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Australia Businesses Government IBM The Almighty Buck Upgrades

Australian State Bans IBM From All Contracts After Payroll Bungle 212

Posted by samzenpus
from the and-you're-done dept.
renai42 writes "If you don't follow Australian technology news, you're probably not aware that over the past few years, the State of Queensland massively bungled a payroll systems upgrade in its Department of Health. The issues resulted in thousands of hospital staff being underpaid or not paid at all, and has ballooned in cost from under $10 million in budget to a projected total cost of $1.2 billion. Queensland has now banned the project's prime contractor, IBM, comprehensively from signing any new contracts with any government department, until it addresses what the state says are IBM's project governance issues."
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Australian State Bans IBM From All Contracts After Payroll Bungle

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  • by Anonymous Coward on Thursday August 08, 2013 @05:41AM (#44507063)

    Obviously, you Aussie blokes need to learn Hindi if you want to partner effectively with IBM.

  • Lol (Score:5, Informative)

    by Anonymous Coward on Thursday August 08, 2013 @05:53AM (#44507103)

    Deflection, Qld health are the worst run bureaucracy in country. I've heard first hand they put non IT on the project and were forever changing scope then pushing forward with little or no testing.

    • by Elindor (84810)

      That came up in the various stories I read yesterday about this issue - and I'm more inclined to believe IBM's side of the story.

      • Re:Lol (Score:5, Interesting)

        by erroneus (253617) on Thursday August 08, 2013 @06:48AM (#44507303) Homepage

        Indeed. IBM's reputation is pretty well established. They are slow, tedious and yet effective. They are a glacier in IT. But I see it everywhere -- people making decisions in an IT project that have know knowledge of what it takes to make things happen. The illusion that "it's all so easy" has really gotten buried too deep in someone's head somewhere.

        • Re:Lol (Score:5, Informative)

          by RabidReindeer (2625839) on Thursday August 08, 2013 @07:27AM (#44507473)

          Indeed. IBM's reputation is pretty well established. They are slow, tedious and yet effective. They are a glacier in IT. But I see it everywhere -- people making decisions in an IT project that have know knowledge of what it takes to make things happen. The illusion that "it's all so easy" has really gotten buried too deep in someone's head somewhere.

          The magic phrase is "All You Have To Do Is..."

          Those six words have destroyed more IT projects than anyone can count.

          • by tibit (1762298)

            And the man-month. The mythical man-month. Let's not forget the man-month. Have I mentioned the man-month yet? :)

            • And the man-month. The mythical man-month. Let's not forget the man-month. Have I mentioned the man-month yet? :)

              Ahem. PERSON-month. Can't offend the PC crowd, now.

              "person" months are computed in units of AYHTDI. So the two are related.

              • by nwf (25607)

                Ahem. PERSON-month. Can't offend the PC crowd, now.

                Particularly when everyone is moving to tablets.

                • by tibit (1762298)

                  RabidReindeer and nwf, thank you. No fizzy drinks nor keyboards were harmed while reading those posts. Only barely so.

              • by Darinbob (1142669)

                Not true. Woman-months are much more efficient than man-months, since they can multitask.

          • Indeed. IBM's reputation is pretty well established. They are slow, tedious and yet effective. They are a glacier in IT. But I see it everywhere -- people making decisions in an IT project that have know knowledge of what it takes to make things happen. The illusion that "it's all so easy" has really gotten buried too deep in someone's head somewhere.

            The magic phrase is "All You Have To Do Is..."

            Those six words have destroyed more IT projects than anyone can count.

            My favorite requirement is: "Works as designed"

        • Re:Lol (Score:4, Insightful)

          by Loughla (2531696) on Thursday August 08, 2013 @08:53AM (#44508143)

          The illusion that "it's all so easy" has really gotten buried too deep in someone's head somewhere.

          I think it's because PC's are the new 'old car'. In my youth, when men were bored, they would go tinker around with their cars. This tinkering began and ended at home, simply because there was no translation to the workplace. Today, though, with all the gee-gaws and doohickeys that are on modern cars, men have less to tinker with. What we do have, though, is a home PC. We can tinker, we can figure, we can play with the home PC and not really screw stuff up. SO, to people like that, it really is a simple transition between home PC tinkering, and systems design.

