ICS Press Reports
ICS Press Reports
R2 is the second phase of implementation and is designed specifically for the export industry and is slated to become
opertational on March 1 2004.
Former CMR developer EDS was unceremoniously dumped two years ago and replaced by a consortium headed by
Computer Associates after failing to reach the first stage of a developmental release. At the time it was dumped, EDS
had spent five years developing the project.
The documents obtained by Computerworld show the anger of users who are clearly fed up with what they feel is a mix
of vendor and government incompetence in supplying a software interface that they will be compelled by Customs to use
to conduct their business activities. CMR users include ports, stevedores, airlines, freight brokers, logistics firms and
trucking lines, all of whom are compelled to interface with the system to do business.
“…Customs have foisted on us processes that have not been tested internally and are not of a standard that could even
be regarded as an alpha test. Most of the work we in industry are undertaking now involves debugging Customs systems
not - as we would reasonably expect - familiarising ourselves with CMR and fine tuning our applications to comply with it”
And:
“The professional credentials of Customs and the contractors including [vendor name omitted] and the [vendor name
omitted] consortium is being challenged and damaged by the terrible state of this system. We would recommend it be
removed from production until such time as Customs train and resource its staff with the necessary skills and the
contractors complete the obviously terribly poorly executed task of developing release 2”
And:
http://www.computerworld.com.au/index.php/id;289380586;fp;;fpid;;pf;1 27/08/2008
Computerworld - Exporters revolt over Customs software Page 2 of 2
“We…suggest that to minimise costs, industry (the users not just the developers) should be made aware of the true
position as soon as possible and a revised testing period start date agreed with Customs as and when their systems are
sufficiently tested and debugged for this to begin in earnest”
And:
“The current ICS release is many, many times worse than...any first release of any prior Customs EDI system…Customs
has been good developer of EDI systems …[vendor name omitted] its consortium partners and [vendor name omitted]
are tragically bad at developing software or at least Customs systems.”
And:
"Customs gives the impression that testing is available and has been since August, with their revised go live date of 1
March. But in reality we have not even begun serious testing and hopefully this may be in October. This is a slippage of
another 2 months, and cuts down the development window. Is Customs looking at revising their cut[-]over dates, when
they do get the test system available for testing?”
“We currently have no confidence in the EDI message responses received from ICS. To all intents and purposes, the test
system is NOT operational for our requirements. Until the test system can consistently respond in accordance to
published specifications, we cannot confirm our application is correctly meeting CMR business rules.”
Other complaints reveal user problems with the systems messaging protocol including variations of message response
time between five minutes and two hours and "going beyond mere syntax checking into the realm of cross data
validation".
Users contacted by Computerworld said that the current Customs offering was so bad that it should be suspended
immediately.
"You can't expect us to test if our systems work with it if they can't even get theirs to work. They need to get it into their
heads it doesn't work".
Neither departmental or ministerial spokespeople for Customs were able to respond to a list of questions provided by
Computerworld on Friday afternoon, but said they would respond in due course.
Copyright 2008 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or
medium without express written permission of IDG Communications is prohibited.
IDG Sites: PC World | GoodGearGuide | Australian GamePro | CIO Australia | CSO Online | LinuxWorld.com.au | Techworld |
ARN | CIO Executive Council
http://www.computerworld.com.au/index.php/id;289380586;fp;;fpid;;pf;1 27/08/2008
Computerworld - Customs cargo system delayed again Page 1 of 2
The Australian Customs Service will again hold over again the
introduction of its controversial Integrated Cargo System (ICS)
and will move imminently to amend binding legislation in
Parliament that would have seen IT vendors severely punished
if the project failed to meet its "go live" deadline of Juy 21 2004.
ICS is a cornerstone of Customs' massive Cargo Management Re-engineering (CMR) project. This was intended to
replace the export and brokerage industry-developed EDI system Customs Connect with a Web-based model co-
developed by Customs and a consortium of IT vendors led by Computer Associates. The project aims to facilitate all
aspects of Customs involvement in the import and export process including declarations and GST transactions collected
at port.
Further releases of ICS beta code to industry from Customs were halted after a dossier of serious user complaints about
the quality and stability of ICS code to Customs was published in Computerworld on October 6. Since then, Customs has
ordered its consortium of outsourced developers to stabilise the current release of ICS R2 (export transactions) system
before releasing any further ICS code to industry.
