Tag Archives: Management Consulting

Comment to the WSJ on the PA Unemployment Compensation System Fiacso

Posted on by

From today’s WSJ:

The Morning Download: IBM IT Implementation Goes Astray

Steve Rosenbush

Good morning. The state of Pennsylvania will not renew an  IBM Corp. contract to build an unemployment compensation system after software defects and other problems pushed the project $60 million over budget and 42 months behind schedule.  Pat Phelan, a Gartner Inc. analyst, tells CIO Journal that the state could have done a better job working with IBM to fix the problems, but ”you can only blame the customer so much because they don’t know what they don’t know.” The company has previously crossed swords with other public agencies, such as the states of Indiana and Texas and the Air Force. It should be noted that Pennsylvania was trying to replace software 35 to 45 years old. IBM said it was working to resolve the problems.

My comments:

Hi Steve,

I am a technology project turnaround guy and have seen my share of projects like this.

The next level of analysis beyond the typical yawners, i.e., over scoped, poor executive participation, poor controls, data migration problems, etc., would probably uncover the following:

The vendor sold the state by parading the A players, soon switched to the B players, and then switched to the Level 5 certified subcontractors that are sitting on the other side of the world and don’t speak English the same way as the State’s employees do.  Once that happens, the client’s key decision makers bolt and then the consultants have their gold-mine: a bill-at-will situation.  The killer here is that State pays the same bill rate even though the vendors margins continue to expand as the vendors hunt deeper into the barrel for the C players with the lowest pay rates.

The State’s decision makers were greased by the vendor in the form of Super Bowl tickets, VIP treatment at conferences, golfing opportunities or other inappropriate compensation.  When projects go on for years, those decision makers already parachuted into new jobs at other organizations with high expectations and great references, ready to pull the same old nonsense all over again.

The scope of the project was too large, too ungainly and undoable.  The team attacked the easy challenges first and then postponed dealing with the thorniest issues until the project was clearly blowing up.

My guess is that there is money here to be recovered from the vendors – I’d like to see the consultants time sheets and match those to the project’s interim deliverables.

My new book, Escaping Delete, details why these projects fail and how to avoid the pitfalls. http://www.amazon.com/Escaping-Delete-CEO-Black-Hole/dp/0615331947/

Keep uncovering these failures – it’s a shame when PA can’t pay claims properly but it’s more of a concern when similar failures imperil our national defense systems.

Jon Bellman
919-410-7441

Reality Check, LLC
www.rcheck.com

Practicing What I Preach — ESCAPING DELETE

Posted on by

ESCAPING DELETE will go on sale shortly and the “New & Improved” Reality Check will come out of the closet. Fifteen years ago we had no book or no slick website but our mission and message have remained unchanged: we help clients put wayward Information Technology projects back on track.

In 1984 I helped a large manufacturing company implement an early ERP system. My technology implementation career brought me through the hallways of the world’s largest IT consulting firms and their clients. While I continue to marvel at technology’s might, I am equally amazed at the inconsistent results that large IT projects bring. Failure, not success, remains the standard. While IT’s power and potential skyrockets, IT’s reality is full of overblown and over budget projects. Despite the fancy advertising by the IT industry, the basic management challenges confronting IT implementation haven’t changed. Potential desperately trails actual. Capability is purchased among fanfare and fanfare turns into rivers of red ink, wasted time, and massive opportunity cost.

ESCAPING DELETE is a lighthearted look at a serious problem. It debunks the IT industry’s heady claims and deflates the collective ego of those who hold sway over, and sometimes strangle, corporate IT.  I wrote the book because I firmly believe that IT will continue to be the engine of progress but that engine ought to be getting ninety miles per gallon, not nine. As Big Data becomes Big Distraction and Smartphones steal our attention from the tasks at hand, we need a massive Reality Check. It’s time to reign in IT, harness that potential, and tightly control its risk.

The Marimba tone on your iPhone is your wakeup call!  For a preview of ESCAPING DELETE, please visit Reality Check’s contact page and send me your information.

Jon Bellman