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NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

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Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#31

Post by gaius »

easyfrag wrote: post #19
Eddk wrote: post #11

Very common situation in government contracts and dealing with consultants in general. I am sure IBM and Accenture are in there some how. NYC government could have created a small crack-team of internal IT people who could build the system for less than a 5th of the current cost. Unfortunately most organizations view IT work as something fit for mercenaries and if you ask any King who has ever had to rely on mercenar…

Yes a small competent team could build the IT system for a fraction of the time and money. However they would only be successful if the business processes were well defined which I'm willing to bet they were not. New IT systems often come along with changes in process, a well defined IT project should produce a system that follows and complements those processes. Instead what we often get are "boil the ocean" project…

Yes a small competent team could build the IT system for a fraction of the time and money

A team that can do that AND is willing to navigate the treacherous minefields of internal politics at a government department doesn't exist.

Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#32

Post by roc »

bhousel wrote: post #12

Most of these consultants themselves are not making all of that money. They work for companies like Accenture which bill their time out at several hundred dollars per hour, but then pay the consultants much less. For example, the 400k/year figure quoted only amounts to about a $200/hr bill rate. That's far from the worst I've ever heard on a project like this.

When I consulted via a firm, they regularly billed clients $200-$300/hr for the work of developers and operations folks who were getting paid ~$20-25/hr.

Granted, this was in fly-over country, but the gap between billable-hour and developer-hour is quite often massive.

Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#33

Post by gaius »

bm98 wrote: post #10

The city is paying some 230 "consultants" an average salary of $400,000 a year for a computer project that is seven years behind schedule and vastly over budget. This is misleading. The figures in the article are based on the hourly rates charged by the contractor that employs these consultants, not their take home salaries. This is noted only later in the article: The actual amounts individual SAIC employees took ho…

In consulting it's typical to get paid a quarter of your billing rate, as a rule of thumb. I've seen places where it's a tenth tho'.

Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#34

Post by tjic »

Eddk wrote: post #11

Very common situation in government contracts and dealing with consultants in general. I am sure IBM and Accenture are in there some how. NYC government could have created a small crack-team of internal IT people who could build the system for less than a 5th of the current cost. Unfortunately most organizations view IT work as something fit for mercenaries and if you ask any King who has ever had to rely on mercenar…

> NYC government could have created a small crack-team of internal IT people who could build the system for less than a 5th of the current cost.

So you're arguing that the NYC government is incompetent at running a project done by contractors, but it would be better at both FORMING and RUNNING its own team of contractors?

Sounds like nonsense to me.

Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#35

Post by tjic »

gaius wrote: post #30
Eddk wrote: post #11

Very common situation in government contracts and dealing with consultants in general. I am sure IBM and Accenture are in there some how. NYC government could have created a small crack-team of internal IT people who could build the system for less than a 5th of the current cost. Unfortunately most organizations view IT work as something fit for mercenaries and if you ask any King who has ever had to rely on mercenar…

The thing is here, no-one is incentivized to deliver. The bureaucrats who specify the system don't really care as it's not their money, and they justify their positions by sitting in meeting and writing reports that only each other will ever read. Then there are the consultants who are paid hourly... Typically it goes like this: Bureaucrats: Here is a 1000-page spec document that we have spent 3 years writing. We cap…

> The thing is here, no-one is incentivized to deliver.

Amen.

Incentives are everything, and if you look at most things without keeping that foremost in your mind, you'll see a hodgepodge of weird random effects ... but use that perspective, and most things make a ton of sense.

Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#37

Post by jamii »

roc wrote: post #32
bhousel wrote: post #12

Most of these consultants themselves are not making all of that money. They work for companies like Accenture which bill their time out at several hundred dollars per hour, but then pay the consultants much less. For example, the 400k/year figure quoted only amounts to about a $200/hr bill rate. That's far from the worst I've ever heard on a project like this.

When I consulted via a firm, they regularly billed clients $200-$300/hr for the work of developers and operations folks who were getting paid ~$20-25/hr. Granted, this was in fly-over country, but the gap between billable-hour and developer-hour is quite often massive.

The upside of this is that their customers are used to paying those rates. If you are self-employed or work for a small consultancy you can undercut them and still make a bag of money.

Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#38

Post by ageanm »

gaius wrote: post #33
bm98 wrote: post #10

The city is paying some 230 "consultants" an average salary of $400,000 a year for a computer project that is seven years behind schedule and vastly over budget. This is misleading. The figures in the article are based on the hourly rates charged by the contractor that employs these consultants, not their take home salaries. This is noted only later in the article: The actual amounts individual SAIC employees took ho…

In consulting it's typical to get paid a quarter of your billing rate, as a rule of thumb. I've seen places where it's a tenth tho'.

As you ascend the ranks of consulting and get to the top 3 shops (McK, BCG, Bain) it drops down to 1/20th to 1/30th. That is once you take into account the disparity between number of hours billed and the number actually spent doing the work.

Re: NY Pays 230 “Consultants” $722M For Project 7 Years Behind Schedule

#39

Post by dkarl »

tjic wrote: post #34
Eddk wrote: post #11

Very common situation in government contracts and dealing with consultants in general. I am sure IBM and Accenture are in there some how. NYC government could have created a small crack-team of internal IT people who could build the system for less than a 5th of the current cost. Unfortunately most organizations view IT work as something fit for mercenaries and if you ask any King who has ever had to rely on mercenar…

> NYC government could have created a small crack-team of internal IT people who could build the system for less than a 5th of the current cost. So you're arguing that the NYC government is incompetent at running a project done by contractors, but it would be better at both FORMING and RUNNING its own team of contractors? Sounds like nonsense to me.

Internal IT people would be able to "cheat" by talking to actual users and stakeholders, doing stealth requirements gathering, examining the current system and how it's used, doing rogue user testing, etc. Basically doing all the things that everyone agrees are required for success on this kind of project, but which in the real world end up being dropped or neutered by bureaucracy. E.g., your "expert user" is the manager of the users and doesn't know anything about how they do their jobs, and you aren't allowed to talk to the actual users. An internal person would be more likely to have the personal contacts and trust required to work around crap like that.
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