The delay is certain to impact the ICS R3 (import transactions) system release to industry while code glitches,
dysfunctional business rules and PKI certificate issues are resolved. While the release of the export system code has
been far from painless, users and Customs concur that the import side of the ICS is a vastly more complex undertaking -
with far greater risks and consequences should it fall over.
Trading and transport industry insiders are hailing the delay of the ICS as a victory for commonsense, arguing any further
attempts to force unfinished code onto users would have created a software disaster area with the potential to bring
international trade with Australia to an unceremonious halt.
Managing director of Eagle Datamation International (EDI), Richard White, whose software firm has been forced to
endure a series of half-baked ICS releases from Customs, is one developer not shedding any tears.
"It's been frustrating getting an adequate deployment strategy, and deployment is where this thing [has the potential] to
fail. You can deliver technology and get it right on the day, but you have to do an awful lot of background work with
training, regression and acceptance testing, getting users to move from their test platforms to production platforms. It's an
enormous undertaking. It has to be done in series, it just can't be done in parallel," White told Computerworld.
"[The delay] gives Customs, developers and end users the flexibility to take up the system and get it right - rather than
http://www.computerworld.com.au/index.php/id;957631137;fp;;fpid;;pf;1 26/08/2008
Computerworld - Customs cargo system delayed again Page 2 of 2
being forced into a big-bang release which would almost certainly cause service delivery failures. It's a very positive
development," White said.
Veteran software developer for a range of ICS clients, Geoff Phillips said that Customs had to re-learn how to
communicate with those cutting code in the industries ICS will service, adding that every delay increased the cost burden
that developers were forced to carry.
Sources within airlines and shipping companies were also clearly relieved Customs is to allow some breathing space,
saying any stated delay was vastly preferable to "toughing it out on the fly".
"[Customs] has known internally for a while they've been trying stare down an iceberg. It's just bloody semantics as to
when they called it an iceberg. It's always been pretty obvious either the go-live date would change - or it would change
the minister. This stuff has the potential to make the wharfies dispute look like a tea party," the source said.
EDI's Richard White hopes that eventually, all the pain will pay-off.
"You can't deliver software for user acceptance tests when you haven’t got it working yourself. No one should
underestimate the enormous quantum of this change from the imports side. Imports is where everyone is scared witless.
CMR, particularly the imports declaration system - once it is implemented smoothly, will be of enormous benefit.
"There are improvements in the supply chain that will be substantial. It will never be nice, because it's one of those
horrible change processes and it's hard for people to cope with because people have been working with a stable system
for 25 years. Business process re-engineering around CMR is dramatically large," White said.
Copyright 2008 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or
medium without express written permission of IDG Communications is prohibited.
IDG Sites: PC World | GoodGearGuide | Australian GamePro | CIO Australia | CSO Online | LinuxWorld.com.au | Techworld |
ARN | CIO Executive Council
http://www.computerworld.com.au/index.php/id;957631137;fp;;fpid;;pf;1 26/08/2008
Computerworld - Customs system bail-out to cost $43 million Page 1 of 2
Responding to questions from Customs Shadow Mark Bishop, Woodward submitted there had been “a number of
pressures in a number of areas in relation to the build of the integrated computer system,” along with the “the Customs
Connect Facility (CCF), the connection facility that will enable outside connection using either EDI or interactive methods”
to connect to Customs’ declarations system. Woodward said the final amount of the shortfall was not yet known.
Woodward said that according to interim figures “total pressures” amounted to a spend of $35 million for ICS code
cutting, another $20 million for connectivity courtesy of the CCF and, “while the CMR project continues” the need to
maintain “the old Unisys mainframe” costing $1.25 million per month – or $15 million for the “full year”.
Asked how deep ICS had sunk Customs into red ink, Woodward said, “The costs of the ICS and CCF are a significant
contribution to our being over-extended,” and that the $43 million figure was not so much “an over-run, but an [interim]
cash injection”.
The committee heard legislation has already been passed to allow Customs to pass on the cost of ICS to industry users
in the form of an import declaration processing charge.
ICS chief Jenny Peachey told the hearing that a “major contract variation” between the IT vendors hired to develop ICS
for Customs had impacted the project to the tune of around $15.4 million dollars, especially as the project was
“completing”.
Peachey said the last stage of ICS development (known as R4 or imports declarations) had experienced a slippage of
“19 days”, adding that for the “final part, all the code is cut now for the ICS development. It’s in product test that final part”
– nominating the end of April or early May 2004 as the nominated date for the “rollout”.
