For discussion
FCR(97-98)106
on 20 March 1998
ITEM FOR FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Immigration Department
New Subhead Rectification of the computer systems of the
Immigration Department for Year 2000 compliance"
Members are invited to approve a new commitment of $60,931,000 for rectifying the computer systems of the Immigration Department for Year 2000 compliance.
PROBLEM
The computer systems of the Immigration Department (ImmD) are not fully Year 2000 (Y2K) compliant; if not rectified in time, this will impair the operations of the department and its services to the public.
PROPOSAL
2. The Director of Immigration (D of Imm), in consultation with the Director of Information Technology Services and with the support of the Secretary for Security, proposes a non-recurrent commitment of $60,931,000 to rectify the computer systems of ImmD to ensure Y2K compliance.
JUSTIFICATION
3. ImmD uses information technology widely to support its day-to-day operations and services to the public. These include clearance of passengers at nine immigration control points, processing of visas and permits, issuing of travel documents, registration of births, deaths and marriages and processing of identity card applications at 92 immigration offices. In addition, the computer systems of ImmD interface with 12 government bureaux, departments and other
organisations. The design of these computer systems is very complex. They comprise five major computer application systems and 22 sub-systems, 8 600 application programmes and 200 different types of system software running on over 6 400 hardware units.
4. In 1997, ImmD and Information Technology Services Department (ITSD) jointly conducted a technical study on Y2K compliance for the existing computer systems of ImmD. The study has established that all application programmes in use are Y2K compliant, but the system software and programming languages supporting the application programmes are not. The rectification work required includes -
- upgrading/replacing 81 system servers and about 1 900 workstations and other equipment to support the upgraded system software and programming languages;
- replacing about 100 types of system software; and
- modifying/converting about 3 000 application programmes to make them compatible with the upgraded system software and hardware.
5.To ensure that the computer systems of ImmD can continue to function efficiently and effectively beyond Year 2000, we need to rectify the affected hardware and software before the turn of the century. We also need to conduct comprehensive tests of the new system products and plan carefully the production roll-out approaches to ensure that all systems are fully Y2K compliant and that they can function smoothly and efficiently in an heterogeneous operating environment. We set out at Enclosure 1 details of the testing and production roll-out approaches.
Cost-benefit analysis
6. The proposed rectification work is essential in ensuring the continued effective operation of the various computer systems beyond the Year 2000. The normal cost-benefit analysis is therefore not entirely applicable in this case. However, it should be noted that any computer breakdowns and/or system failures during immigration clearance at control points or processing of identity cards and travel documents applications at immigration offices could lead to very serious chaos and consequences, resulting in enormous social and economic costs.
FINANCIAL IMPLICATIONS
Non-recurrent expenditure
7. The D of Imm estimates that the implementation of the proposal will incur a non-recurrent cost of $97,936,000 over a two-year period from 1998-99 to 1999-2000. This comprises $60,931,000 for the acquisition of computer hardware and software and related services and $37,005,000 for the staff cost of additional in-house staff responsible for the planning and implementation of the project. We set out below details of the cost estimates -
|
|
1998-99
$'000
|
1999-2000
$'000
|
Total
$'000 |
|
(a)
|
Hardware
|
6,895
|
4,498
|
11,393 |
|
(b)
|
Software
|
5,411
|
1,080
|
6,491 |
|
(c)
|
Site preparation
|
1,035
|
0
|
1,035 |
|
(d)
|
Implementation services
|
6,619
|
5,160
|
11,779 |
|
(e)
|
Contract/temporary staff
|
14,551
|
9,018
|
23,569 |
|
(f)
|
Miscellaneous
|
677
|
448
|
1,125 |
|
(g)
|
Contingency
|
3,519
|
2,020
|
5,539 |
|
Sub-total
|
38,707
|
22,224
|
60,931 |
|
(h)
|
Staff costs
|
|
|
|
|
(i) ImmD
|
19,120
|
9,978
|
29,098 |
|
(ii) ITSD
|
5,035
|
2,872
|
7,907 |
|
Sub-total
|
24,155
|
12,850
|
37,005 |
|
Total
|
62,862
|
35,074
|
97,936 |
8. As regards paragraph 7(a), the cost of $11,393,000 is for the acquisition of computer hardware for upgrading/replacing those non-Y2K compliant equipment.
