Enterprise Compliance Today

Top 3 Lessons From IBM and Queensland Health's Billion Dollar Fiasco

Posted by Greg Carroll on Fri, Apr 12, 2013 @ 06:15 AM

Part 2 of a series on what went wrong with the Queensland Health payroll system implementation (see Part 1: Safety In Size? Not For IBM Software Implementations)


corporate governance

People go with big companies because they feel safe. A familiar refrain is, "no one ever got fired for buying IBM." This debacle, where the final cost was 200 times the original price, shows how flawed that thinking is. Learn about our implementation method »

A system is only as good as the plan in place to build, maintain and manage it. It’s clear that Queensland Health had little or no plan in place to ensure that its new payroll system was delivered, on time, within budget and crucially defining who had what roles.

From an original price of by $6.19 million, the cost ballooned to more than $37 million. By the time the system went ‘live’ in March 2010 it cost the government more than that to get it up and running.

Soon after the system went live, big problems popped up. Thousands of public servants were underpaid, overpaid or unpaid.

Blame the computer system? I don't think so

Blame has been squarely placed on the flawed computer system. Sure, we love to blame the system. Questions need to be answered on things such as what sort of defects were Queensland Health experiencing, and in what systems? How did they creep in? When were they first experienced? What problems did they cause? Whose responsibility was it to fix them and what work was undertaken to fix them?

But there are reasons why these problems occur, and that is quite simply poor governance, bad management, poor communication and a clear lack of planning.  So let’s dissect what came out of the KPMG audit of this fiasco. The monitoring and control process for the overall program had not been put into a formal program plan.

The communication plan was missing in action

The communication plan for the program did not adequately address how the program would engage with stakeholders. In addition, the plan was not formally approved by management!

  • The governance structure for the system implementation was not clear, causing confusion over the roles and responsibilities of the parties.
  • There was inadequate documentation of business requirements at the commencement of the project.
  • The absence of a periodic review of the business needs contributed to subsequent difficulties with system testing and the implementation of a system which did not meet the needs of Queensland Health’s operating environment.
  • System useability testing in the business environment was not performed.

It's a pretty damming report. But what are lessons we can learn from this? The list could go on forever, but I’ll give you my top 3.

  • Always establish clear lines of accountability, roles and responsibilities at the initiation of the project.
  • Ensure the full impact of any system change is assessed thoroughly.
  • Ensure the ultimate decision to Go-Live is based on the readiness of the business and that the systems application within the business is fully tested.

People first

Lots of project management "experts" know the schoolbook version of their jobs. In reality, a good project is 20 percent science and 80 percent art. That's because implementation is more about people than about software and machines. At Fast Track, our approach to implementing a new system is to first get to know the people involved and how they do their jobs. Taking that extra time to learn the human element invariably makes the path smoother later on.

A project manager must motivate and work with people to get good results. It's not the job for a bureaucrat. So rather than blame the system, which is the easy way out, look at the people and the plans behind the system. The system didn’t make the plan to build itself.

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Tags: project management