          Or, it could be because most people HAVE to have say in what goes on around them, regardless of skills or knowledge.

          One of those two things.

        • It's a lack of domain knowledge and the expectation that they can direct a contractor to do all the technical stuff without that domain knowledge.

        • by sjames (1099)

          That's half the problem. The other half is the 'business logic' that never made any sense in the first place. What is actually being done is multiple individuals' interpretation of a tremendous mass of confusing and conflicting rules combined with unwritten assumptions and word of mouth 'folk wisdom' that may or may not bear any relation to what is documented. Further, there is a good chance that nobody actually knows where all of the documentation is or how inclomlete what they have may be. Implicit in tha

      • by sjames (1099)

        It does seem unbelievable that IBM and IBM alone is responsible for the project's failure given the fairly small piece of the pie they had.

    • Re: Lol (Score:4, Informative)

      by Anonymous Coward on Thursday August 08, 2013 @06:11AM (#44507189)

      Ditto. I know one of the IBM Admins for this job, she said Qld health signed off at every stage before going live. I'd like to see who has the greater budget for a court battle - the qld govt is broke.

      • Re: Lol (Score:5, Interesting)

        by Anonymous Coward on Thursday August 08, 2013 @06:42AM (#44507281)

        The telling part is that IBM only got $25M for their efforts. I say this as a government PM. We are absolute, miserable failures at buying software. We don't know what we want, which begs IBM, SAIC, SAP, et al, to bid low and then increase the price every time we go "shit, we didn't really mean that."

        • by INT_QRK (1043164)
          Yepper, abso-freaking-lutely! The immutable iron triangle of cost, schedule and performance will drive outcomes every single time, and the permutations work in every direction all at once. Performance expectations (and lack of/unstable definition thereof) drive costs. Costs drive performance and schedule. Schedule (and contraction/protraction/instability therein) drives costs and performance. Unstable costs (changing budgets, delivery orders, etc.) drive everything. Everything drives cost. Costs drive every
          • by plover (150551)

            That Dilbert cartoon was based on a reality I think we all share. The business comes in and says "we want the WhizBang package." The giant IT wheels kick in and someone says "you must follow procurement procedures, specify requirements, find vendors, get bids, select vendor, etc." So IT asks "what are your requirements", and the business says "we want what WhizBang does."

            From then on facts no longer seem to matter. Some analyst copies WhizBang's brochure into a spreadsheet and labels it Requirements.xls

      • Re: (Score:2, Interesting)

        I know one of the IBM Admins for this job, she said Qld health signed off at every stage before going live.

        By itself, sign-off is a red herring in these issues. The contractor is supposed to have the expertise to propose viable solutions before the sign-off, and then to implement them effectively. If the client went against good advice or repeatedly changed its mind, then it carries a share of the blame that can reach 100%, but you cannot establish that from the sign-offs alone (after all, the contractor also signed off on the same things at the same time.) The sign-offs are useful only as corroborating evidence

        • by sjames (1099)

          No amount of expertise will tell you that while the client insists they want X, they really want Y. And even if it does, you will never get them to sign off on solution B that provides Y, they will only ever sign off on solution A that offers X.

          It will not be until the project is nearly done that they will suddenly claim they wanted Y all along even if you did everything but cram Y down their throats on day 1.

    • Re:Lol (Score:5, Informative)

      by Anonymous Coward on Thursday August 08, 2013 @06:27AM (#44507241)

      I worked on a large project for a quasi-government body building software for Queensland Health as a customer.

      They had reservations about us being able to deliver. We delivered a rock-solid piece of software on time and budget. They, however, took 8 _years_ to take that piece of software and put it into production.

      Yes, they are that bad.

      They were a basketcase _at least_ a decade before the payroll bungle.

    • Re:Lol (Score:5, Insightful)

      by wisty (1335733) on Thursday August 08, 2013 @07:13AM (#44507387)

      Requirements:

      Make it better than the old system.

      Make it work the same way as the old system.

      Make it compatible with every else's system.

      The only trade-off allowed is cost, since it's just tax dollars.

