May 13th, 2008

EDS' troubled legacy of failed IT projects

Posted by Michael Krigsman @ 8:58 am

Categories: Government projects, IT issues, Project failures, Vendor relationships

Tags: Information Technology, Electronic Data Systems Corp., Strategy, Management, Michael Krigsman

Observing the news that HP is acquiring EDS, perhaps it’s time to reflect on EDS’ troubled history with IT projects. I’ve written about a number of failed projects where EDS played a role.

Warning, some of these stories are ugly:

• More EDS issues over botched IT project in UK
• Serious IT governance issues at UK Revenue & Customs (HMRC)
• EDS screws UK Jobcentre Plus, according to House of Commons
• State of Failure in Wisconsin
• Wisconsin’s Apologist for IT Failure
• ZDNet UK’s list of top 10 IT failures

An anonymous reader sent me the following email specifically regarding an EDS government contract:

In [my state], we have had numerous problems with outsourced IT projects, cost over runs, failure to deliver on time, and products that don’t work. The most frustrating aspect is that there seems to be no sanction for failure — those same companies turn around and sell the same poor product to other states and then get new contracts from our own state.

This sentiment echoes some of the stories I’ve written about EDS:

EDS has proven itself to be anything but a model corporate citizen, and without doubt managing such a behemoth is a difficult and challenging task in the best of circumstances. Nonetheless, such hare-brained schemes remind one of the fox guarding the hen house. Ah, the power of large corporate legal departments with sufficient resources to successfully fight the government.

Let’s hope HP does better than EDS in regards to IT failure.

January 19th, 2008

Letter template reveals Wisconsin social security numbers

Posted by Michael Krigsman @ 7:30 am

Categories: CIO issues, Government projects, IT issues, Project failures, Vendor relationships

Tags: Wisconsin, Social Security Number, Social Security, Operational Accounting, Government, Finance, Michael Krigsman

Social security numbers belonging to as many as 5000 Wisconsin taxpayers were exposed because of a bad letter template used with a misaligned letter folding machine during a state tax form mailing. The letter format placed the social security number too close to the address field, causing it to be exposed outside the envelope.

The situation was reported by the Green Bay Press Gazette, which said this was the fourth time in 14 months that mailing-related problems have resulted in social security numbers being exposed. Comments from officials suggest the roots of this problem lie far deeper than the mailing room alone:

“I don’t know that firing one person or other is going to solve the problem,” [Democratic state Rep. Marlin] Schneider said. “It requires a systemic change.”

Gov. Jim Doyle, a Democrat, issued a statement saying the latest mistake was unacceptable and promised to work with lawmakers and others to ensure that Social Security numbers and other private information is protected.

Ordinarily, one might think a misaligned letter folding machine has little connection with IT. However, the string of similar problems in Wisconsin, along with Representative Schneider’s comment, suggests otherwise. Clearly, the Wisconsin government culture does not take privacy lapses seriously enough. This acceptance of data leakage appears to extend from the IT department to the mail room and up into the ranks of management, which is where responsibility ultimately lies.

This is hardly the first time Wisconsin has been in the news because of poor practices leading to IT-related failures (see here, here, and here). Apparently, the Wisconsin Task Force on State Information Technology failures has not met since since last August. Perhaps it’s time for that group to get cracking.

August 1st, 2007

Wisconsin's Apologist for IT Failure

Posted by Michael Krigsman @ 2:53 pm

Categories: Government projects, Project failures

Tags: Medicaid, Information Technology, Wisconsin, Michael Krigsman

In recent times, Wisconsin has experienced major IT meltdowns, prompting the State Auditor to release a report recommending various IT reforms. Wisconsin’s state legislature also appointed a special task force to review failing IT projects, suggesting the state genuinely takes IT failures seriously. I find these steps to be impressive and positive.

Given Wisconsin’s many IT problems, it therefore came as no surprise to learn about failure on a Medicaid-related project EDS is implementing for the state.

But now comes an interesting twist on this last project: Tom Still, president of the Wisconsin Technology Council, suggests we overlook the multi-million dollar Medicaid screw-up, arguing that it’s just water under the bridge.

From Tom’s article in the Wisconsin Technology Network:

Work on the state Medicaid Management Information System is running behind schedule, and costs are higher than expected, due to reasons that range from changes in state and federal rules governing Medicaid to “mission creep.” There’s probably enough blame to go around for the state and EDS, but pointing fingers won’t help much with the project nearly done. It’s far better to focus on getting the computers up and running - and to begin capturing the benefits of a 21st century healthcare information system.