The May code release date is at variance with earlier statements from Customs that code cutting would not be rushed to
meet over-ambitious deadlines.
ICS development was ceded to a consortium led by Computer Associates, IBM and a number of other subcontracted
http://www.computerworld.com.au/index.php/id;492331357;fp;;fpid;;pf;1 27/08/2008
Computerworld - Customs system bail-out to cost $43 million Page 2 of 2
firms including Kaz Computing after being stripped from EDS in 2002.
Visibly frustrated with the frequently complex answers of successive commonwealth officers, Customs Shadow Mark
Bishop labelled some of the evidence tendered before the hearing as “the biggest load of rubbish I have heard in my
entire life”.
More about IBM, EDS, CA, Unisys, ACS, Australian Customs Service
Copyright 2008 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or
medium without express written permission of IDG Communications is prohibited.
IDG Sites: PC World | GoodGearGuide | Australian GamePro | CIO Australia | CSO Online | LinuxWorld.com.au | Techworld |
ARN | CIO Executive Council
http://www.computerworld.com.au/index.php/id;492331357;fp;;fpid;;pf;1 27/08/2008
Computerworld - Transport heavies choke on Customs system upgrade, ready or not Page 1 of 2
It is only six weeks before ICS goes live on October 6 and the
number of "high priority" transactional bugs plaguing ICS has
skyrocketed over the last month.
Disturbingly, the documents also reveal Australia's largest transport companies, which move around 80 percent of
exports leaving Australia, are having the most trouble getting their transactions through ICS.
Systems from Qantas, Patrick Corporation, and Patrick and P&O Ports' joint venture 1-Stop, account for more than half
the current high-priority incident list - with other transport companies - including FedEx, DHL and OOCL - citing testing
anomalies.
1-Stop project manager for integration (Australian Customs Cargo Management Re-engineering) Ruth Thompson said
the short run-up time between the October 6 cut-over deadline and the ICS system being available for reliable testing
was still causing problems for users.
"We will have to do it in six weeks because six weeks is all we have. If [cargo] sits on the docks [because ICS doesn't
function properly] Customs will have to take some responsibility for that," Thompson said.
Apart from ICS still not performing as required under transaction-volume load testing, Thompson said end users, such as
ports and stevedores, faced the additional challenge of learning how to use a largely unfamiliar system "at the terminal
gate".
The matter is further compounded because Customs will soon issue each consignment of outbound cargo a "load
status" (or clearance to load) from the terminal gate, whereas outbound manifests have to date been reconciled, after
loading, between exporter, shipper and Customs. If system users cannot obtain a Customs "load status", freight cannot
be legally loaded, leading to the likelihood of substantial bottlenecks. Qantas corporate affairs was unable to comment
before print deadline.
A spokesman for Customs Minister Chris Ellison said the agency had received no correspondence from customers
asking for an extension of the ICS testing period, adding Customs had worked "very closely with industry" on the ICS
rollout.
"We laid out a pretty clear timetable for ICS. We've been working very closely with industry to be sure they are ready,"
the spokesman said. Customs is still to commence testing of the imports phase of ICS, which is generally estimated to be
at least 20 times more complex than the exports phase. While the cutover date for ICS imports has been set by Customs
http://www.computerworld.com.au/index.php/id;1318167007;fp;;fpid;;pf;1 27/08/2008
Computerworld - Transport heavies choke on Customs system upgrade, ready or not Page 2 of 2
More than seven years to this point of readiness, ICS is a cornerstone of Customs' massive Cargo Management Re-
engineering (CMR) project, which will replace the export and brokerage industry-developed EDI system, Customs
Connect. CMR is a Web-based model co-developed by Customs and a consortium of IT vendors led by Computer
Associates, EDS, IBM and Telstra nee Kaz.
The project aims to facilitate all aspects of Customs involvement in the import-export process, not least the clearance of
goods leaving Australia and the collection of GST on goods entering it.
More about Telstra, Qantas, IBM, FedEx, EDS, CA, Australian Customs Service, PATRICK CORPORATION
Copyright 2008 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or
medium without express written permission of IDG Communications is prohibited.
IDG Sites: PC World | GoodGearGuide | Australian GamePro | CIO Australia | CSO Online | LinuxWorld.com.au | Techworld |
ARN | CIO Executive Council
http://www.computerworld.com.au/index.php/id;1318167007;fp;;fpid;;pf;1 27/08/2008
customs media release
Integrated Cargo System remains on track - Friday, 23rd September 2005
Australian Customs is pressing ahead with plans to switch over to its new Integrated Cargo System (ICS) for imports on 12 October, Chief
Executive Officer Lionel Woodward said today.