9. As regards paragraph 7(b), the cost of $6,491,000 is for the acquisition of computer system software for replacing those non-Y2K compliant software.
10. As regards paragraph 7(c), the cost of $1,035,000 is for site preparation for the office of project teams, testing site, signal cables and accessories, electrical and uninterrupted power supply installation and special furniture for computer equipment.
11. As regards paragraph 7(d), the cost of $11,779,000 is for the acquisition of service for the Y2K rectification work from vendors supplying the existing turnkey systems. These turnkey systems are application programmes developed and maintained by vendors on a contract basis. Subsequent upgrading/maintenance of these systems, including the Y2K rectification work, therefore has to be undertaken by the same vendors.
12. As regards paragraph 7(e), the cost of $23,569,000 is for employment of contract/temporary staff (360 man-months of Contract System Analyst, 68 man-months of Contract Programmer and 38 man-months of temporary Clerical Assistant) to supplement ITSD staff in carrying out the Y2K rectification work on other non-turnkey computer systems, implementing hardware and software upgrade and replacement, and overseeing the rectification work undertaken by the vendors.
13. As regards paragraph 7(f), the cost of $1,125,000 is for the acquisition of miscellaneous items such as consumables and the upgrading of dataline to support the Y2K testing.
14. As regards paragraph 7(g), the cost of $5,539,000 represents a 10% contingency on the cost items set out in paragraph 7(a) to (f).
15. As regards paragraph 7(h)(i), the cost of $29,098,000 represents the staff cost of ImmD's project team comprising 665 man-months of ImmD staff. Of these requirements, ImmD will absorb 198 man-months (at staff cost of $5,592,000) by internal redeployment. We set out at Enclosure 2 details of the staffing requirements of ImmD's project team. The project team is responsible for overseeing the implementation of the project and conducting comprehensive user acceptance tests and production roll-out planning and preparation. These are very important tasks in ensuring the proper functioning of the computer systems while hardware and software enhancement are being progressively implemented, otherwise the day-to-day operation and services of the department would be adversely affected. As explained in paragraph 3 above, the design of ImmD's computer systems is very complex and each application transaction involves a number of sub-systems. The department therefore needs to put in considerable staff resources in planning and co-ordinating the project as well as conducting user acceptance tests.
16. As regards paragraph 7(h)(ii), the cost of $7,907,000 represents the staff cost of ITSD's project team responsible for planning and implementation of the project. The team involves 106.3 man-months of ITSD staff (3.8 man-months of Chief Systems Manager, 9.5 man-months of Senior Systems Manager, 38 man-months each of Systems Manager and Analyst/Programmer I and 17 man-months of Analyst/Programmer II).
Recurrent expenditure
17. We estimate that additional recurrent expenditure arising from the rectification work is $594,000 for the first year, $528,000 for the following three years and $2,939,000 from the fifth year onwards. Details are as follows -
|
|
1999-2000
$'000
|
2000-01
to 2002-03
$'000
|
2003-04
and onwards
$'000
|
|
(a)
|
Maintenance of computer hardware
|
102
|
206
|
2,016 |
|
(b)
|
Maintenance of software
|
492
|
322
|
923 |
|
Total
|
594
|
528
|
2,939 |
18. As regards paragraph 17(a), the annual expenditure is for the additional maintenance cost for the upgraded/replaced hardware. The increase in the maintenance cost in 2003-04 is due to the expiry of the discount period from the fifth year.
