Can Government Avoid Technology Failure?

Source: Tod Newcombe, Governing, January 13, 2014

HealthCare.gov is another reminder of the ongoing problems government has with technology. But success and innovation are possible, says an expert. … Why? Because it’s happened often, despite a strong understanding of how to avoid such calamities (more on that below). While the federal government has its fair share of infamous IT failures (the IRS’s tax modernization program and the FAA’s NextGen air transportation initiative, for example), state and local governments have their own, rather long list of dubious achievements that keeps growing.

New York City watched the costs of its payroll modernization project grow from $63 million to $700 million before pulling the plug. The state of Texas had its seven-year, $863 million outsourcing deal with IBM that was plagued by problems. Recently, the Commonwealth of Massachusetts has tried to gain control of its new, $46 million unemployment claim system that has suffered from, you got it, glitches, delays and breakdowns….

…Still, as the Boston Globe pointed out in its investigation of the numerous state IT projects that have crashed and burned, government has a bias towards building big when it comes to IT. Part of it has to do with funding. A reliance on capital budgets to fund IT projects results in big, one-time systems that can take years to complete. But government IT projects have also grown big because of the complexity of delivering more holistic solutions to constituents. Just look at the online health exchanges, built by both the feds and the states, which pull data from numerous sources to verify the various levels of eligibility for enrollees. Similarly, the jobless system launched in Massachusetts last year is a complex piece of technology that replaces a system that was three decades old, and was designed to be deployed in phases.

To make matters worse, large projects not only fail more often, they deliver less, according to McKinsey, the consulting firm. Specifically, half of IT projects with budgets of over $15 million run 45 percent over budget, are 7 percent behind schedule and deliver 56 percent less functionality than predicted, according to a report released in 2012. And it’s not just government that suffer this fate, but private sector IT projects as well….