Auditor slams Customs' IT management

The federal government's official auditor has slammed the Australian Customs Service for the disastrous implementation of its Cargo Management Re-engineering (CMR) project, pointing the finger at bad IT management.

The imports facet of the Integrated Cargo System (ICS) -- an application developed under the CMR project -- went live in October 2005, replacing an existing solution that served users such as freight forwarders and importers for more than 20 years. But technical problems with ICS caused cargo backlogs at some ports.

"The management framework that Customs had in place to support this project lacked many of the basic fundamentals necessary to successfully implement a large ICT project," the Australian National Audit Office (ANAO) wrote in a report released late today.

"The outcomes to be achieved, and the expected benefits from the project were never clearly defined."

The report added that Customs had no overall project or financial management plan for CMR, along with no budget and no proper assessment of the potential risks. "There was also a lack of supporting documentation surrounding contractual arrangements."

The auditor also found Customs had no coordinated strategy for the implementation, and no adequate business continuity planning in place. And there was not sufficient time allowed to test the new applications.

Vendors involved with the project -- CA, IBM, Cybertrust and EDS -- largely escaped the auditor's wrath.

Spiralling costs
The report found the cost of the CMR project rose abominably over the project's lifetime.

"In 1999, Customs estimated the project would cost AU$30 million. The total reported cost of the CMR project as at the end of February 2006 was AU$205 million," the auditor found. "Between February and June 2006, Customs made additional payments of AU$7.7 million for further developments and support."

In a statement issued late today, Customs chief executive Michael Carmody said his organisation had accepted a number of recommendations made by the auditor towards improving shortcomings in the CMR project.

"The ANAO report is consistent with the report by consultants Booz Allen Hamilton which Customs commissioned early last year. In response to that report, Customs acknowledged the failings in the way it went about implementing ICS," Carmody said.

He claimed that Customs and local industry had established a "strong and open relationship" focused on the co-design of a future trade facilitation program.

He added steps were ongoing to realise ICS's full potential benefits.

Carmody concluded by noting close to AU$1.5 million had been paid in compensation to parties who faced difficulties during the botched implementation.