Mr Woodward reaffirmed Customs intention after the latest meeting in Sydney today between senior Customs executives and software
developers.
He said the developers and industry participants at today's meeting accepted that Customs and industry should continue to work towards the
cutover date of 12 October when all imports transactions will need to be conducted via the ICS.
"While the Customs Brokers and Forwarders Council of Australia again requested a further delay to the ICS timetable, this view was not
supported by other industry groups or indeed, some substantial customs brokers," Mr Woodward said.
"Based upon rigorous testing by Customs and some areas of industry - both at a functional level, and checking stress and volume levels -
Customs is not aware of any issues that would prevent the ICS from being used as planned by 12 October.
"Over the past year, Customs and industry associations have made extensive efforts to publicise the new requirements needed for the import
industry to use the ICS.
"Customs has also pulled out all the stops to help clients register and provide them with comprehensive training, information and updates," he
concluded.
Media contact:
Corporate Communication: 02 6275 6793 (24 hours)
If you have not already registered to receive advice of future media releases, register now.
Email:
Confirm Email:
Send Reset
In an e-mail sent yesterday (September 26) and ominously headed "Preparation time has run out..." Customs warns
laggards "it is absolutely critical that you contact VeriSign today to purchase your digital certificate(s)," adding that users
without PKI certificates "must start the process today if you are going to have any chance of being ready for October 12
2005".
The warnings have not impressed the Customs Brokers and Forwarders Association (CBFCA), which has been fighting
tooth and nail against the introduction of CMR, with many members standing to lose substantial parts of their business
because the new system allows importers and exporters to deal directly with Customs rather than using service
providers.
Particularly, the group has repeatedly claimed and maintains that R is unstable under load, an allegation rejected by both
Customs and a number of software developers.
Customs CEO Lionel Woodward said, "While the Customs Brokers and Forwarders Council of Australia again requested
a further delay to the ICS timetable, this view was not supported by other industry groups or indeed, some substantial
customs brokers."
Woodward described system testing by Customs industry as rigorous at function, stress and volume levels saying his
agency "is not aware of any issues that would prevent the ICS from being used as planned by 12 October".
Copyright 2008 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or
medium without express written permission of IDG Communications is prohibited.
IDG Sites: PC World | GoodGearGuide | Australian GamePro | CIO Australia | CSO Online | LinuxWorld.com.au | Techworld |
ARN | CIO Executive Council
http://www.computerworld.com.au/index.php/id;1490349825;fp;;fpid;;pf;1 26/08/2008
Customs to push new systems to dwindling audience: ZDNet Australia Mobile Page 1 of 2
However, Customs' refusal meant many importers, brokers and freight forwarders who
had been expected to attend would instead be stuck in their offices, according to the
CBFCA.
"We're looking at having less than 50 delegates at our conference due to the Customs
CMR deadline," CBFCA freight and business operations director Darryl Sharp said.
This was despite Customs' concession earlier this week of a 12 day extension to the
existing COMPILE system, used to declare imports to Customs.
The same conference in Coolum last year had attracted around 250 delegates, he said.
The problem was due to be discussed at a CBFCA board meeting in Adelaide this
afternoon.
Difficulty in implementing Customs' ICS was the reason behind many delegates' late
withdrawal, according to Sharp.
"We [Sharp's company Austin International] only got ours deployed on October 7. That's
five days before the deadline.
"And then there's no manuals, and the software's got bugs in it," he said.
Sharp said his company was currently unable to move cargo in Adelaide due to problems
with the ICS system.
"This company is being impacted around the clock, and we're being impacted still.
"The freight importing community have been marginalised. Customs have pushed ahead
for their own purposes and haven't listen to us a lot."
Sharp criticised Customs officials for being aware of the state of the industry but refusing
to acknowledge it.
"I had senior Customs officials ringing me on my mobile on Friday afternoon to see
http://m.zdnet.com.au/139216930.htm 27/08/2008
Customs to push new systems to dwindling audience: ZDNet Australia Mobile Page 2 of 2
RELATED ARTICLES
Customs solves ethnic name identification headache
EDS contract stifled Customs
TALKBACK
Add your opinion
computer associates
Anonymous -- 08/11/2005
Search:
All
Submit
0 Home
1 News
2 Blogs
3 Reviews
http://m.zdnet.com.au/139216930.htm 27/08/2008
Customs blames users in IT debacle: News - Communications - ZDNet Australia Page 1 of 2
To print: Select File and then Print from your browser's menu
--------------------------------------------------------------
This story was printed from ZDNet Australia.
