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

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 whatever he did and 2 or 3 days later just told me to keep the money and not tell anyone. The effort to "fix" the problem was worth more than the problem.

So take that IBM, I got 11 days free pay from you. Enjoy that Canada!

The C3 project, someone else mentioned, is a fascinating project on payroll. It's an odd problem space, it's complex, no denying it. I've built a lot of software and have a hard time comprehending how it could take a payroll cycle to calculate payroll, I believe that the guys that worked on it were all highly intelligent though. There is this odd desire to say "oh, I could do that better" It's also staggering to think that these companies and agencies are willing to spend hundreds of millions of dollars, re-implementing this highly complex business logic rather than somehow streamlining the payroll processes.. even with unions, it's just hard to comprehend it all.

Oracle and other vendors rarely interfere when shop brings them a deal for license revenue. If this was truly a 1 bid contract, it means that IBM likely made the sale and software selection. At that point they brought this deal to Oracle who may well have sent resources, but did not "run" the project. This is another aspect to this sort of large project. Vendors are usually hesitant to go all in with the implementation process, as it looks bad if too much revenue comes from consulting on their balance sheet vs licenses.

If they derive most of their revenue from consulting and not licenses, it gives the impression that its both difficult and expensive to implement. I am willing to bet that a bullet point in the sales process is that it is easy and cheap to implement...

>IBM Canada was the only company to bid on the government's pay modernization project

If only ONE company bid on your project, then you honestly need to rethink it. Does the government really believe that IBM was the only company interested?

Any project that only receive one bid should be cancelled and rethought. If your payroll regulation is so complex that only one company wants to bid, then maybe you should address that issue first.

Governments are in many cases completely clueless about software and believe it's some magical sauce that once applied correctly will make up for poorly thought out and overly complex regulations introduced by the politicians. They fail to understand that the developers are required to understand the rules and procedures before they're able to implement them correctly.

for all the reasons many explained below I want to add into the conversation. there is nothing completely off the shelf for a large organization. now I would have expected a city wide payroll system would be easier to manage but that obviously wasn't the case.

we converted JDE to Peoplesoft AR/AP and there are still those who refuse to let us turn off the older systems. all its tables are maintained and even parallel runs are done for verification. all because out of the box isn't going to fix every organizations tweaks and needed changed to the particular business they are in; hint the burden or government regulation and tax law easily explains this.

now, not in IBM's defense, one thing I have as a take a away from being on a contract to convert from one system to another about twenty years ago looked pretty simple. then came the data inconsistencies, the sheer number of exceptions of which many were known but only to a few, and finally resistance to the new software.

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 generally won't find many of them in these software houses producing the run of the mill code) - cut and paste code that hard codes every option and combination. And who cares because IBM makes money every time someone asks for a change.

IBM is the winner here, and everyone else is a loser.