Economy Why colossal ICT projects are so difficult to control

Why colossal ICT projects are so difficult to control

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A very large IT project at the Ministry of Defense threatens to fail even before it gets off to a good start. It is not the first time: often projects take longer, they are more expensive and people are not completely satisfied afterwards. Bad news: a solution is not immediately within reach, although there are handles for organizations.

Yesterday it came out that a crucial Defense technology project has been temporarily suspended. There are also claims above the head of the ministry. If the Defense tech project actually failed, that would mean a huge blow to the government. It is a mega project, which is intended to transform the entire organization.

“We always want to build the Tower of Babel, which reaches as far as the sky,” says ICT professor at TU Delft Marijn Janssen. And there it goes wrong. “Then you have to build a lot of things at the same time, manage a lot of people. It becomes extremely complex, because everyone does a different piece.”

Noose after noose

The Defense system is not yet being built, although the award is not going well. It is not the first time that the government is in trouble with an ICT project. Less than a year ago, the plug was pulled out of the development of a NVWA system. That would cost 36 million euros, but the budget was increased to 96 million euros.

It soon became clear that the project would never be completed satisfactorily. Development stopped at 65 million euros. This also happened with the ICT project to create a new population register. The government wanted too many bells and whistles and it was feared for an extra sling of almost 250 million euros to finish it, after tens of millions had already been put into it.

Further in the swamp

In 2014, the failure of projects such as the public transport chip card, the C2000 alarm system and the Electronic Patient Dossier (EPD) led to a parliamentary investigation. This showed that the central government does not have its projects under control and that ambitions are not being realized.

“It is often the case that tens of millions have already been invested at some point,” says Janssen. “Yes, people think: if we put five million in now, we don’t have to throw the system away.” Bad news: usually a project then sinks further into a swamp.

“Estimates are bad”

Approximately 40 percent of the larger IT projects that are being outsourced are failing, according to research by the VU University Amsterdam in 2016. One of the researchers, professor of computer science Chris Verhoef, says that failure with these types of deals can almost always be attributed to a number of specific factors.

Staying within budget and deadline are not factors that determine success, Verhoef says. They are important to keep an eye on, but if you only look at the budget and deadlines, you only measure the quality of your initial assessment. “And that is usually bad,” says Verhoef.

Verhoef and his colleagues investigated thirty of these outsourced IT projects at Dutch ministries, banks, municipalities, provinces and insurers, among others. They looked at how many cases a project could be considered successful, and which factors were important if that did not work.

One of those factors is demand management: a planning method that records which services are needed. Verhoef compares it to having a new kitchen installed. “You go to the kitchen farmer, look at some cupboards and a tap, and end up with a euro or 6,000. But once the kitchen is there, all your wishes increase the chance that you have come far above that amount. “

What should happen when?

According to Verhoef, you must know exactly what the kitchen should look like. “Demand management is extremely important. The customer must be clear: what should be done why and in which order? If you take the kitchen as an example: the clearer you are about how your kitchen should look, the greater the chance that you will be afterwards are satisfied. “

Professor Janssen also notes that governments often suffer from it scope creep. “They let themselves be tempted to make a project bigger and bigger and want too much at once. It often starts as an IT project, but in the long term it becomes an organizational change project. And then you only find out along the way. That is very link. “

Stop before waste starts

Verhoef sees that things can go wrong on the supplier side. “Even if you are very clear as a customer. As a supplier of a software product you put a lot of people to work for small parts. If they don’t communicate, it will be a mess.”

In addition, Verhoef notes that – in the comparison – the tiler and the plumber should not talk to each other. “It is the job of the main contractor to coordinate that the plumber comes earlier than the tiler, so that the pipes are positioned nicely behind the tiles.”

Many factors ensure a higher bill

There you are, in your open kitchen. And what’s the smartest thing if an IT project is about a date and a budget? “If it doesn’t work out, you just have to dare to stop,” says Janssen. “Before you have wasted a lot of money.”

But Verhoef also notes that there are many factors that can make an account turn out higher. “Suppose you spend twice as long and it is twice as expensive, but the end result is much more. Is it failed then? Of course not,” he says. “But if you ask something from a developer while you do something want something completely different, then it will go wrong. ”

Four ways to spend money

According to Verhoef, there are two options that often occur and make a project much more expensive. “The question can be good, but the supplier’s estimate is very poor. Or the supplier knows exactly what it will cost, but wants to win a contract and is lower in the price. Then you see how you still get higher on the way comes out. ”

“In addition, there are more questions along the way,” says Verhoef. He refers to a theory by economist Milton Friedman, who states that there are four ways of spending money. “If you spend money from yourself to yourself, you are critical of it, but if you have to spend money from someone else, it will be a lot easier.”

The 4 Ways to Spend Money by Milton Friedman

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