--------------------------------------------------------------
The federal government has opted to keep using a controversial new cargo reporting system, and
has attacked users for contributing to delays at some ports.
The Integrated Cargo System (ICS) replaced one that had been operating for more than 20 years but
since October 12, problems in the system have caused massive delays to container clearances,
resulting in a backlog of cargo at some ports. Common users of the application include freight forwarders
and customs brokers.
Australian Federation of International Forwarders chief executive officer Brian Lovell issued an update
this afternoon saying the Australian Customs Service had told him that the ICS for sea and air cargo
would be left intact until at least midweek.
Customs Minister Senator Chris Ellison's decision came amid bitter criticism of the final cutover to the
new system and reports electronic messages had been trapped for up to several hours, slowing
clearance of imports and prompting claims from one state minister key NSW ports were within a couple
of days of being forced to turn cargo-bearing ships away.
Senator Ellison is expected to chair another meeting with Customs and industry representatives on
Wednesday, Lovell said.
Late Friday afternoon, Customs confirmed the move, with a spokesperson lashing out at media reports
that said the new system had "failed".
"Nor is its performance solely responsible for the problems that have occurred.
"The problems experienced in part, flow from inaccurate and incomplete information being submitted by
some users, which the new system is designed not to accept for security reasons," the spokesperson
said.
Earlier, Lovell said Customs chief executive Lionel Woodward had told him during the call that Senator
Ellison had been "led to this decision primarily by [Customs] and the stevedores who have convinced
him that the 'workarounds' and contingencies [Customs] have put in place will alleviate the potential
blockage at the ports".
These measures included dedicated Customs teams clearing goods at the premises of terminal
operators, deployment of additional staff to support the 24-hour industry help desk and usability changes
within the Customs interactive system.
Senator Ellison's move comes after he said this morning the AU$250 million ICS system would be
http://www.zdnet.com.au/news/communications/print.htm?TYPE=story&AT=139218... 26/08/2008
Customs blames users in IT debacle: News - Communications - ZDNet Australia Page 2 of 2
switched off unless proposals to alleviate the situation were unsuccessful. "It was designed to make it
faster not slower and that's why I've said that if by midday today it isn't working, we'll revert to the old
system," he told a radio station.
Lovell said Customs had told the Minister problems which had seen some users able to view supposedly
secure documentation from other users had been "fixed".
"We will be most interested to find out from our members if this is in fact the case," he said.
In a videoconference with Senator Ellison yesterday, AFIF and other industry bodies recommended the
sea cargo component of ICS be turned off, and industry revert to the previous system.
"Speaking on behalf of the whole forwarding industry and, being mindful that some sectors are working
well, we must say that we are disappointed with this decision and the Minister's reliance that Customs
will fix the problems despite increasing contingencies to move cargo whilst the main ICS import system
remains seriously flawed," Lovell said.
http://www.zdnet.com.au/news/communications/print.htm?TYPE=story&AT=139218... 26/08/2008
Customs to persist with faulty cargo system - National - theage.com.au Page 1 of 1
http://www.theage.com.au/news/national/customs-to-persist-with-faulty-cargo-system... 27/08/2008
Cargo system backdown | Australian IT Page 1 of 2
topstory
http://www.australianit.news.com.au/story/0,24897,17022750-15306,00.html 27/08/2008
Cargo system backdown | Australian IT Page 2 of 2
http://www.australianit.news.com.au/story/0,24897,17022750-15306,00.html 27/08/2008
Computerworld - Analysis: Still nothing to declare Page 1 of 3
The department commissioned scoping studies, industry stakeholders were invited to express their fears and aspirations
and Customs officials scoured the globe examining the experience of other countries. All the right intentions to build a
robust, cost-effective, world-class system that would last for decades were there.
Most importantly, outsourcing was sold by those holding the reins of government as something that would deliver great
efficiency, flexibility and renewal of what was perceived as a stale, slow, ineffective and stubborn public service.
In the case of Customs, this meant carving up an established code shop that held the critical knowledge of how the
department's core business processes interoperated and the various technologies that made it happen and replacing it
with outsourcer EDS. Heartache has followed ever since.
