Novopay and Queensland Health: One-offs or symptomatic of a deeper problem in the IT industry?

Novopay and Queensland Health: One-offs or symptomatic of a deeper problem in the IT industry?

Failed IT projects are a global phenomenon – but the more recent cases suggest the problem may be getting worse and closer to home. What is causing this and can it be fixed?

Generally speaking the longer a project the more likely it is to run into problems. More so on large-scale programmes with major technology components and requirements that undergo significant change once work begins.

Why? People come and go during implementations and technology changes just as rapidly. In some cases, projects are simply too big and best practice is not always followed.

For the past 20 years, I have worked on the legal aspects of some of these projects – on either the customer or supplier side. Based on that experience, the themes are constant and, if anything, the adverse consequences of failure (such as delay and cost over-runs) have worsened (perhaps reflecting increased scale, complexity and ambition).

Some examples are particularly disturbing. These include US retail chain Kmart, whose problems in the IT area and two other business projects contributed to its decision to file for bankruptcy, as described by Bent Flyvbjerg and Alexander Budzier in an article for the Harvard Business Review in September 2011.

Another is the infamous patient records IT programme in the UK where billions of taxpayer pounds were spent over several years before it was dismantled by the UK government in 2011.

More recent cases hit closer to home – Novopay and Queensland Health (QH) – which were “perfect storms” given the combination of problems experienced and the extreme levels of disruption, delay and wasted expenditure suffered.

Is it time for a radical re-think on the approach to IT procurement, particularly large-scale, complex projects?

Michael Bywell, Minter Ellison Rudd Watts

QH had the added feature of inappropriate conduct by both customer and supplier side representatives at the bid stage. (See sidebar next page: A tale of two inquiries)

What is it about IT projects that causes these problems and what is the solution?

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