Red Rock Consulting will undertake a $16 million upgrade of Defence's ageing Personnel Management Key Solution (PMKeyS), creating at least 20 new jobs in Canberra.
The Oracle consultancy's chief Jonathan Rubinsztein said the project would see Defence upgrade to the latest versions of Oracle PeopleSoft software and the DB2 database underpinning it, and upgrade "associated technology and interfaces".
Rubinsztein said the consultancy had created a new team in Canberra to undertake the work.
"We already have a new team but we'll probably bring in another 20 people on top of that," he said.
"We're recruiting a number of people for this new project. We're really looking at growing our Canberra business."
Defence handed off day-to-day management of the system to Red Rock in May 2007. This was to remain a separate project with its own team.
The newly announced technical upgrade of the system was expected to be completed in the first half of 2012.
The Minister for Defence Personnel, Alan Griffin, said the PMKeyS refresh would "also involve the integration of Defence's Reserve payment system, CENRESPAYII."
Griffin said the project would "address the current technology risks associated with the PMKeyS and CENRESPAYII systems and ensure continuity of the personnel and pay functions."
In recent months, Defence has been under pressure to improve personnel and finance systems after an embarrassing payment bungle. It fast-tracked several such projects for consideration in March.
"This project will also provide a modern, stable technology platform, on which to build the longer-term solution for personnel systems, enabling Defence's business process reform initiatives and supporting reform in the Workforce and Shared Services Stream of Defence's Strategic Reform Program," Griffin said.
Red Rock's Rubinzstein said that while the scope of this project was around "upgrading the platform and architecture", the new version of PeopleSoft would provide a "lot of opportunity" to Defence to make future enhancements to the system.
"Once the new architecture is in, it gives Defence scope to do a whole lot of exciting new things," Rubinsztein said.