MBIE takes a $22M hit from early retirement of software

MBIE takes a $22M hit from early retirement of software

Microsoft contracted to support the replacement of key immigration technology system.

The Ministry of Business Innovation and Employment is Immigration NZ's parent agency.

The Ministry of Business Innovation and Employment is Immigration NZ's parent agency.

Credit: Google

The Ministry of Business, Innovation and Employment (MBIE) has sucked up a $22 million depreciation expense from sending its immigration global management system (IGMS) into early retirement.

The ministry's annual report revealed depreciation, amortisation and impairment costs had risen by $36 million to $90 million in the year to June, largely due to the accelerated amortisation and impairment of Immigration New Zealand's current visa processing system.

This is now being replaced by the new advanced digital employer-led processing and targeting (Adept) visa processing systems, initiated to help simplify immigration processes for employers and immigrants. 

Because Adept is expected to be completed in the coming year, the useful life of systems being replaced were reviewed, and accelerated to be recognised in the current financial year.

In 2012, Immigration New Zealand launched a business transformation called the Vision 2015 Programme, which aimed to reorganise where and how visa services were delivered through upgrading the ICT system used to process visas.

An investment of $75 million had been green-lighted by immigration minister Jonathan Coleman the year before to replace 15 year old software. In the end, the Vision 2015 package cost $119.3 million.

By the time of its conclusion six months late in June 2016, Immigration New Zealand delivered all capabilities outlined in the IGMS and Vision 2015 business cases except one, a 2017 report from the Auditor-General said. The core visa processing system was not fully replaced as planned because Immigration NZ decided to keep and maintain parts of it "for the foreseeable future". 

The project was also roiled by disagreements about the scope of the project between Immigration NZ and system provider Datacom.

As for Adept, commercial negotiations with Microsoft to support the implementation were completed and a contract executed on 7 September, 2020. The first stage of the Adept roll out was scheduled for August 2021.

Reseller News has enquired about the project's timeline and budget.

"This project will establish a new ICT platform and associated business practices which make visa processing more efficient and automate a number of steps in the visa process," a report to the incoming minister said last November.

The ministry's annual report also noted a $1.4 million impairment of a system called WIP that is also no longer viable with the introduction of Adept.

MBIE's IT costs overall are increasing quickly. $142.9 million was spent on ICT in 2021, up from $94.3 million in 2017. Overall, the ministry spent $1.1 billion during the 2021 financial year, $164 million more than in 2020. This was mainly due to costs related to managed isolation quarantine (MIQ) operational support during the COVID-19 pandemic, including personnel and security costs. 

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