For discussion FCR(96-97)56
on 19 July 1996

ITEM FOR FINANCE COMMITTEE

CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Lands Department
New Subhead "Office Automation System for Lands Administration Office"

Members are invited to approve a commitment of $27,151,000 in a new subhead "Office Automation System for Lands Administration Office" under the Lands Department.

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PROBLEM
PROPOSAL
JUSTIFICATION
FINANCIAL IMPLICATIONS

Non-recurrent cost
Recurrent cost
Savings and benefits
Cost and benefit analysis
Implementation plan

BACKGROUND INFORMATION
Cost-benefit analysis of the proposed office automation system for Lands Administration Office, Lands Department

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PROBLEM

The Lands Administration Office (LAO) of the Lands Department (Lands D) needs a computerised office automation system to enhance its efficiency and capacity in handling and monitoring land disposal, management and resumption functions.

PROPOSAL

2. We propose to develop and implement a computerised office automation system for LAO at a total non-recurrent cost of $27,151,000.

JUSTIFICATION

3. LAO is responsible for land administration including control, management, disposal and resumption in Hong Kong. At present, it has about 2 150 staff working in LAO headquarters and 23 outlying and district offices. Eleven of the offices are in remote areas. Since January 1996, we have linked up five of the district offices and the offices of the senior directorate of Lands D headquarters through three small-scale office automation systems. Communication within and among the remaining 18 offices and with LAO and Lands D headquarters is by means of telephone, fax and movement of files. We also compile the statistical and management reports of these offices and LAO headquarters manually. Furthermore, each of these offices maintains its own set of land data and records manually in registers, cards and paper files. Under the present arrangement, the staff of Lands D have encountered difficulties in the retrieval, updating and sharing of data and information among themselves in discharging their duties.

4. In the light of the proven effectiveness of the existing three small- scale office automation systems, the Director of Information Technology Services (DITS) has commissioned a feasibility study on the merits of implementing office automation in the remaining 18 offices of LAO. The study has concluded that an office automation system would enable LAO to discharge its functions more efficiently. The proposed system will be a network of personal computers to be linked up with the three existing local area networks. In consultation with DITS, Director of Lands envisages that the proposed system will -

1. provide a computerised communication link between individual LAO offices. Staff may prepare, send and receive messages, recommendations and departmental instructions efficiently through electronic mail;
2. facilitate the flow and the share of data and information within LAO via the central computer server. Such information includes Lands Tribunal decisions, land sale programmes, auction results and data produced by other offices of LAO and Lands D. All network users can use relevant and updated information prepared by these offices at any time to facilitate prompt decision-making in performing valuation, resumption and land disposal functions;
3. provide a central pool of information including various progress reports, land grant documents, land lease conditions, etc. to enable staff to issue approval documents and conditions or rejection letters based on the master files in the computer. The pool of information will ensure the issue of the documents and conditions within the pledged timeframe and in line with the latest departmental version;
4. provide document management and retrieval facilities to enable quick reference to precedent cases;
5. provide word processing and spread sheet functions to facilitate the preparation and updating of statistical and management reports and valuation analysis; and
6. centralise the updating of departmental standing instructions and circulars.

FINANCIAL IMPLICATIONS

Non-recurrent cost

5. We estimate the total non-recurrent cost of the proposed system to be $27,151,000, broken down as follows -

6. As regards paragraph 5(a), the cost of $10,398,000 is for the acquisition of 108 computer servers, 547 workstations and other network and ancillary equipment in 18 LAO offices and the LAO headquarters.

7. As regards paragraph 5(b), the cost of $3,326,000 is for the acquisition of computer network software and office automation software packages for the proposed system.

8. As regards paragraph 5(c), the cost of $3,858,000 is for site preparation.

9. As regards paragraph 5(d), the cost of $2,011,000 is for cabling and data communication works as well as for acquisition of start-up consumables for the local and wide area networks of the proposed system.

10. As regards paragraph 5(e), the cost of $4,589,000 is for contract services for system development and implementation by ITSD's contractors and contract staff.

11. As regards paragraph 5(f), the cost of $500,000 is for training of staff for the implementation and support of the proposed system.

12. The estimated cost of the staff resources in Lands D to support and supervise the testing, trial run and the implementation of the proposed system is $822,000. They include four man-months of an Estate Surveyor and 12 man-months of a Senior Survey Officer. The cost is broken down as follows -

Lands D will meet this requirement by internal redeployment of resources.

13. The estimated cost of the staff resources in ITSD to manage and supervise the contractor in implementing the proposed system and to accept the delivered equipment is $245,000. They include two man-months of a Senior Systems Manager. The cost is broken down as follows -

ITSD will meet this requirement by internal redeployment of resources.

Recurrent cost

14. The proposed system will result in additional recurrent expenditure of $5,415,000 per year on full implementation, made up as follows -

15. As regards paragraph 14(a), the cost of $676,000 is for maintenance of the computer and network equipment.

16. As regards paragraph 14(b), the cost of $762,000 is for meeting the annual rental charges for the telecommunication lines of the system.

17. As regards paragraph 14(c), the cost of $370,000 is for purchasing computer consumables including data tapes and printing materials.

18. As regards paragraph 14(d), the cost of $150,000 is for training of network administrators.

19. As regards paragraph 14(e), the cost of $787,000 is for providing on-going contract services to support the network installation for the proposed system.

20. As regards paragraph 14(f), the cost of $1,380,000 is for meeting the full staff cost of one Estate Surveyor and one Senior Survey Officer in Lands D to provide support for network administration, user training, software development and data management for the proposed system from 1997-98 onwards.

21. As regards paragraph 14(g), the cost of $1,290,000 is for meeting the full staff cost of eight man-months of Systems Manager and fourteen man-months of Analyst/Programmer I in ITSD for providing on-going maintenance service and technical support for the proposed system from 1997-98 onwards.

Savings and benefits

22. We expect savings of about $8,570,000 as from 1997-98, made up of $1,080,000 in realisable savings and $7,490,000 in notional savings.

23. Realisable savings ($1,080,000) include the deletion of five permanent Typist posts six months after the successful implementation of the system.

24. We expect to accumulate fragmented and notional savings of up to $7,490,000. The savings will be the cumulative effect on reducing the time needed to compile and update statistical reports and manual records, etc.

25. We will also be able to shorten the time required in collecting and collating the output from respective subject officers and related parties by 10% on average. Furthermore, we will be able to increase our capability to handle the overall number of enquiries from officers for information and data by an overall 10%.

Cost and benefit analysis

26. A detailed cost-benefit analysis is at the Enclosure. We expect that we will pay back the total cost of the proposed system by the year 2008.

Implementation plan

27. We propose to implement the proposed system in August 1996 for completion in April 1997. The implementation timetable is as follows -

BACKGROUND INFORMATION

28. In the 1994 Policy Address, the Governor announced a plan to computerise Lands D in the following two years.

29. In 1995-96, we developed and implemented three small-scale office automation systems which linked up five district offices of LAO and the offices of the senior directorate of the Lands D headquarters. These systems, costing about $4,800,000, have helped to bring about some improvements in the efficiency and productivity of LAO.

Planning, Environment and Lands Branch
July 1996

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Enclosure to FCR(96-97)56

Cost-benefit analysis of the proposed office automation system for Lands Administration Office, Lands Department

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