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March 16, 2017

Pennsylvania Sues IBM Over IT Project

Pennsylvania is suing IBM (News - Alert) for what the commonwealth says is incomplete work on an IT project that promised to upgrade its unemployment compensation system. But what’s truly interesting about this case is what it illustrates about such large engagements. That is, that only 2 percent of development projects that exceed $100 million in labor costs are on time and within budget.

That’s according to Jim Johnson, founder and chairman of Standish Group, as quoted in a recent Computerworld story.

He says the fail rate on such deals is in large part due to the lag in making decisions on the many things that require that to happen. Ideally, decisions should be made at the team level and within an hour, he said. But more often they take much longer, he said, in some cases as long as six weeks.

“Successful projects of this size are very, very rare,” said Johnson of Standish Group, which consults on and studies software project management.

Meanwhile, a 2016 story on CIO from IDG points to an Innotas survey that showed 55 percent of 126 IT professionals surveyed said they had a project fail. That was up from 32 percent two years prior.

But Tushar Patel, senior vice president of marketing at Innotas, sees the challenge quite differently.

“I have an analogy I use all the time,” Patel told CIO. “Imagine you're taking a road trip. You have 10 hours, and you can only make three stops along the way. When you arrive, you see that you've made the trip in eight hours, and you've only stopped twice. That's fantastic! Except you're in Los Angeles, and you needed to get to Seattle. That's the situation businesses get into all the time – they look at cost and process without looking at the outcome and whether or not there's any business value in these projects. They can't see the forest for the trees.”

As for the case in Pennsylvania, that involved a project that was expected to cost $110 million. However, the state says it has cost $170 million so far and is still unfinished. IBM says the claims are without merit.

Edited by Alicia Young

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