OSPRI has apologised to farmers and its shareholders after major flaws were found in a technology upgrade project.
An independent review of its Information Systems Strategic Programme (ISSP) identified issues with the technology project that was meant to integrate its animal disease management and traceability systems.
The review identified problems in every aspect of the programme, including the way it was governed and the suitability of the technology itself.
Chair Dr Paul Reynolds said OSPRI had let itself and its stakeholders down.
“The OSPRI board and management apologise to farmers and partner organisations that the improvements promised have not been delivered in a timely manner.”
Reynolds stressed that this issue did not impact OSPRI’s current disease management and animal tracing systems.
“There is no risk to the assurances needed for export purposes and our shareholders can be assured that with their continued participation, our warning systems are as good as any in the world.”
Early progress on developing the new platform went well, but Reynolds said delays and cost concerns raised the alarm.
“The board was asking questions and receiving assurances and it put in independent reviewers to check on progress and to ask the question, ‘Is it reasonable for us to assume that this platform is going to be delivered on time or within the new timeframe, and is going to be successful?’
“And we received those assurances. However, delays continued and our former chief executive was increasingly uncomfortable and in the end the board decided that we would pause the program.”
Reynolds said the independent review made it clear that the project would not deliver what was required.
“Most importantly, and catastrophically, [the review found] issues with the complexity of the technology, platforms and architecture. It became increasingly apparent that what ultimately was going to be built was just going to be ruinously expensive to run.
“So we had issues about the complexity of the platform, issues in the program, about its timely delivery. But even if all that was swept away, we came to the understanding that the costs of running it would be ridiculously high.”
In a joint statement, shareholders Beef + Lamb NZ, Deer Industry NZ and DairyNZ said they were incredibly disappointed with OSPRI’s performance.
“We are working with the OSPRI board and recently appointed chief executive to take urgent steps to get this project back on track. Shareholders have added representatives to the OSPRI board’s ISSP sub-committee to ensure additional expertise is available to recommend the way forward.”
The OSPRI shareholders, in consultation with the Ministry for Primary Industries (MPI), have also initiated an independent review of the OSPRI governance framework.
“The review has made a number of recommendations for strengthening OSPRI’s governance and shareholder oversight. The shareholders are discussing the governance recommendations with OSPRI and OSPRI’s other funder, MPI, and have committed to all involved that changes will be made promptly over the next few months.”
Reynolds said he acknowledged the criticism.
“I think that in hindsight, the business case could have been clearer, more robust, more fulsome. I think the level of clarity around what was needed was probably not there.”
OSPRI is now working to fix key programme management foundations, is simplifying the new platform’s architecture and prioritising the replacement of the NAIT system, Reynolds said.
“OSPRI is confident that the measures implemented in response to the review will enable us to deliver a NAIT replacement system that meets the needs of New Zealand’s primary sector.”
There will be a significant impairment to the value of the current MyOSPRI asset, but the figure is yet to be confirmed.
Chief executive Sam McIvor said as well as the independent review, he is taking a “deep dive” into the technology in the business.
“We’ve pulled in some expertise to do that and I guess that will give us the clear path on whether we fix what’s been built, or is it an alternative route, for example, of starting again. We’re deep into that process at the moment.”
McIvor stressed that the development of the new NAIT system user interface, created in collaboration with farmers, has progressed well and will be used.
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