A $15 million digital upgrade at Tasman District Council is delivering savings, but not at the scale some had hoped.
The Digital Innovation Programme (DIP) is a 10-year project that intends to modernise the council’s information services by improving resilience, reducing risk, and building a strong digital foundation for the council’s systems.
Its total budget was up to $21.6 million, with about $15.5 million having been spent to date.
Current estimates put the annual cost savings at about $658,000 with an additional annual cost avoidance of $795,000, resulting in a total financial benefit of just over $1.45 million per year.
Further spend of around $6 million is envisioned to uplift customer, human resource, finance, data, and automation systems to provide further benefits to the council.
Tasman’s elected members were briefed on the DIP on Thursday morning.
Councillor Dean McNamara recalled pushing for a digital transformation before the council embarked on the project, but said the report “doesn’t read well”.
The report highlights difficulties in quantifying the DIP’s benefits, with tracking largely subjective, project managers struggling to grasp the importance of tracking the benefits, and poor traceability.
“We should be able to reduce staff if we’re spending tens of millions of dollars going forward… I find it hard to support that kind of spend without seeing some rationalisation somewhere in the business,” McNamara said.
Councillor Mark Greening referenced annual time savings for staff searching for specific documents, saying the quantified benefits were “not that meaningful”.
“I don’t think 8 hours a year is really going to justify a $15 million investment.”
Councillors Kit Maling and Paul Morgan also voiced their expectations that they would want to see clear operational benefits from the project in the future.
Staff said the council now had a modern digital foundation that provided vital risk benefits and could be used to achieve additional future savings.
Chief operating officer Steve Manners said council “would still be somewhat in the Dark Ages” if it had “not invested up front in the way that we have with our platform and our approaches”.
An independent review of the DIP found it was in line with other public and private digital transformation projects, and that the project was largely delivering on its goals.
DIP programme manager Chris Blythe said moving to the cloud had made the council more resilient.
“Things like major earthquakes – people can get online anywhere more easily now, our data is protected, and it’s really hard to put numbers on that.
He highlighted the estimated losses of over $40 million after the 2021 Waikato DHB cyber-attack which took out its information technology and phone services for 6 weeks and had a 9-month tail of impact.
While the programme had not resulted in a reduced level of staffing, it had slowed the pace of staff growth, and allowed them to transition to “high-value work”, Manners said.
Now that the DIP had established a solid digital foundation, future investments would be focused on projects that delivered the best value for money, he added.
Even if no further investment was made, savings were expected to continue to grow over time, though the project was never expected to completely recoup its costs.
