A modernisation goal

Taking the first step towards replacing the 11-year-old IT system at NZ Customs.

An increasing flow of import and export goods and passenger movements, as well as growing global threats to security, present challenges to the NZ Customs Service. The Government has recognised the complex environment that Customs is working in and has taken the first step toward replacing the department’s massive 11-year-old IT system.

In 2007-08 Customs expects to check more than 47 million import transactions for compliance and process, more than 26.5 million export transactions. All of these transactions (electronic and handled via the internet) will be processed through the current clearance system.

The present system was dubbed CusMod (for “Customs modernisation”) when it was developed in 1996, but now requires considerable upgrading and the introduction of new capabilities.

Minister of Customs Nanaia Mahuta says the system will offer greater integration with other agencies, such as the Ministry of Justice and Inland Revenue Department.

In addition to policing the borders, the system will be used to help catch people leaving the country to evade fines and loan repayments. “New technology will provide greater capability, flexibility and connectivity to address Government needs and business requirements of industry, the public and international trading partners”, says Mahuta.

The vision for CusMod 2 and the upgrade of the complementary data warehouse system Nexus, involves such novel concepts as real-time data mining and neural network technology. The latter is much used in risk profiling by private companies such as finance and insurance firms, but is virtually unexplored in government circles, says Customs group manager information services Peter Rosewarne.

“Every transaction we do will contribute to a profile,” without the traditional delay and divide between online transaction processing and analytical processing, says Rosewarne.

Decisions on cargo examination, frontline passenger checks and prohibited goods and wildlife enforcement are based on alerts generated from Nexus and CusMod. The system is highly networked, with direct links to external databases and these aspects will be enhanced.

In this year’s Budget, Customs was given $1.1 million for the scoping and design of the CusMod replacement system. This is part of an overall $6.3 million in Government funding over the coming four years for the modernisation of Customs’ information services technology infrastructure.

In August, five New Zealand companies, Fronde, RHE, Topaz, Beacon and Red Vespa, were selected as the resource panel tender providers for the scoping and design phase of the new system. These companies will now help finalise an architectural plan — by way of workshops and other discussions.

This panel approach has attracted positive comments from other government departments for its originality. Employing several small local companies promises to be more informative, as well as making better use of local talent, says Rosewarne.

The companies are contributing business analysts, enterprise architects, system architects and business solution architects, as well as workshop facilitators, and Customs will be able to draw on a variety of specialist technical knowledge.

What’s more, the chosen route will cost less than retaining one large company (which would probably have been a multinational) for the whole job, says Rosewarne.

Customs had 47 responses to its tender. “We never anticipated that many,” says Rosewarne, especially bearing in mind the cost for a small company to submit a tender on a major project. “Some of these small organisations have some highly skilled people.”

Nine other government agencies already use CusMod and the new system is being designed with a “whole of government” perspective, says Rosewarne.

The design also has to consider a number of international incentives to uniformity of border management, including a common data model defined by the World Customs Organisation that is subscribed to by 167 countries. Rosewarne says this aspect of the modernisation of CusMod is crucial to New Zealand’s growing free-trade direction. The success of the system will also crucially involve Customs’ own staff and many private industry stakeholders — exporting and importing companies, freight forwarders, airlines and customs brokers. Their input is included in the scoping and design exercise.

The major deliverable from the scoping and design phase will be a business case to government, with an accompanying Cabinet paper, for further funding to build the system. The business case is due by the end of the year.

“Over the coming months, we look forward to hearing from [other] agencies and industry stakeholders, so we can provide the strategic, operational and systems context for the CusMod replacement,” says Rosewarne.

Plans for the upgrade, which includes the Nexus replacement system, will be implemented as an evolving programme with the entire project scheduled for completion by 2011. The CusMod system is continuously live and it would be impractical to “pull the plug” and install the new system in a single step, says Rosewarne.