take six to 12 months. In anybody’s language, that is not a sustainable position.”

There is no doubt on the side of all of the main political parties – or the public – that reforming the payments system is a challenge that has to be taken on, given the exponential rise in claims and long-running problems faced by DHS with calls going unanswered, apps not performing and websites crashing.

Progress so far

The changes will be delivered in five tranches and began in July 2015. It will finish in 2022. Suppliers will compete for a piece of the action in each tranche. It is an iterative process designed to be rolled out piece by piece while keeping the current system going.

“We need to provide the services that we do today at the same time that we’re looking to redefine, reimagine and transform both delivery of welfare and the technology,” Mr Murphy said.

Planning, scoping and design, alongside appointing key commercial partners has been the focus of the first stage. SAP has been chosen as the preferred core software vendor and they will co-design and build and new system.

It has been an interesting, quite progressive procurement process so far. Last year, the government asked ICT firms to come up with ideas on designing a new system. They also talked to welfare recipients about how it could work.

Meanwhile Capgemini and Accenture are currently duking it out to secure the lucrative systems integration contract for the first tranche. In a ‘try before you buy’ scenario both consultancies have been asked to outline how they would tackle the work and to demonstrate their partnering potential with SAP.

There will also be a panel of “top ranking firms”, which could include the firm that comes in second place, who will be asked to bid for the other project stages. Panel members could be engaged to supply services around data migration, systems integration and other support services.

Mr Murphy said DHS was also likely to engage bespoke specialist change management firms: “It’s a very large program of work. We feel like we are well set up now to move into the delivery phase.”

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