    • by jythie (914043)
      That is what I suspect. Payroll systems are kinda hard to mess up, they are one of the most well understood problems in IT. I suspect, if anything, IBM needs more of a backbone when dealing with flakey customers.
      • by sjwt (161428)

        IBM Pulled out after the costs really started to balloon.. as in the 10's of Millions... And then it really went down hill.

    • Yea, from the article 'were caused by woeful project scope definition' problem #1 with all poor performing and failed contracts. If they don't know what they want, or can convey what they want, then they shouldn't be asking for the lowest bidder on it. This is a common theme coming from governments to contractors.

      90% of the blame goes to the ones making the request.
    • This insight rings true although I have little hard evidence to support my hunch. I have witnessed the arrogance of non-IT run projects where people think they can handle things they are not qualified for. The scope and requirements get bounced back to the contractor so many times that it is a miracle the project gets completed at all--and it is always lacking and inadequate for many stakeholders.

  • Wrong! (Score:5, Insightful)

    by TheRaven64 (641858) on Thursday August 08, 2013 @05:56AM (#44507119) Journal
    That's not how government procurement is supposed to work! A company that has failed to deliver on multiple contracts in the past should be given priority, because it has significant experience in government contracting work!
    • That's how software procurement works in the private sector too.

    • "Well, we have a lot of experience working closely with them"

    • by Thanshin (1188877)

      A company that has failed to deliver on multiple contracts in the past should be given priority, because it has significant experience in government contracting work!

      And a company that was ready to sell a $1.2 billion product for only $10 million should be praised as benefactors of Australia!

    • Oh you're from Montreal too?
      • by geogob (569250)

        You could have said : "oh you're from that world too?".

        Everywhere in the world where I lived and worked, it was more of the same.

  • by Agent ME (1411269) <agentme49@nOspAM.gmail.com> on Thursday August 08, 2013 @06:04AM (#44507145)

    If I were paying $1.2 billion for something as rote as a payroll system, it better be fucking amazing. It's estimated that the entirety of Linux could be recreated from scratch for $600 million. A payroll system twice as complex as the entire Linux operating system! Think of the possibilities! I have no idea what the possibilities are, but they must be amazing to justify that cost!

    • by skovnymfe (1671822) on Thursday August 08, 2013 @06:10AM (#44507171)
      You're not taking into account all the middle management and project management such an endeavor requires. That alone easily accounts for 90% of said budget. After all if you don't hire at least 3 managers per developer, how can you make sure they're doing their work properly all 16 hours of the work day?
      • by swilver (617741)

        Are you implying a manager only works for 5 hours and 20 minutes a day?

        • Ha! But no, they probably spend twice that amount at work every day, frolicking in meeting rooms with other managers, drinking coffee, and such. Also someone has to make sure the T.P.S. reports get the correct cover sheets and are written on time.
    • by Joce640k (829181) on Thursday August 08, 2013 @06:49AM (#44507307) Homepage

      If I were paying $1.2 billion for something as rote as a payroll system, it better be fucking amazing.

      The real WTF is that IBM still don't have an off-the-shelf payroll system.

      Paying people's wages is almost the original computer application.

      • by orlanz (882574) on Thursday August 08, 2013 @07:26AM (#44507465)

        Every consulting company out there has multiple off the shelf, turnkey payroll options. Just that no one wants them. Most of the time, the "consultants" just customize one of the options as per the customer's unique needs. Then the customer has even more extremely special and unique needs. Some clearly poor practices and some just not feasible. About 1/2 way through the project people realize that the customer never wanted an off the shelf, turnkey solution. They want a custom built solution. But they just keep going cause its hard to stop a train; even thou they all know the wreck that is coming.

        Funny thing is that if people just bit the bullet and understood the limits of a turnkey or that they wanted a custom solution, they would certainly save a lot of money. It would cost more than the original budget but it would cost a LOT less than the end result. This is why people just don't be honest up front. No one likes approving a $100k project while there is a $90k option. No matter how wrong the second is, they just spend $9.9k figuring out how make the later look good in the summary reports.

        I have spent an unfortunately amount of time & cost convincing and proving to the decision makers what basically to me was 2+2 can not equal 5. It feels insulting most of the time cause they bring us in for our "expert" opinions, but don't trust said opinions. Until there is a cost that is big enough to show up as a line item in a report or some high up gets red in the face. Its sad, but just the way of the world.

