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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

#81

Post by sbov »

otakucode wrote: post #71
Frondo wrote: post #59

Earlier quoted context omitted.

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, beca…

Still the problem is that when Lockheed Martin rolls in with a $350million bid, Boeing comes in with a $365 million bid, and Joe Schmoe's Web Shop shows up with a $450k bid, they dismiss Joe Schmoe as trivially worthless despite the fact he's got low overhead, had built systems exactly like what they need, and could do it quickly. LM and Boeing, on the other hand, are bumbling fools, giant towering piles of middle ma…

Part of the problem is random bureaucrats have no way of knowing if Joe Schmoe's Web Shop can actually do the job. Some of it has to also be covering your ass - if there are serious flaws in the system, your ass is covered if you spent $350 million - not so much if you spent $450k.

I have no idea how the process goes, but it seems like some sort of outside consultation on picking appropriate bids might help. Maybe even something like the congressional budget office, but for software systems. That way expertise can be concentrated and they can focus on their core competency, rather than requiring every agency to develop people who can properly analyze bids for software systems.

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

#82

Post by otakucode »

leejoramo wrote: post #38
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…

Indeed many private sector failures are never known to the public. One small city newspaper burned well over $4 million on business software this was never know to the public. The software caused the repeated delays in delivery, which was explained as a mechanical problem with the press. At the time the same paper, ran a highly critical story of the county government for a $100,000 software project over run.

Perhaps attaching a necessity of transparency to the contracts would help? Like, 'to bid you have to provide a publicly accessible full accounting of the status and progress of the project during its performance'?

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

#83

Post by thisisit »

jasode wrote: post #70
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…

>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 reas…

This is not installing Peoplesoft with customization. "Off the shelf" implies a simple install would do. Obviously it seems using a default Peoplesoft workflow is not enough.

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

#84

Post by deepnotderp »

throwaway_45 wrote: post #62
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…

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.

Because in principle free trade is better.

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

#85

Post by deepnotderp »

petra wrote: post #42
myth_drannon wrote: post #25

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…

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

If I may commit sacrilege here, I think the problem is more market based than government based. The problem in many cases is that technically incompetent people are in power who view software as a commodity and choose the lowest priced version, no matter the later problems. I'm not even sure what the solution to this is.

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

#86

Post by otakucode »

kfk wrote: post #11

The mess is probably on both sides. The issue is that management doesn't care about IT until everything breaks apart. This means IT is seen as cost and not worth the trouble to do well and keep in house. Then of course everything starts falling apart and it's easier to put the fault on the vendors. Of course IBM has its faults, but I'd guess they are more on the overselling side (we can do everything and cheaper and…

The contracting company who provides the IT people likewise views IT as a cost and not worth the trouble to do well. Only small companies give a damn about technical things. The contracting companies view their value proposition as mountains of documents, tons of forms, processes, ISO9001 certifications, etc. The people who write software or work with hardware? All they do is type. Their work isn't important in any of this.

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

#87

Post by pbecotte »

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…

In the US at least, there is a hard cutoff at a certain price point. Beyond that price point the only legal way is to run through the procurement office with all that entails- written specs, detailed contracts, long term execution, etc. Because the procurement process is so complicated, the only companies that WIN the process are those that are optimized for this (rather then, say, writing software or building roads). Often the contracting companies will not even plan on doing actual work, they only specialize in GETTING work and subcontracting it out.

The whole thing is designed to prevent some mid level beauracrat from kicking his brother in law some project for 10% more then "market rate" ... instead we pay 300% more because every project has to get rolled up into some monolithic thing that's big enough for the big contracting companies to get involved.

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

#89

Post by protomyth »

thisisit wrote: post #83
jasode wrote: post #70

Earlier quoted context omitted.

>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 reas…

This is not installing Peoplesoft with customization. "Off the shelf" implies a simple install would do. Obviously it seems using a default Peoplesoft workflow is not enough.

I'm trying to think of anybody who has used the default workflow for Peoplesoft or SAP. It seems like every project to implement them has some form of customization.

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

#90

Post by throwaway_45 »

microcolonel wrote: post #66
throwaway_45 wrote: post #62

Earlier quoted context omitted.

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 beha…

Government isn't being xenophobic. I mean there are Canadians from every country. But hiring someone in Canada keeps the money within the Canadian economy which I think is what governments should be doing. If they find some Indian guy who wants to come to Canada bring him to Canada let him do the job there let him become part of community. However if that money goes to some Indian guy in India how is it benefiting Canada?
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