19. As regards paragraph 17(b), the annual expenditure is for the additional maintenance cost for the replaced software. The decrease in maintenance cost from the second to fourth years is due to the termination of maintenance cost of obsolete software after Y2K rectification. The increase in the maintenance cost in 2003-04 is due to the expiry of the discount period from the fifth year.
Implementation Plan
20. ImmD plans to implement the proposal according to the following schedule -
|
Activity
|
Target completion date |
|
(a)
|
Formation of project teams
|
May 1998 |
|
(b)
|
Site preparation
|
July 1998 |
|
(c)
|
Procurement of hardware and software
|
January 1999 |
|
(d)
|
System upgrade/replacement, programme modification and testing
|
November 1999 |
|
(e)
|
Setting of system time of the workstations
|
1 January 2000 |
BACKGROUND INFORMATION
21. Most existing computer systems use a two-digit year configuration in order to economise on computer resources such as memory, processing power, storage capacity and data transfer speed. As many computer processes are triggered by data comparisons, problems will arise when performing computations based on dates beyond Year 2000. Components affected include the operating systems which control and manage the operation of the central processing unit and the input/output devices, system utility software which handles the data transfer between devices and sorting of data, application software which defines the manipulation of data according to the business requirements, and other hardware devices such as internal timers.
22. The process of rectifying a non-compliant system is similar in nature to a system enhancement. It involves application programme modification, hardware and software upgrade, and possibly data conversion followed by system testing and user acceptance.
Security Bureau
March 1998
Enclosure 1 to FCR(97-98)106
Testing and Production Roll-out Approaches
We will process the testing and production roll-out of the system products in phases for ease of problem identification and isolation. There are three upgrade phases for the Host computer and one phase for the UNIX servers. In addition to an initial upgrade test for the overall new products, we plan to have, for each upgrade phase, a comprehensive application system test conducted by Information Technology Services Department and an user acceptance test conducted by Immigration Department. Each test will consist of two cycles which will go through all on-line transactions as well as batch jobs and programmes for all application systems. The details are set out below.
First Cycle - Functionality and Compatibility
2. This testing cycle is a general and complete test of all application programmes. The main objective is to test the functionality and compatibility of the new system products running together with the application programmes, including those programmes changed due to the Year 2000 (Y2K) exercise. The focus will be on the accuracy of data and the smoothness of the application transactions. System dates for the testing cases in the cycle will be set to dates before 2000 to avoid ambiguity for problem isolation and minimise date calculation complexity.
Second Cycle - Y2K Compliance
3. Similar to the first cycle for testing the functionality and compatibility of new system products, this cycle is a complete test of all application programmes. However, it goes more specific with the date-sensitive cases. The main objective is to test that the new system products together with the application programmes and data are Y2K compliant. Focus will be on the on-line and batch transactions with date calculation algorithm and functions such as expiry date and age, etc. The testing will include all possible permutations of date usage. The test will include "before 2000", "across 2000", "after 2000" and "involving 29 February 2000" and other leap year calculations.
Enclosure 2 to FCR(97-98)106
Staffing Requirements of Immigration Department 's Project Team
|
Rank
|
Number of
man-months
required
|
Number of
man-months
absorbed by
internal
redeployment |
|
Immigration grade officers
|
|
|
Assistant Principal
Immigration Officer
|
19
|
0 |
|
Chief Immigration Officer
|
19
|
0 |
|
Senior Immigration Officer
|
53
|
4 |
|
Immigration Officer
|
161
|
29 |
|
Immigration Assistant
|
227
|
129 |
|
Sub-total
|
479
|
162 |
|
Clerical and operation staff
|
|
|
Senior Computer Operator
|
19
|
0 |
|
Computer Operator I
|
37
|
0 |
|
Computer Operator II
|
37
|
0 |
|
Personal Secretary II
|
19
|
0 |
|
Assistant Clerical Officer
|
19
|
0 |
|
Clerical Assistant
|
36
|
17 |
|
Office Assistant
|
19
|
19 |
|
Sub-total
|
186
|
36 |
|
Total
|
665
|
198 |