        • by tibit (1762298)

          I've seen and played with a swedish accounting/payroll package that ran on Luxor's ABC 802 computers, with data stored in an ISAM database on a CatNet server (a niche swedish networking system). The entire package was written in BASIC and was reasonably nice in use, IIRC. Now this wasn't a port of the relatively poorly performing Microsoft BASIC. ABC 800 BASIC was an original design and performed well enough to implement such a system. I've seen it run in a small business with dozens of employees and millio

      • I'm afraid that calling this a solved problem is like saying that because we've successfully created nanofibers, we should already have a space elevator. There's an enormous gap between a mere accounting system to help balance a single checkbook, and the tracking and integration necessary to actually handle paychecks. And in a large government bureaucracy, the number of distinct systems and workflows that have to be replaced or integrated to will be enormous, and fought tooth and nail by people who perceive

    • by black3d (1648913)

      $25 million has gone to IBM. This means the Qld government has wasted the other $1.175 billion on 'consulting', 'implementation' and 'training'. IBM is just a scapegoat here for the state government's incredible incompetence in, really, everything they touch.

    • It wouldn't be Slashdot without someone finding a way to mention Linux in an article that isn't even relevant to it. :)

  • "Hey honey, I'm going to McDonald's to grab a bite to eat, be back in 10!"

    (A few hours later)

    "... Umm, honey, how did you manage to spend $710 dollars at McDonalds?"

    • * Footnote: The average meal at mcdonald's costs around $6. The ratio is accurate: This is like going to McDonald's to order a happy meal and winding up spending more than you do on rent for it. Whups.

      • Re:Perspective (Score:4, Insightful)

        by Somebody Is Using My (985418) on Thursday August 08, 2013 @07:46AM (#44507555) Homepage

        "Hey honey, I'm going to McDonald's to grab a bite to eat, be back in 10!"
        (A few hours later)
        "... Umm, honey, how did you manage to spend $710 dollars at McDonalds?"

        But let's be fair, the actual breakdown is probably more along these lines:

                    $6 Happy meal (expected budget)
                    $250 consultants and managers haranguing you about how you are hungrier than expected
                    $200 to replace provided hamburger with a specialty burger
                    $250 "expert eating" trainers who advise you on the how to insert hamburger into mouth
                    $4 extra hamburger you ate because the above three took so much time lecturing you that you got hungry again

        IBM only got $25 million of that $1.2 billion. The rest was a result of "the state failing to properly articulate its requirements or commit to a fixed scope." [delimiter.com.au]

    • by pne (93383)

      Such a cost increase would probably be due to similar bungling on the part of the seller, I imagine, who is not able to articulate clearly what, exactly, he wants. It's not like QLD was buying off-the-shelf software that required no customisation.

      "A burger, please!"

      "Wait, no, I'm allergic to peanuts. Did the packaging of any of the food you sell say it may contain traces of nuts? Please throw away all of the stuff you have cooking, sterilise the food preparation area, and re-make my burger."

      "That's a meat b

    • by splutty (43475)

      The answer to that is very obvious.

      The person helping him at McDonald's was a student that moonlighted as a McDonald's server, but secretly made money on the side as a stripper.

      There. Simple explanations are lovely.

  • by ernest.cunningham (972490) on Thursday August 08, 2013 @06:07AM (#44507159) Homepage

    IBM were the contractor for New Zealand's largest IT cock up INSIS (Integrated National Crime Information System, http://en.wikipedia.org/wiki/INCIS [wikipedia.org]) which was a total flop and cost $110,000,000.

    Funny thing is though, we didn't learn from our own mistakes and hired an Australian company called Talent2 for our Education Payroll. It has been a runaway failure (with more new bugs being found than being fixed over any given time period).

    • by LordLucless (582312) on Thursday August 08, 2013 @06:18AM (#44507205)

      Geography lesson: New Zealand is NOT a state of Australia.

      However, we've got provision for you in our constitution, just waiting :P

      6..."The States" shall mean such of the colonies of New South Wales, New Zealand, Queensland, Tasmania, Victoria, Western Australia, and South Australi

      • by _Shad0w_ (127912)

        It's New Zealand's choice as to whether they become a part of Australia or not though, iirc? Although if they do I don't think Australia then gets a choice in the matter, it just happens. I can't see NZ wanting to do anytime soon though...