When EDS became Customs' outsourcer in 1997, it inherited development responsibility for the CMR project. For five
long years, CMR and its core transactional hub, the Integrated Cargo System (ICS), sat under the outsourcing deal with
no real development. When the project failed to meet deadline in 2001, the cause was not that EDS had done a bad job
in so far as it had not done anything at all. For nearly five years the project lived in a form of vendor limbo until EDS and
Customs agreed that the project would be better served if it was re-tendered to the market. Eventually, a consortium led
by Computer Associates and including IBM and Teradata won the tender in February 2002.
While EDS was prepared to provide all of Customs business systems needs, it was clearly not well suited to developing a
highly complex, bespoke transactional system which involved considerably more resources and risk.
Nor did it want to, possibly a prudent move considering it was the arrival of EDS that saw so many specialised IT staff
leave Customs' employ.
Lesson 2: Know what you are replacing before you replace it.
A flawed assumption was made that the business process knowledge at Customs would transfer from the department to
the outsourcer. This did not happen. Decommissioned public servants went to work where they were valued the most:
http://www.computerworld.com.au/index.php/id;1794286917;fp;;fpid;;pf;1 26/08/2008
Computerworld - Analysis: Still nothing to declare Page 2 of 3
the clients of Customs to whom they had previously been providing a service.
Customs is now in the unenviable position of having some of its customers know more about how elements of its
business process works than it or its outsourcer does. Because Customs legally compels clients to interface with it, the
commercial element of choice is removed. Clients are not free to shop elsewhere and Customs cannot choose its clients,
thus creating a frequently adversarial relationship.
The transference of knowledge occurred because Customs failed to effectively assess the real market value of the
knowledge it was showing the door, or the impact it would have on both its organisation and customers. Many value
judgements were made along ideological rather than economic grounds, thus miscalculating the impact to the business.
Having missed numerous successive deadlines and blown successive budgets Customs is now under extraordinary
political pressure to deliver ICS code to industry so that clients can interface with the system. Two successive deliveries
of largely inoperable code have provoked a severe backlash from stakeholders out of pure fear that the system would be
allowed to go-live in July next year.
Grave concerns arose from developers that because broken code was being released to industry to test as operational, a
broken system would go live resulting in the Australian economy being crippled by virtue of the fact Customs would not
be able to clear import or export cargo. In an attempt to speed up outcomes, senior Customs management sacrificed
quality control on the project outputs because suppliers had most likely underestimated what they took on.
The result has been a grave erosion of confidence for both clients and suppliers. It appears likely that by attempting to
threaten punitive sanctions against the vendors struggling to build the code, a bad situation has been made worse. While
vendors can ultimately exit the project, albeit with penalties, clients of the Customs system cannot.
In a classic "David Murray" moment (where IT over-promises and under-delivers), Customs management greatly
overestimated the capacity of their suppliers to deliver and underestimated the negative impact that delivery failures
would have on their customers. Yet, despite the clear failure of vendors to deliver on time, Customs insiders say that the
department only heard what it wanted to, regardless of the reality.
A key driver of many of the problems the CMR project has faced originated because of a legislated deadline by which the
ICS system must go live. This has been moved twice, a year at a time. To add insult to injury, ICS users now face a user-
pays levy to cover the cost of budget blow outs - which have escalated from early estimates of $20 million to the $145
million revealed before then Senate Estimates this month. The introduction of a new tax to bail out what is seen as
government incompetence will be profoundly unpopular and has the potential to cause splits in the government.
The legislative deadline effectively rules out any ability to compromise and has forced clients to adhere to unrealistic
deployment timeframes. By committing early to 'cast iron' deadlines and forcing stakeholders to do the same, Customs
paints itself into a very messy corner every time the deadline is missed. Realistic rescheduling or options for flexibility
currently exist and need to be introduced.
If they are not introduced by those in charge of the project relatively soon, the stakeholders (which include supermarkets
and large retailers, manufacturers and the transport sector) will almost certainly remove those in current management the
only way left open to them - brute political force.
The alternative is the Australian economy grinding to a halt... an unlikely choice for any government.
http://www.computerworld.com.au/index.php/id;1794286917;fp;;fpid;;pf;1 26/08/2008
Cargo cult dooms project to failure - Perspectives - Opinion - Technology Page 1 of 3
This distinction was pointed out to me by Mark Toomey, who is one of Australia's few specialists
on IT governance. His company, Infonomics, publishes a newsletter on the subject, the most
recent edition of which was devoted to the fiasco that is the Australian Customs Service's new
Integrated Cargo System.
