Case Study 4: Why do public-sector projects fail?
Back in the spring of 2007 a doctor application system which was supposed to match junior doctors to specialist training posts was shelved by ministers. Doctors complained that the system – the medical training application service (MTAS) – was profoundly flawed and that many juniors had been unfairly treated. The reorganisation of training and the application process meant that 30,000 doctors were chasing just 23,000 posts in a system poorly thought through. Astonishingly research suggests that one in five doctors have even considered suicide, such is the depth of the fiasco.
And the story didn’t end there. The MTAS site has also allegedly been the subject of two security breaches, which caused the opposition to call for the resignation of the then-health secretary, Patricia Hewitt.
But in the world of public sector technology initiatives, this story was the most recent in a long line of blunders. One of the most troubled technology outsourcing cases was that of the now defunct Child Support Agency (CAS). The outsourced IT system was at the root of the agency’s problems. An investigation by the National Audit Office (NAO) found that ‘go live’ of the system had been authorised, despite the CSA and its supplier being aware that there were 52 defects within the system. The NAO branded the project, ‘one of the worst public administration scandals of modern times’.
These and other examples of outsourcing have been very damaging to public sector organisations for a range of reasons. There is of course the waste of money and other resources. Public sector organisations are effectively answerable to taxpayers – wanton waste of public funds does not bode well for good relations. These public sector technology catastrophes also attract a good deal of negative publicity – this can do serious amounts of damage to the organisation’s reputation and dent stakeholder and taxpayer confidence in the ability of the organisation to do a good job. Just look at the CSA – the situation deteriorated to such an extent that the entire organisation was scrapped.
The fact that public sector technology and outsourcing projects go wrong so regularly means we aren’t surprised by these failures anymore. Public sector projects are so tainted by their poor track record, expectations are set very low and they now have little to live up to. So why do these failures keep happening?
There needs to be an element of realism when looking at major technology projects. The sheer scale of the larger projects means that inevitably there will be problems along the way. The problem with many of these initiatives is that the parameters of the project and contract provisions are tightly defined and the contracts are not managed effectively by the same team through the project lifecycle. When a problem is encountered often the first reaction of the public sector is to seek to avoid any blame.
History has taught us that errors and mistakes should be expected and factored in to the way that contracts and projects are managed. A shift away from the blame culture to an environment where successful delivery is valued above all else is required in order to increase the probability of problems being detected at an early enough stage for them to be dealt with appropriately in a way that works for the supplier and the public sector.
Problems often arise around the cost issue. Cost is often cited as a major driver in technology and outsourcing projects. Whilst it is undoubtedly important, public sector organisations have to be wary they are not blinded in the quest for squeezing as much value for money as possible out of the supplier. This procurement-led approach to technology and outsourcing can be problematic as it leaves very little scope for innovation in the project and makes it much more difficult to cope with problems when they arise.
What appears to be the cheapest deal is often the worst as frequently the service will be compromised or the final cost will spiral because it was unrealistic in the first place. Of course as a spender of public funds those in the public sector feel an obligation to get the best deal but nailing the supplier to the wall financially can often backfire. End users need to realise that any mentality of ‘the cheapest wins’ means that the more realistic suppliers will be missing out on contracts.
Problems in technology and outsourcing deals can often arise when there are unclear lines of responsibility both within the public sector and between the public sector and the supplier. Drafting a contract with clear responsibilities and then managing it appropriately deals with the responsibility between the public sector and the supplier. However, it does not deal with the constant reorganisation that takes place at central and local government level or the constant churn of ministers and officials on projects.
With this sort of fundamental change, is it any wonder that there is not a great track record of successful delivery of major technology projects? Failures are often attributed to the supplier but as in any relationship it takes two to tango. A blame culture often comes to the fore when things go wrong, with the end user blaming the supplier as operations were not executed to their satisfaction and the supplier blaming the end user because they were negotiated right down on costs.
Problems worsen as the two parties are more concerned with absolving themselves of wrongdoing than they are with rectifying the issues. Since differences or disputes are inevitable in relation to large-scale technology projects, mediation and adjudication – which exist as legal mechanisms for resolving disputes – should be more widely utilised. Adjudication is a particularly useful dispute-resolution process for obtaining swift results which has yet to find favour on large-scale technology projects.
From all the press reports that circulate about these problematic projects, it would seem that they invariably involve the same circle of suppliers. This understandably begs the question, why on earth do public sector organisations keep selecting them? One of the major problems in the public sector today is the lack of competition amongst suppliers.
The principle reason behind this is the protracted and complex tendering process that suppliers have to go through. Far from there being an alleged ‘inner circle’, organisations really are limited when picking a vendor for projects of this size. More choice would be likely to mean better service. But with such hurdles to overcome how can smaller, quality suppliers compete in the public sector market? And how can end users avoid the obvious choice?
Public sector organisations need to take a more strategic approach to outsourcing. They need to ensure they have a dedicated team that manages the process full time, constantly reviewing existing contracts and looking for improvements and innovations. Instead of using a ‘onestop shop’ supplier the public sector should look to use specialist suppliers for different aspects of a project. This gives smaller companies a chance of a contract but also gives the end user access to.
Unfortunately the need for an ‘intelligent client’ is often overlooked – with the very expertise the public sector needs to manage its IT suppliers being outsourced to those suppliers. Public organisations shouldn’t be held to ransom by a private organisation. If they spread the work and therefore knowledge between a range of suppliers or keep some knowledge in-house then this won’t happen.
The public sector boom of technology outsourcing is definitely set to continue but public sector bodies need to learn lessons from their private peers. Successful delivery needs to be valued within the public sector more than simply not being to blame for problems. The key to successful delivery is to have continuity of personnel throughout the project lifecycle; a sensible, balanced contract managed appropriately; effective dispute resolution; and the retention of an ‘intelligent client’ on the public sector side
QUESTIONS and Requirements
1. Public-sector information systems projects have had a chequered history. Is the “national programme for IT” proving to be any different from some of the fiascos that have preceded it?
(Give an introduction of “national program for IT” first and then explains difference.)
2. The national programme for IT involves a substantial increase in outsourcing. What are the likely benefits and risks associated with this approach?
(It should mention why the national programme for IT witness a substantial increase in outsourcing. Give some date and research figures.)
3. What are the main reasons for project failure?
(The main reasons are mentioned in the article above, summary the main reasons and explain clearly. )
4. What steps can be taken to reduce the risk of project failure?
5. How could the COBIT methodology be applied in this context?
(use the material I gave on page 82. COBIT IT Processes)
6. What other methodologies have been developed that apply to public sector projects?
How do they apply to this context?
(Contains some originality of approach, insight or synthesis)
1. Use at least one academic quality article and/or professional journal article. You should not use articles aimed primarily at marketing a product ( except possibly for tables, graphs, etc.)
2. Be sure to follow the standard practice of an introduction and conclusion. Also, use headings and sub-headings to make the structure of the work clear and tables and graphs to illustrate points.
3. (Criteria) The assignment should assesses the following unit learning outcomes,
– Explain the activities involved in system implementation & management.
– Evaluate information systems in a financial & management context
– Appreciate security and government issues as they relate to information system.
4. The handbook we are using is Business Information Systems: technology, development and management textbook by Bocij et al. use this book as material and some other martial is allowed as well.
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