        • by Entropius (188861)

          In the US, there was a "three-fifths compromise" in the drafting of the Constitution, where the South got to count 3/5 of the slave population in determining representation in Congress. Could NZ do something similar with sheep?

      • by Talderas (1212466)

        And they call American imperialism bad. At least we just overthrow democratly elected governments we don't like. You Aussies are laying claim to a sovereign state.

  • by Anonymous Coward on Thursday August 08, 2013 @06:10AM (#44507177)

    My wife is a doctor who works for Queensland health. To be honest, they had comprehensively mucked up her payroll numerous times prior to the IBM System. Unfortunately, they now feel the need to deduct her pay based on shifts she did 4 years ago (as the new system has slightly different data than the old one). The staff of QH are basically comprehensively useless, and even prior to the new system they would do things like email her other people's personal details and salary information. The staff always have been lazy and careless, and the new system couldn't handle users that didn't give a shit about doing a good job. IBM has undoubtedly ballsed things up, but QH Payroll are genuinely amongst the least competent people in the world. In fact, pretty much anyone in a government position in Queensland is useless, which is why they are in the process of firing 16,000 of them...

    • by sjwt (161428)

      I've known Managers in the QLD government system who would move office equipment around the building so that it slowed down workflows and many more staff where needed to do the same job.. Why? Because they got pay rises when they went over certain staff numbers.

    • by jimicus (737525)

      That sounds like a systemic management problem rather than "staff are lazy".

      Every time I've heard of issues like that it's because some bright spark has - quite by accident - directly related people's annual review to how imaginatively they can screw colleagues over.

  • IBM bungled a massive project for the re-automation of the AKH, Vienna's main hospital. Got banned. It seems, however, that IBM does not care: such "missers" are like flies to such an elephant - yet.
  • by DrXym (126579) on Thursday August 08, 2013 @06:28AM (#44507245)
    I wonder if any government has *ever* had a good experience after signing a major contract with a supplier to implement one of these systems. A single time ever where a project was delivered on time, on budget and performed at or beyond the expectations set down in paper.

    I thought these contracts were just an excuse by suppliers to wildly overcharge governments on the daily rates, software licences and support fees knowing that once the ink has dried on the contract they basically have them by the balls.

    I wonder given the expense of these systems if governments wouldn't be better off to hire teams in-house to write this stuff.

    • by jonbryce (703250)

      The London Congestion Charging System was delivered on time, within budget and with no major flaws.

      • You NEVER hear about the successes.

        An example is the Docklands Light Railway here in London. It's conspicuous by the lack of whingeing that went on about the cost of its construction. When they extended the line to Lewisham, they had to dig tunnels under the Thames, etc. Delivered on time and under budget, and nary a complaint.

        Contrast that with the Jubilee Line Extension...

        • Re: (Score:3, Informative)

          by maroberts (15852)

          Hmm, about that successful Docklands Light Railway

          While the first five years were plagued by unreliability and operational problems,[55] the system has now become highly reliable.[55] In 2008, 87% of the population of North Woolwich were in favour of the DLR

          i.e. it took five years to fix the issues with it.
          It's also overcrowded and the level of demand was grossly underestimated.

  • Just like in the US, the healthcare system guarantees that no valuable money is wasted on actually delivering healthcare to actual people.
  • Every time I'm at an airport, and see the backlit billboards pandering various IT and organizational consulting services, I think of the endless stream of waste of our, the taxpayer's, money those companies have caused, are causing, and will, very likely, continue to cause. Every time some smug suit talks about how great outsourcing is, and how their consultants are going to fix everything for everyone, I just chuckle. It's the stories like this that keep my chuckle going. IBM Australia, thank you very much

  • by CadentOrange (2429626) on Thursday August 08, 2013 @07:56AM (#44507621)
    That's off by more than two orders of magnitude. Heads need to roll.
    • by msobkow (48369) on Thursday August 08, 2013 @02:02PM (#44511943) Homepage Journal

      But you'll note only 2% of that money went to IBM. A 25 million final cost on a 10 million dollar project is only a 150% overrun, and quite reasonable given the spec churn that occurs in government. The specs are never final at the time of bidding, and everyone knows that.

