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They Said It Would Cost $54M. We Said "No Thanks."

nateglubish.substack.com

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Re: They Said It Would Cost $54M. We Said "No Thanks."

#51

Post by bluGill »

pjc50 wrote: post #27

> where we identify public servants with strong technical aptitude across government, bring them into dedicated product teams > The team’s approach was straightforward. Build working software fast. Put it in front of real users early. Collect feedback. Fix things quickly. Release updates every two weeks. > That’s a 95% cost reduction. Both systems instead of one. Delivered faster. With 643 users already on the platfo…

You are missing the larger problem: it isn't a fixed capital cost you can put in the budget.

Modern accounting (for some good reasons) counts different costs in different buckets. If you invest in a system, the cost should be spread out over all the years the system is in use. However if you investing long term we want to be sure it is worth the investment - there is a point where something is not worth the cost. For things that are only for this year we can easially understand if the cost was worth it, but if we need to spread it out over many years it is much harder. If we can set a cost today we can have a debate on if it is worth the investment.

However designing something is not an fixed cost process. I cannot say if it will take me 1 week or another year to get the current bug I'm working on fixed, but if it takes more than a month my boss will say it isn't worth the cost of fixing it. (and then we get to sunk costs: what if I put in 1 month and am only 1 day from the fix, should I quit now?)

When you put a design contract out for bids they have to go big. They have to deliver for $54M even if things are harder. When someone says the real cost is likely to be $100M they really mean that once you have the $54M version you will realize what you wanted wasn't what you needed, and there is $46M in extras to turn what you specified into what you really need.

Re: They Said It Would Cost $54M. We Said "No Thanks."

#52

Post by pizza234 »

m-i-l wrote: post #40

I think the use of AI is really missing the point here. The point is that small in-house teams can deliver a lot more quickly and to a higher quality and at a lower cost than large outsourced teams from the big consultancy companies. I've seen this over and over again (the problem is that large organisations often prefer to go the slow and expensive route with the big consultancy companies for a complex variety of re…

> I think the use of AI is really missing the point here. The point is that small in-house teams can deliver a lot more quickly and to a higher quality and at a lower cost than large outsourced teams from the big consultancy companies.

This assumes that small in-house teams are inherently effective/efficient, which is not necessarily true.

In this sense, the difference between proven engineering leads (as the article states/assumes) leading a small team versus AI is that the latter is entirely under their control, which minimizes the risk.

So AI vs. small teams is about controlling/guaranteeing effectiveness/efficiency.

Re: They Said It Would Cost $54M. We Said "No Thanks."

#53

Post by pjc50 »

vessenes wrote: post #33
kwertyoowiyop wrote: post #8

Great idea, and hopefully great results. But it’s written like LinkedIn “broetry” and that AI image at the top promises a fluffy article. Maybe expand a bit on some of the impressive tech described in the body?

The tech isn't the big news. It's the process opportunity for governments. That said, I did really like what they reported on a use case of Gemini -- they got a bunch of people to video every single process in the old systems, and then got Gemini to watch the video and write full specs for the new systems. Niiice. What you have in civil government is a lot of people and a lot of time -- turning that into inputs for a…

> they got a bunch of people to video every single process in the old systems, and then got Gemini to watch the video and write full specs for the new systems. Niiice.

Ah, that's what the AI ingredient is.

Seems reasonable, the kind of drudge work that gets avoided because nobody wants to do it. Requirements-capture what the existing system does. This often fails in the real world because it's done at some distance: either writing down what they think the system does, or want it to do, or getting political interference to pretend the process is something other than it is, but ignoring the actual working on the ground process.

Re: They Said It Would Cost $54M. We Said "No Thanks."

#54

Post by pjc50 »

bluGill wrote: post #51
pjc50 wrote: post #27

> where we identify public servants with strong technical aptitude across government, bring them into dedicated product teams > The team’s approach was straightforward. Build working software fast. Put it in front of real users early. Collect feedback. Fix things quickly. Release updates every two weeks. > That’s a 95% cost reduction. Both systems instead of one. Delivered faster. With 643 users already on the platfo…

You are missing the larger problem: it isn't a fixed capital cost you can put in the budget. Modern accounting (for some good reasons) counts different costs in different buckets. If you invest in a system, the cost should be spread out over all the years the system is in use. However if you investing long term we want to be sure it is worth the investment - there is a point where something is not worth the cost. For…

> When you put a design contract out for bids they have to go big. They have to deliver for $54M even if things are harder.

Yes - and they also have to deliver for $54m if things are much easier.

The tender process often imposes an overhead of several million $ per bid, which has to get rolled back into the margin on the projects.

Re: They Said It Would Cost $54M. We Said "No Thanks."

#55

Post by ChoGGi »

jmspamerton2 wrote: post #38

Alberta needs to leave Canada. Imagine having the profit from all of your natural resources leave the state to fund social programs that don't benefit you at all. The rest of Canada does nothing for Alberta.

I'm happy to be part of Canada, go back to whatever country you came from.

Re: They Said It Would Cost $54M. We Said "No Thanks."

#58

Post by bluGill »

pjc50 wrote: post #54
bluGill wrote: post #51

Earlier quoted context omitted.

You are missing the larger problem: it isn't a fixed capital cost you can put in the budget. Modern accounting (for some good reasons) counts different costs in different buckets. If you invest in a system, the cost should be spread out over all the years the system is in use. However if you investing long term we want to be sure it is worth the investment - there is a point where something is not worth the cost. For…

> When you put a design contract out for bids they have to go big. They have to deliver for $54M even if things are harder. Yes - and they also have to deliver for $54m if things are much easier . The tender process often imposes an overhead of several million $ per bid, which has to get rolled back into the margin on the projects.

You would be a fool to not ensure that things will go at least a little easier in even the worst case.

The other option: cost plus bids (that is you pay their actual costs plus a fixed amount of profit) is even easier to game because you can add costs in so many ways. That is why most large bids are fixed cost despite that downside - they are much harder to hide extra costs in.

There is no alternative to carefully watching your suppliers. Some are more honest than others (and you should blacklist the worst).

Re: They Said It Would Cost $54M. We Said "No Thanks."

#59

Post by em-bee »

pjc50 wrote: post #27

> where we identify public servants with strong technical aptitude across government, bring them into dedicated product teams > The team’s approach was straightforward. Build working software fast. Put it in front of real users early. Collect feedback. Fix things quickly. Release updates every two weeks. > That’s a 95% cost reduction. Both systems instead of one. Delivered faster. With 643 users already on the platfo…

more general, it's related to the ongoing struggle between private vs state owned utilities. it is not clear from the get-go which approach is better. it most often depends on the quality of the people involved.

Re: They Said It Would Cost $54M. We Said "No Thanks."

#60

Post by pjc50 »

bluGill wrote: post #58
pjc50 wrote: post #54

Earlier quoted context omitted.

> When you put a design contract out for bids they have to go big. They have to deliver for $54M even if things are harder. Yes - and they also have to deliver for $54m if things are much easier . The tender process often imposes an overhead of several million $ per bid, which has to get rolled back into the margin on the projects.

You would be a fool to not ensure that things will go at least a little easier in even the worst case. The other option: cost plus bids (that is you pay their actual costs plus a fixed amount of profit) is even easier to game because you can add costs in so many ways. That is why most large bids are fixed cost despite that downside - they are much harder to hide extra costs in. There is no alternative to carefully wa…

> There is no alternative to carefully watching your suppliers

Hence: inhouse.

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