Australian State Bans IBM From All Contracts After Payroll Bungle 212
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."
Re:$1.2 billion payroll system (Score:5, Interesting)
In fact IBM did comment on this:
As the prime contractor on a complex project, IBM must accept some responsibility for the issues experienced when the system went live in 2010, however, as acknowledged by the commission’s report, the successful delivery of the project was rendered near-impossible by the state failing to properly articulate its requirements or commit to a fixed scope.
IBM’s fees of $25.7 million accounted for less than 2 per cent of the total amount. The balance of the costs is made up of work streams which were never part of IBM’s scope.
Project governance issues (Score:5, Interesting)
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.
Re: Lol (Score:5, Interesting)
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."
Re:Lol (Score:5, Interesting)
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: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 for the information that is needed to determine what went wrong, which is a) who decided what, and when? and b) were the decisions effectively implemented?
While sign-offs are an important formal action in the process, they are not themselves productive, and when I see people obsessing over them, I see people in CYA mode, preparing for the assignment-of-blame phase of the project.
Right. IBM Needs More Process. (Score:4, Interesting)
Re:Lol (Score:3, Interesting)
The illusion that "it's all so easy" has really gotten buried too deep in someone's head somewhere.
Sure, but payrolls are easy. They were easy when I was doing it for local and national governments in Europe 30 years ago, and I don't see that they could possibly have got much harder since then, even if staff do get demoted/promoted five times a day.
Re:$10 million to $1.2 billion (Score:4, Interesting)
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.