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IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

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Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#61
Government contracts create perverse incentives. I've worked in the space for the past couple decades, and it's revolting. The government takes bids for a project - a project written in very specific ways to guarantee that only 1 or 2 companies on the planet are capable of bidding on it, usually. I wouldn't be surprised if a necessary condition of the IBM contract was intimate long-term experience with the exact system they were replacing, which was likely built and maintained by IBM. Then once the contract is going on, if the company is incompetent and can't meet their schedule - they get more money. At NO point will the government EVER dare to hold a companies feet to the fire and tell them 'you must finish this project and absorb the entire cost yourself' which is exactly what NEEDS to be done.

Instead, companies are incentivized to hire the dirt cheapest labor they can because getting the job done quicker is actively harmful to their business. Then at the end of it all.. there's usually a maintenance contract to be awarded to keep the system upright and operating. The company doing the dev work is going to bid on that and have an apparent advantage (only apparent though... if they don't get it the actual technical people who matter will just go with whoever gets the contract, the contracting company will never actually relocate anyone) and the worse the system looks, the more bug-ridden and unlikely to succeed it is, the larger the maintenance contract will be. Even more incentive to build a ball of shit. Literally at every single turn, doing whatever makes the software worse is what is most profitable in that space. And eventually some news articles like this will get published, people will complain, and someone on the govenrment side of the fence will decide they want to make bringing the system in as a badge of honor in their career - so they will slash all the mandatory requirements the system doesn't yet meet and sign an agreement that whatever half-functional garbage they managed to get was a full completion of the contract. And then the executives of the contracting company go out and celebrate at an expensive bar.

I once worked on the maintenance side of a system that had just been delivered. The original contract that had been granted was a single contract to develop 3 systems. 3 contracts later, 1 system was delivered. And that system required 9 months of full-time development work to be ready to be used operationally. You know what that's called? An unfettered stellar monumental magnificent success... as far as the contracting company is concerned.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#62

Like all IBM projects now day the bulk of the work was done in India for likely less than $5 CAD/hr, while they billed out $100 CAD/hr or even more. The actual numbers may be slightly different, but still these are close to reality. What a great profit margin for a failed project. I wouldn't be surprised the code is like a lot I've seen from Indian-based sweat shops (btw there are amazing Indian coders, but you gener…

Why doesn't Canada put a rule saying all work must be done by Canadians. Even if its cheaper keeping the money in country seems better than sending it to India.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#63
post #48

Another "failed" project for Canadian government, this time by Adobe. http://www.cbc.ca/news/politics/federal-government-to-downsi... Since the projects were done by consultancies you can't call it a failure from the consultancy point of view. They managed to milk the government for multiples of the estimated budged and this is a great success for them. That's just how it works - underbid, lock in and then massage th…

" A $1.54-million contract for a new content management system, where all government websites would be moved, was awarded to Adobe in 2015." If government officials thought that a project of that scale can be done for $1.54 million by a company size of Adobe, then clearly they were negligent in their duty. It can be done by much smaller group of talented developers in couple years, but I'd imagine it would still cost…

I find your message confusing. Are you saying that this is way too much or way too little?

Because 1 million is pocket change for a government project. It barely pays a couple of people for the year.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#64
Similar thing happened in Queensland,Australia. IBM is barred from bidding on contracts (actually, the government forbade anyone on awarding contracts to IBM). IBM sued and won, but the government still will ignore all IBM bids. I only wish they would be able to do more than just ignore IBM, a few stupid bureaucrats signed a bad contract cost Australia too much.

Then again, working in the same way as every other bureaucracy.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#65

Like all IBM projects now day the bulk of the work was done in India for likely less than $5 CAD/hr, while they billed out $100 CAD/hr or even more. The actual numbers may be slightly different, but still these are close to reality. What a great profit margin for a failed project. I wouldn't be surprised the code is like a lot I've seen from Indian-based sweat shops (btw there are amazing Indian coders, but you gener…

Why doesn't Canada put a rule saying all work must be done by Canadians. Even if its cheaper keeping the money in country seems better than sending it to India.

people want to pay less taxes.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#66

Like all IBM projects now day the bulk of the work was done in India for likely less than $5 CAD/hr, while they billed out $100 CAD/hr or even more. The actual numbers may be slightly different, but still these are close to reality. What a great profit margin for a failed project. I wouldn't be surprised the code is like a lot I've seen from Indian-based sweat shops (btw there are amazing Indian coders, but you gener…

Why doesn't Canada put a rule saying all work must be done by Canadians. Even if its cheaper keeping the money in country seems better than sending it to India.

