Australian State Bans IBM From All Contracts After Payroll Bungle

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."

Comments

Wrong!

[TheRaven64]

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!

$1.2 billion payroll system

[Agent ME]

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!

Re:$1.2 billion payroll system

[skovnymfe]

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?

Re:$1.2 billion payroll system

[orlanz]

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.

Re:$1.2 billion payroll system

[pipedwho]

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.

There is an expectation that engaging a large professional specialist contractor would avoid the problems of using a smaller outfit or running the project in-house. You'd expect a specialist mega-corp would be able to help you define the scope and requirements of the project, as it's something of which they supposedly have prior experience.

IBM should have been the one asking the right questions at the start, and requesting access and authority to do their job. It's not like a health care payroll system is something new that no one's ever seen before. The QLD government is essentially employing IBM to be the experts in this area to deliver a suitable system.

I see this crap from these big end of town software outfits all the time. They sell products and customisations that the client doesn't need, features that in most cases just get in the way and make the systems unusable. They charge 10s to 100s of millions to build websites that are unstable and too cumbersome to maintain and use. And generally overcharge for a final product that they shoehorn to fit the actual requirements of the customer (and by extension, the customer's customers).

I don't think the general tendering/bidding process helps much either, as it doesn't always give enough access to scoping and requirements gathering to be able to generate a valid cost estimate. In many cases it comes down to the sales team getting a huge bonus contingent to signing off on the sale. And they'll say and promise anything upfront, and let the weasel^wlegal team rewrite the contracts to make every request for something that should have been included seem like an out-of-scope up-charge.

Australia could have learned from New Zealand

[ernest.cunningham]

IBM were the contractor for New Zealand's largest IT cock up INSIS (Integrated National Crime Information System, http://en.wikipedia.org/wiki/INCIS) 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).

Re:Lol

[wisty]

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.

Re:Language Barrier

[Nyder]

Not likely given China's propensity towards spying on everyone.

Did you say that with a straight face?