This has been one of the most public failures of IT in Australia in recent years. It is also one of
the most predictable - the deadline was continually pushed back, the budget was regularly
expanded, and warnings were repeatedly made. Mr Toomey details how Customs repeatedly
ignored the most basic rules of IT governance, virtually ensuring the project would fail.
The minister, Senator Chris Ellison, of course, takes no responsibility. He says he relied on the
advice of "IT experts", who said the thing would work.
CIO Murray Harrison has gone to ground and no longer speaks to the press or analysts. He's
even on record as saying the whole thing is a media beat-up - a familiar refrain from those who
are the subjects of adverse publicity.
Success, as they say, has a thousand fathers, but failure is an orphan. Nobody involved in the
Customs debacle is prepared to take any blame. Customs even issued a statement last month
blaming users of the system - customs agents, freight forwarders, importers and the like.
http://www.smh.com.au/news/perspectives/cargo-cult-dooms-project-to-failure/2005/... 27/08/2008
Cargo cult dooms project to failure - Perspectives - Opinion - Technology Page 2 of 3
Consider briefly the history of the project. The original tender for a new cargo handling system
was awarded to IBM and Computer Associates as software providers, and EDS as system
integrators, in 2001. The system was to be delivered by June 2003 at a cost of about $28
million. Almost immediately things began to go wrong.
In no time the cost estimate was almost doubled, to $45 million, because it was proving more
difficult than initially thought to determine the business rules behind the existing system. In
short, the project had not been properly scoped.
"A fundamental governance theme for major initiatives is to ensure that all facets of change are
planned and delivered," Mr Toomey says. "Key performance indicators should be established at
the outset."
The initial delivery time came and went, and by the end of 2003 the project was attracting
headlines for its delays and cost overruns. The estimated budget stretched out further to $100
million, and completion dates were pushed back to 2004. Federal Parliament was forced to
amend legislation mandating the system's use.
By early this year the system's cost had blown out to $250 million, nearly 10 times the original
estimate. Reports of problems with the system persisted right until it went live on October 12.
Customs insisted all was well, and was so confident that it implemented the software at the
beginning of the peak Christmas import period.
Bad idea, says Mr Toomey. "All change involves risk that something will go wrong. Wherever
possible that risk should be mitigated by scheduling the change to avoid factors such as a high
workload that could exacerbate a problem."
And problems there were. Within 24 hours imports started piling up at Australia's ports because
they could not be cleared. Sensitive data leaked from the system. Importers were losing
millions of dollars a day. Perishable goods were perishing. Before the week was out it was front-
page news and questions were being asked in parliament.
What went wrong? It is a clear failure of IT governance on many fronts, Mr Toomey believes.
There was poor project management. The project was not properly scoped. Too many
stakeholders were involved, with too little consultation, and quick fixes exacerbated problems
rather than solved them.
"Warnings of potential problems with the imports module were clearly given, more than 20
months prior to its eventual deployment," Mr Toomey says. "It was clear that the change
program was going to need intensive, ongoing, high-level focus to ensure that it went
smoothly. The governance regime should have ensured that all stakeholders were properly
represented and engaged in the process, and that all voices would be heard."
It didn't happen, and the pity of it all is that the story at Customs is not unusual. Sydney Water
lost millions on a failed billing system. RMIT University botched a new student administration
system because the system wasn't tested before it went live. All these disasters were
preventable. But as the experience of Customs indicates, people will not learn from past
mistakes. What is it about big IT projects that turns otherwise intelligent humans into
incompetent nincompoops?
http://www.smh.com.au/news/perspectives/cargo-cult-dooms-project-to-failure/2005/... 27/08/2008
Customs pays up for IT bungle: News - Software - ZDNet Australia Page 1 of 1
To print: Select File and then Print from your browser's menu
--------------------------------------------------------------
This story was printed from ZDNet Australia.
--------------------------------------------------------------
The Australian Customs Service will shell out just under AU$500,000 in compensation claims
from the botched introduction of a new IT system late last year, with more than AU$8 million
worth of other claims hanging in the balance.
In October, Customs' Integrated Cargo System (ICS) went live, replacing an existing solution that had
been serving users such as freight forwarders, importers and customs brokers for more than 20 years.
But problems with ICS caused backlogs of cargo at some ports.
Customs chief executive officer Michael Carmody said in a statement today the agency accepted ICS
had contributed to delays in clearing cargo, particularly shipping containers at seaports in Sydney,
Brisbane and Melbourne.
