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The ‘Rat’s Nest’ – IT and ERP Projects in Government?


July 25, 2013

What does the April Performance Report of IT Projects from the Government of North Carolina Mean?

Doug Hadden, VP Products

There is increasing anecdotal evidence that IT project failure is higher in the public sector than the private sector. The audit report about IT project performance in the Government of North Carolina was so bad that it was characterized as needing a 'rat's nest' of work to fix IT project planning problems. The results of 84 IT projects showed, on average, the actual costs were more than double the original estimates and they took 65 percent longer than planned to complete. That’s frightening when you consider that many governments in developing countries with lower IT capacity are investing heavily in IT solutions.

The audit report pointed to some major deficiencies:

  • Poor estimates
  • No independent estimates
  • Little project accountability
  • Poor project reporting

Government auditing has matured from compliance to performance. This audit covered the accuracy of estimates – of only the projects where original estimates could be found. It did not look at the actual performance of the IT solutions in meeting objectives.

Solutions to the Government Estimation Problem

We participate in government tenders worldwide. Many of these tenders are from developing countries and emerging economies. Most of these tenders are for full “turnkey” solutions where the prime vendor is responsible for meeting the schedule. This reduces the estimation gap. We have, also, experienced better success in meeting schedules than other vendors.

Some ideas that governments should consider to get better estimates and meet milestones:

  • Turnkey acquisitions where the vendor is contractually responsible for meeting the schedule
  • Software manufacturer should be part of the governance structure in the acquisition of Commercial-off-the-Shelf (COTS) software
  • Engagement with IT providers prior to the procurement cycle to get more information about project timelines
  • Use of risk management processes including risk matrix in the acquisition and implementation lifecycle to determine mitigation strategies
  • Preference for software applications that are designed for government in citizen relationship management, document management, procurement, financial and human resources
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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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