> Why doesn't Canada put a rule saying all work must be done by Canadians.

Because the government doesn't want to be seen as xenophobic. One of the major talking points of the prime minister and his government is "diversity is our strength". They also may want (depending on the department) to be seen as distancing themselves from expenses, not necessarily engaging in cost savings per se, but in cost-saving-style behaviour.

> Even if its cheaper keeping the money in country seems better than sending it to India.

Having worked with IBM-sourced contractors working in the U.S. and Canada, I can say that at least the ones I worked with were pretty useless regardless of where they come from.

The problem is that the government is bidding by familiarity rather than competence, and isn't willing to hire anyone competent enough to build a genuine team. When they tried their Shared Services Canada thing, it was a disaster.

The problem with government in Canada is apathy. Nobody, and I mean nobody, cares at all about Canada as an ideal or concept; nobody really cares all that much about their fellow Canadians.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#67

Like all IBM projects now day the bulk of the work was done in India for likely less than $5 CAD/hr, while they billed out $100 CAD/hr or even more. The actual numbers may be slightly different, but still these are close to reality. What a great profit margin for a failed project. I wouldn't be surprised the code is like a lot I've seen from Indian-based sweat shops (btw there are amazing Indian coders, but you gener…

Not defending IBM, but IBM's job was to install "off the shelf software called PeopleSoft" to create a payroll system. They 'installed' it and walked away as that was what was required of them. They are now being called in to do more and that has contracting costs associated with it. The Govt of Canada has as much blame in this as anything - poorly written contracts with little knowledge of how software works.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#68
post #8

Mind boggling. What could possibly be so complicated about a payroll system? Does anyone here have insight into this problem space?

This is the perfect place to "confess" to something that happened to me, fresh out of college, at my first full time real job at IBM... 1996ish I got paid for 2 weeks on my first pay check but I was technically on the job for 3 days. I thought about it, biggest paycheck I had ever had in my entire life at that point, and I decided to do the honest thing and tell my manager. He thanked me, made some calls, did whateve…

It's not free pay. Your salary accounts for the empty times when there isn't a client project to assign you to. When you do work, you are billed much higher than the pay you get.

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#69
"But when it comes to Phoenix, Aylward isn't focusing his blame on IBM. Like the procurement experts, he faults the scope of the initial contract for the resulting failure."

Twenty-six years of developing software, I haven't worked on a project yet that was any better than 60% specified. This inability of people to specify, in full and in detail, what they want is the reason for the rise of Agile.

A colleague of mine sagely said, "We need to show them something quickly just so they can tell us what they don't want."

Re: IBM contract cost for failure-plagued Phoenix payroll system jumped to $185M

#70

Like all IBM projects now day the bulk of the work was done in India for likely less than $5 CAD/hr, while they billed out $100 CAD/hr or even more. The actual numbers may be slightly different, but still these are close to reality. What a great profit margin for a failed project. I wouldn't be surprised the code is like a lot I've seen from Indian-based sweat shops (btw there are amazing Indian coders, but you gener…

>Like all IBM projects now day the bulk of the work was done in India for likely less than $5 CAD/hr,

This was a PeopleSoft install with customization and IBM typically doesn't use India workers for those types of projects. I don't know of this Canada project in particular but I have knowledge of half a dozen other IBM PeopleSoft contracts with the government and they use onsite developers for it. One of the big reasons is the consultants must pass a federal background check which requires USA citizenship. I would assume Canada has a similar requirement.

Also, IBM doesn't have a PeopleSoft delivery/solution center in India to do this work. Last I checked, IBM does have a SAP delivery team in India.

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