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10/28/2013
09:56 AM
Jim Ditmore
Jim Ditmore
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Why Do Big IT Projects Fail So Often?

Obamacare's website problems can teach us a lot about large-scale project management and execution.

By now nearly every American has heard about or witnessed the poor performance of healthcare.gov. Early on, only one of every five users was able to actually sign in to the site, while poor performance and unavailable systems continue to plague the federal and some state exchanges. Jeffrey Zients, the Obama appointee called in to fix healthcare.gov, promised on Oct. 25 that the site "will work smoothly for the vast majority of users" by the end of November.

Soon after the launch on Oct. 1, former federal CTO Aneesh Chopra, in an Aspen Institute interview with The New York Times' Thomas Friedman, shrugged off the website problems, saying that "glitches happen." Chopra compared the healthcare.gov downtime to the frequent appearances of Twitter's "fail whale" as heavy traffic overwhelmed that site during the 2010 soccer World Cup.

But given that the size of the signup audience was well known in advance and that website technology is mature and well understood, how could the government create such an IT mess? Especially given how much lead time the government had (more than three years) and how much it spent on building the site, (estimated between $300 million and $500 million).

This project failure isn't quite so unusual, unfortunately. Industry research suggests that large IT projects are at far greater risk of failure than smaller efforts. A 2012 McKinsey study revealed that 17% of lT projects budgeted at $15 million or higher go so badly as to threaten the company's existence, and more than 40% of them fail. As bad as the U.S. healthcare website debut is, there are dozens of examples, in both the government and private sector, of similar debacles.

In a landmark 1995 study, the Standish Group established that only about 17% of IT projects could be considered "fully successful," another 52% were "challenged" (they didn't meet budget, quality or time goals) and 30% were "impaired or failed." In a recent update of that study conducted for ComputerWorld, Standish examined 3,555 IT projects between 2003 and 2012 that had labor costs of at least $10 million and found that only 6.4% of them were successful.

Combining the inherent problems associated with very large IT projects with outdated government practices greatly increases the risk factors. Enterprises of all types can track large IT project failures to several key reasons:

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-- Poor or ambiguous sponsorship

-- Confusing or changing requirements

-- Inadequate skills or resources

-- Poor design or inappropriate use of new technology

Strong sponsorship and solid requirements are especially difficult to come by in a political environment (read: ObamaCare), where too many individual and group stakeholders have reason to argue with one another and change the project. Applying the political process of lengthy debates, consensus-building and multiple agendas to defining project requirements is a recipe for disaster.

Furthermore, based on my experience, I suspect the contractors doing the government work encouraged changes, as they saw an opportunity to grow the scope of the project with much higher-margin work (change orders are always much more profitable than the original bid). Inadequate sponsorship and weak requirements were undoubtedly combined with a waterfall development methodology and overall big bang approach usually specified by government procurement methods. In fact, early testimony by the contractors indicated a lack of testing on the completed system and last-minute changes.

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humberger972
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humberger972,
User Rank: Apprentice
10/29/2013 | 3:36:13 PM
re: Why Do Big IT Projects Fail So Often?
55 Contracting firms, and multiple interfaces with systems that have no mapped out data standards. Duh .... to many contractors in the system, no data standards, gareenteed fail, the question is why is anyone surprised? Put out one standard for data, and have fewer contracting firms involved. CSDP standards would help as well, oh....and not having the final requirments til the last few months...... imagine that.... also betting they didn't pick the best languages for large business systems, but the language and tech that each contracting firm was most confortible with, so not just different data formats coming in, different tech / languages talking to each other....joy
GAProgrammer
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GAProgrammer,
User Rank: Ninja
10/29/2013 | 4:33:45 PM
re: Why Do Big IT Projects Fail So Often?
Actually, at launch, only 1 in 10 could log in, not 1 in 5.
LogicalThinker
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LogicalThinker,
User Rank: Apprentice
10/29/2013 | 4:34:03 PM
re: Why Do Big IT Projects Fail So Often?
I believe the blame belongs squarely on poor choices at the very beginning to roll out such a huge SDLC project using Waterfall Project Management. Clearly, Agile combined with a gradual roll-out would have uncovered all of the problems sequentially rather than in the big bang of problems that are now being experienced.
Frankly, I am very surprised that the liberals have not yet blamed the ObamaCare website problems on the vast right-wing conspiracy.
BDC-IT
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BDC-IT,
User Rank: Apprentice
10/29/2013 | 5:18:25 PM
re: Why Do Big IT Projects Fail So Often?
There were so many issues with this roll out, beginning with requirements, that there is not enough space here to comment. Jim made some good suggestions as to what should have been done, but they are not available now, unless you start over completely and that isn't really practical. The one thing that wasn't done that could still be done is to appoint an overall program executive, reporting to Sebelius, with access to the President. A big mistake not having done this from the beginning, and there are more systems issues, very similar to the web site, that will affect delivery that the public does not yet know about.
LogicalThinker
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LogicalThinker,
User Rank: Apprentice
10/29/2013 | 6:13:06 PM
re: Why Do Big IT Projects Fail So Often?
Alas, it seems that in this case there was plenty of time to do it right the first time and not enough time to do it over! Ironic!
However, it is not too late to switch to an Agile Kanban and Scrum solution to rescue the failed project. An executive reporting to Sebelius and/or Obama will not fix the issues. An iterative step-by-step, issue-by-issue, sprint-by-sprint approach is their only hope... and a log-in counter that limits the number of users on the site to a manageable number until that infrastructure issue is resolved.
An old software axiom states that bringing more resources onboard a late project makes it later. Been there and seen that!
BDC-IT
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BDC-IT,
User Rank: Apprentice
10/29/2013 | 6:33:38 PM
re: Why Do Big IT Projects Fail So Often?
The problem has been a lack of leadership and driving folks to execute a plan, not the techniques used. You won't be able to get the step-by-step approach off he ground, much less successful, without a proven Program Executive, with visibility and support as noted by Jim. If all is done is follow your proposed approach, then your old software axiom will kick-in.
Somedude8
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Somedude8,
User Rank: Ninja
10/29/2013 | 7:46:48 PM
re: Why Do Big IT Projects Fail So Often?
"a surge of tech resources"
Oh that sounds promising... More chefs can surely make the stew taste better, yes?
Herberio
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Herberio,
User Rank: Apprentice
10/29/2013 | 8:45:59 PM
re: Why Do Big IT Projects Fail So Often?
One other element I would add is the fact that an IT implementation is no other thing than an automation of one or more business processes, so the bigger the project the larger the business processes (and functions, and concepts, and policies) involved,
so if they are poorly defined (deficient enterprise architecture) the "IT system" would be doomed to fail.
DragonDagger
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DragonDagger,
User Rank: Apprentice
10/29/2013 | 8:57:45 PM
re: Why Do Big IT Projects Fail So Often?
There are no data standards among insurance companies. This website is suppose to overlay like a Kayak or a Hotels.com does in their industries. Maybe ACA is forcing such standards but I doubt it. This whole process was caused by the insurance companies as they got the single payer system removed from the original ACA bill.
DragonDagger
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DragonDagger,
User Rank: Apprentice
10/29/2013 | 9:02:10 PM
re: Why Do Big IT Projects Fail So Often?
Right about the development process wrong about all the other stuff. Remember ACA is modeled after a program in Mass. create by that Romney fellow, a "right" type.
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