I view these remarks as irresponsible, misguided, and fundamentally unhelpful, except, perhaps, to vested interests seeking to deflect attention. While discussing future benefits is useful, ignoring waste and mismanagement is simply wrong.

The state has acknowledged it’s IT problems and is working to fix them. Tom, pretending there’s no problem is just not credible.

July 26th, 2007

Pigs Might Fly in Iowa

Posted by Michael Krigsman @ 1:09 pm

Categories: Project management

Tags: A.T. Kearney, Michael Krigsman

According to the Hawk Eye, Iowa has the distinction of joining Nevada and Wisconsin on our list of recent state government project failures. In this case, A.T. Kearney was hired for $3.4 million and saved the state $2.9 million. From the article:

“When [the project] started, the payment to A.T. Kearney was about 35 percent of projected savings, but it ended up being about 120 percent of savings,” [state auditor David] Vaudt said.

Obviously, the outcome was affected by something expected after the project started. The state says it’s a multi-year contract, and hopes the loss can be made up in the future.

Will this contract pay off for Iowa in the end? I doubt it.

[via fellow Enterprise Irregular Jason Busch]

July 22nd, 2007

State of Failure in Wisconsin

Posted by Michael Krigsman @ 1:45 am

Categories: Government projects, Project failures

Tags: Michael Krigsman

Wisconsin seems to be the land of IT project failures. Last April, the state released a report describing broad project failures running through the state government. As a response to so many IT failures, the Wisconsin state legislature formed a special task force to examine the problems.

Now, the Wisconsin State Journal reports additional failure on the state’s system for processing Medicaid health claims. EDS is the system integrator on the project. From the article:

Sen. Rob Cowles, R-Green Bay, a member of the Legislature’s audit committee, said delays on the Medicaid computer initiative might mean the project will cost more than estimated and the state may miss chances to hold down its spending to run the Medicaid program.

“If this system will help us shrink some of those costs and manage things better, we want to get it done as soon as possible,” Cowles said. “Not only would the system cost more money, but operations of the Medicaid system will probably cost more, so it’s a double hit on us.”

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The state’s Medicaid Management Information System is meant to track people receiving publicly funded Medicaid treatment, their doctors and hospitals, and their eligibility and claims. The project is meant to replace the current system, which processes 30 million claims a year for 51,000 health-care providers, and respond to changes in state and federal law, Marquis said.

The estimated cost to complete the system includes a projected $21.5 million to EDS and roughly $10.5 million in costs for state workers and resources, Marquis said. The federal government is covering 90 percent of the costs, and the state covers the rest.

Bill Ritz, a spokesman for EDS Corp. in Washington, D.C., referred questions about the project to the state.

EDS, a pioneer of computer outsourcing, is the market leader in handling Medicaid systems for states, holding contracts with 20 of the nearly three dozen states that outsource that work, Ritz said.

For a state that seems so open regarding it’s IT failures, there is surprisingly little information available about this current situation.

July 11th, 2007

Wisconsin Fights Failure

Posted by Michael Krigsman @ 6:44 pm

Categories: Government projects, Project failures

Tags: Michael Krigsman

The Wisconsin state legislature has created a special group to study IT project cost overruns, called The Speaker’s Task Force on Failed Information Technology Projects.

So far, they have scheduled monthly meetings running through August. If these meetings stop in August, then little will be accomplished. On the other hand, if this task force becomes embedded as a standard part of Wisconsin’s IT process, then the state may well jump to the forefront of successful, public sector IT management.

The Wisconsin legislature has already released a lengthy document examining failed projects in the state. Here is a passage from the opening letter of that document:

In a detailed review of selected large, high-risk projects, we found evidence of inadequate planning that increased costs and compromised timeliness. Estimated costs for one project to customize software for administering the Unemployment Insurance program increased by $18.7 million, and another project was suspended after $23.6 million had been spent. In addition, sales and use tax software with a cost of at least $24.9 million is being replaced only five years after implementation. Two statewide IT consolidation projects have experienced significant delays and cost overruns. A third, intended to replace approximately 100 types of administrative software and projected to cost at least $66.6 million upon completion, requires close monitoring.

The Department of Administration (DOA) has broad statutory authority to oversee and coordinate state IT projects. However, its oversight has been inadequate. We include recommendations to improve DOA’s collaboration with other agencies in identifying high-risk projects and establishing planning standards, including quantifiable performance measures. We also include recommendations to enhance legislative oversight of high-risk IT projects.

Failed government IT projects are common, but accepting responsibility and driving long-term improvements is unusual. Good luck, Wisconsin! We will follow your story.

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