"Customs has therefore decided to meet storage and transport-related costs where these were the result
of a problem with the implementation of ICS that was attributable to Customs," Carmody said.
"Of the cases reviewed, we have agreed to offer compensation in full to 196 claimants and part-
compensation to 72 claimants. These amounts total AU$492,000," said Carmody.
Customs has rejected 52 claims out of the remaining 113, but claimants could still provide more
information to further their case.
However, the more pressing issue for Customs is a small number of large, more complex claims yet to
be reviewed, totalling AU$8.4 million.
"These require detailed review and discussions with these claimants," said Carmody.
Staff-related costs such as overtime, filed by importers, haven't been finalised due to the changed
government regulations in the area. "This is because it is normal for costs to be incurred in the
implementation of new regulatory requirements," the Customs chief said.
"Claimants will have to demonstrate that the particular costs claimed are directly attributable to a
problem with the ICS and above what could normally be expected."
http://www.zdnet.com.au/news/software/print.htm?TYPE=story&AT=139264888-13... 26/08/2008
Auditor slams Customs' IT management: News - Software - ZDNet Australia Page 1 of 2
To print: Select File and then Print from your browser's menu
--------------------------------------------------------------
This story was printed from ZDNet Australia.
--------------------------------------------------------------
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.
http://www.zdnet.com.au/news/software/print.htm?TYPE=story&AT=339273496-13... 26/08/2008
Auditor slams Customs' IT management: News - Software - ZDNet Australia Page 2 of 2
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.
Carmody concluded by noting close to AU$1.5 million had been paid in compensation to parties who
faced difficulties during the botched implementation.
http://www.zdnet.com.au/news/software/print.htm?TYPE=story&AT=339273496-13... 26/08/2008
FINAL REPORT
Canberra
16 May 2006
Strong program management is Following the closure of OBS, there Institute a clear business owner
required was no single business owner within and program management
Customs of the ICS project and there capability immediately to
was poor overall program manage the CMR, covering both
management business processes, industry
engagement and the systems
development
Strong budgetary control is The CMR did not have an overall Ensure a clear budget and
essential budget for its activities budget accountability in any
projects undertaken
Unclear objectives cannot be The objectives of CMR were stated Ensure that all objectives are
delivered in general terms, making it measurable for all facets of the
impossible for project initiatives to project e.g., trouble-free
focus on achieving these implementation as well as
benefits realisation
Use a formal benefits realisation
management process to ensure
benefits are achieved
Staged implementation and/or The “big bang” implementation gave All large and complex
parallel operation is essential to neither Customs nor Industry any implementations should do a
manage impacts on industry fall-back when the new system failed risk assessment of the
to function according to expectations deployment and examine
suitable strategies for mitigation.
In this case, suitable strategies
include parallel running and/or
staged implementation
Sacrificing testing to make a The ICS allowed a very limited test Manage the testing process
deadline is high risk program that allowed several defects from early in the project, making
to be introduced into the system sure that adequate time,
resources and expertise are
available
More formal quality controls with Customs did not accredit software Adopt a quality assurance
the software industry will help providers, leaving them to test program and institute a more
ensure a quality result themselves against a test rigorous testing process for
environment. Software vendors vary software vendors
widely in the quality of the software
available at implementation
User-centred design will help The Customs Interactive facility is Adopt user-centric design
prevent development of systems slow and difficult to use practices and usability testing to
with low usability ensure that the processes and
systems are as easy to use as
possible
Engage Industry in planning of Customs received feedback from Use a formal readiness
large implementations some parts of industry that readiness assessment that engages
for the ICS was low but other parts industry as well as internal
indicated that readiness was high stakeholder and tracks a
number of quality and readiness
measures
Profiles require more The profiles when first introduced Establish a management
coordinated management and created widespread “holds” on cargo process that examines the
should be designed and tested and caused severe processing impacts of the Profiles portfolio
by experts before deployment overheads. Profiles still have the Establish a testing environment
potential to create damaging effects where the effectiveness and
if not managed carefully consequences of new Profiles
can be tested
A test environment that allows The ICS implementation did not Provide a “live” test environment
industry and Customs staff to provide any testing on a “live” for the ICS
train with the “real” system and system prior to implementation. Ensure that it reflects the
transactions is vital Despite extensive investments in production environment and can
presentation-based training, this was accept real data for training
not adequate for users to become purposes
familiar with the complexities of the
system