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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

#51

Post by cirgue »

dastbe wrote: post #47
petra wrote: post #42

Earlier quoted context omitted.

Is there a better way for governments to manage such processes ?

One of the major problems (at least in the US) is that the process is heavyweight and specifically tuned towards "lowest conforming bid". You end up getting subpar work and long delays, but the government is absolutely unwilling to restart the process in almost all cases because the cost is just that large (and we picked this one because it was going to be the lowest cost!). In some ways, the government has very litt…

Another major problem in consulting projects is accountability. There is no central repository of data on major consulting firm's success rates, and there is no way for most administrators to objectively determine the risk associated with a given consulting project. However, there is significant risk associated with the failure of an in-house initiative from the perspective of government employees, just as there is in the corporate world: it is easy and low-risk to blame contractors for failure, but if you are the one managing development there is no one to blame but you.

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

#53

Post by jguimont »

bhouston wrote: post #39

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…

Last time I contracted for IBM I was paid 150/h and I heard they billed 300$/h on their end to the federal government.

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

#54

Post by eljimmy »

I've worked on federal contracts for Canada for a few years in the past. It really doesn't surprise me that this happened.

I saw failures on every level. The client (government), the PMs, the developers. It was mind-blowing how much incompetency was infested into the entire system.

I think the problem with the public sector is that some of them genuinely don't give a shit about their work and there's really zero repercussions to them for not doing their job well. They won't get fired like someone would in the private sector. With that said, I've no doubt some of them do work hard and are comparable to their private sector counterparts.

But until workers in the government can truly be held accountable, these types of IT disasters will continue to happen. Heads need to start rolling.

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

#55

Post by afterburner »

raesene6 wrote: post #28

The public sector in a number of countries seems addicted to these large-scale high risk forms of procurement. Instead of running a larger number of smaller projects, which would be harder for them to adminster, there's a temptation to lump it all into one mega-project and shift the responsibility to a consulting company. The problem with that approach is, of course, that its almost impossible to accurately specify a…

Being attached to an expensive project is a big plus in career development. Same as having big budgets and having lots of people under you.

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

#56

Post by maxxxxx »

raesene6 wrote: post #28

The public sector in a number of countries seems addicted to these large-scale high risk forms of procurement. Instead of running a larger number of smaller projects, which would be harder for them to adminster, there's a temptation to lump it all into one mega-project and shift the responsibility to a consulting company. The problem with that approach is, of course, that its almost impossible to accurately specify a…

I think the way budgeting and management works the people in charge want to have an upfront price and timeline. It would probably be better to say "let's spend $x/year over the next years and see how far we can get".

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

#58

Post by Retric »

gonzo41 wrote: post #18
Retric wrote: post #9

Earlier quoted context omitted.

The government creates a Request for Proposal (RFP) listing what the government wants. Companies have some listed period that could be as short as 7 days or as long as 6 months to respond with a Proposal of work including costs. Government then reviews and picks one based on the stated criteria. This might seem like a reasonable solution, but it adds significant overhead.

So adding onto this, if you do a quick google for an exmaple of a government RFP. OMFG! no agile in sight. You'll be greeted with about a thousand pages of spec. This is where the big shops earn their money. They know how to grind through the paperwork.

You find plenty of Agile in government contracting. Generally the requirements are very high level and the implementation details are after the fact.

I am also aware of some huge pivots where some minor feature became the only thing the customer cared about.

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

#59

Post by Frondo »

dastbe wrote: post #47
petra wrote: post #42

Earlier quoted context omitted.

Is there a better way for governments to manage such processes ?

One of the major problems (at least in the US) is that the process is heavyweight and specifically tuned towards "lowest conforming bid". You end up getting subpar work and long delays, but the government is absolutely unwilling to restart the process in almost all cases because the cost is just that large (and we picked this one because it was going to be the lowest cost!). In some ways, the government has very litt…

The "lowest bid" thing is actually now starting to change. Government buyers are starting to get trained--and there is an accompanying culture shift--on the idea of best value, which is a combination of price, timeliness, ability to deliver, and whatever other factors actually contribute to money not being wasted.

It's stupid that for so long it's been coded into law that you need to spend as little as possible, because that's part of what got us here; the buyers in a lot of cases can't go with a better, more expensive option.

Hopefully the "best value" culture shift in government buying will go along with legal changes to let them act on that.

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

#60

Post by bitmapbrother »

IT horror stories involving IBM don't really surprise me anymore. I'm more surprised by the companies and governments they continue to game with their low ball bid tactics.

I once worked with a large team from IBM that was staffed with Indians that did the work both onsite and offshore in India and it was without a doubt the worst code quality I've ever seen in my career. There were classes with 10,000+ LOC, methods with over 1000 LOC and dead unreachable code that wasn't even commented out. Speaking of comments, if it wasn't automatically generated by the IDE there would be none. But the most horrific example of their lack of attention to detail and code quality was the absolute absence of any unit tests in this massive project with millions of LOC. The only unit tests ever written were by me and those unit tests were subsequently disabled/commented out when some other developer decided it would be easier to disable the unit tests rather than to modify them to adhere to the changes they were making. It's a shame more clients don't hire independent code auditing companies to inspect the code their paying millions of dollars for.

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