Defence signs $95.5 million contract with IBM to lead billion-dollar IT project


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The Department of Defence has signed a $95.5 million contract with computing giant IBM, for the “initial design” of a massive new administrative computer system.

The department wants a new enterprise resource planning (ERP) system that it can begin using for finance reporting from next year, with “logistics and land materiel maintenance functions” coming online some time in 2022.

That is only the first “tranche” of the project to build a massive replacement ERP system, described as an “an essential enabler of the Defence reform agenda outlined in the First Principles Review” in a statement today.

“The IBM contract will see the provision of system integrator services to deliver the Design phase of Tranche 1 of the capability,” Defence announced.

“It will also cover the high-level design for subsequent ERP Tranches and set the foundation elements for finance and human resources.”

According to iTNews, IBM and Accenture were both shortlisted for the lead role in getting the ball rolling on the project, which has been brewing for well over three years.

As Australian Defence Magazine reports, the overall aim is to replace the very outdated Military Integrated Logistics Information System amid concerns about the dwindling availability of support to maintain the software that sits behind it.

ADM reported the software maker would cease providing support after 2020, but MILIS would remain in place for several years beyond that, until it is replaced by the new system based on SAP software. “There are a number of service providers with experience supporting legacy systems that Defence will draw on to ensure MILIS is sustained until it is decommissioned,” the department told reporter Katherine Ziesing, but other sources told her this was a risky proposition.

It’s a similar project to the Welfare Payments Infrastructure Transformation being undertaken over multiple years by the Department of Human Services to replace another large legacy system. These are the two biggest IT projects going in the Australian Public Service; both are expected to cost well over $1 billion in total.

“The program will progressively deliver solutions that will affect every Defence member and transform the way Defence does business,” the department said today.

“It will provide a near real-time view of critical information across Defence to better inform decision making.

“ERP will modernise, integrate and transform Defence’s approach to managing its finances, human resources, logistics, engineering, maintenance and estate.”

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