      It would seem the bigger consumer of resources was by far the "out of scope" costs that the goobermint conveniently ignored while setting the initial budget. There are always costs involved with large deployments, and they usually dwarf the cost of development, especially if hardware and infrastructure costs get rolled into it, such as upgrading everyone's PCs from XP at the same time, but "sneaking" that expense into the budget of the large project. And that happens All The Time.

  • IBM has had some newsworthy problems with big contracts of late and ALL of them are government deals. And at that all of them are at the sub-national level; states, provinces and such. Whatever is going badly wrong has to do with the horrendous problems of trying to do business with 'state' governments be it Texas or Indiana or Queensland. For every anecdotal story about the absurd demands placed on contractors by Federal or National governments - states are that and more. The states seem to think they can

  • The Department of Labor and Industry wanted to upgrade its unemployment compensation system from its mainframe system. IBM initially said it would take 3 years and cost $15 million.

    The state finally pulled the plug after the project was 42 months behind schedule and $60 million over budget.

    So much for those vaunted project managers and the PMI certs they have. These two projects fall under the 70% of IT projects that fail, a statistic that hasn't changed in 2 decades.

    • by tibit (1762298)

      I think that those big failures indicate something about human nature at a much lower level. The green screen (CICS and such) was something that every developer could reasonably comprehend in its entirety, and there weren't really a 100 ways to do anything and everything (AFAIK based on 2nd hand lore). It was "limited", but those limitations made it mesh with human limitations. Bazillions of CICS and architectural lookalike systems were successfully deployed, and are still in use and under maintenance.

      Then

  • I remember an IBM project at my old day job where the firm, fixed-price bid was $5 million with delivery in 3 months.

    5 years and $27 million dollars later the project was abandoned, no product was ever delivered.

    The government project manager was given an award and promoted.

    • by plopez (54068)

      If you can't get the promotion, leave the company early in the project. I've seen it happen a number of times, in both the public and private sector. Start a new project, often involving a famous ERP product, with much fanfare. Get it running, spruce up the resume, then leave after 6 months for a higher paying job. The poor schmucks who they left behind got the blame for the project failure.

  • I think not. IBM maximized profits, didn't they? Isn't that what a well run project should do? Nothing is as efficient as a private sector corporation in maximizing profits. They should get some sort of award for this, increasing revenue by 12,000 percent. Just think of the taxes they paid!

  • by C0C0C0 (688434) on Thursday August 08, 2013 @09:14AM (#44508361)
    Poppycock. I used to work for Big Blue. It was the most process bound organization on Earth. It's entire business model is to sell, not innovation, not cutting edge, not feature set, but a complete and utter lack of surprises. If there is anything I can't imagine blaming on IBM, it is a lack of governance.
  • The issues resulted in thousands of hospital staff being underpaid or not paid at all, and has ballooned in cost from under $10 million in budget to a projected total cost of $1.2 billion.

    I understand cost over-runs, but this is a full two orders of magnitude bigger. That's ridiculous.

    This sounds like someone went into this with no friggin' idea of what the scope was, or knew damned well it was much larger than the client would go for, and knew they'd make it up on the "time and materials" aspects of it.

    C

  • I remember back in the day IBM had a few major project failures around SmallTalk.

    • What did Smalltalk have to do with those problems? Whatever one thinks of Smalltalk, it does work. Maybe it's a little slow (I'm not even sure), but these don't seem like speed critical applications.

      • This was back in the 90's. SmallTalk was IBM's enterprise language which they dropped mid 90's in favor of Java. Specifically the problems centered around the over-use of unary methods and operator overloading. In large applications it would become harder to understand and maintain the whole system.

        • ebno's 2nd law: you can write bad code in any language.

          It may be a poor choice (I can't really say because I don't know it), but I'm skeptical of blaming major project failures on the choice of language. A good language helps (and reduces the amount of profanity heard from programmers), but successful projects have been built using some pretty awful languages.

  • We need ACTION ITEM MAN! Professional Superhero.
    http://professionalsuperhero.com/ [profession...erhero.com]

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