Conservatively Speaking

State IT systems fail a lot; however they can work

Posted by Mary Lazich on Feb. 17, 2010

Revamping and updating state government information technology (IT) systems are quite expensive. The flip side is that the massive overhauls can save money in efficiency. However, when IT systems fail, the costs can be even greater than the savings IT systems were predicted to generate.

Stateline.org examined IT system problems in five states, including Wisconsin that Stateline reports “suffered significant difficulties and delays with six large IT contracts before it revamped its procedures three years ago.” Stateline continues, “Each of these states experienced its own unique set of problems, but in general, major state IT contracts are notoriously difficult to pull off. That’s partly because state governments don’t operate the same way as private companies, and most state managers aren’t trained to direct major IT projects.”

The ramifications are severe with 85 percent of government IT projects failing to come in on-time, on-budget or both according to Stateline. Problems run from bad contractors to faulty systems to cost-overruns.

Communication also poses a problem. Most state employees lack the expertise or background in IT lingo, making it difficult to express exact needs.

What is the answer? Stay the course, since tough fiscal times predicate that states try to attain the savings that can be derived from pairing with private companies for large IT contracts.

States must make the decision whether to upgrade their systems using the knowledge of their own technology staff or contract with private companies. When the latter is the choice, consolidation is an idea goal: shared success along with shared responsibility for problems incurred. Companies are extremely reluctant to enter into agreements with states calling for unlimited liability or performance bonds. Even so, some states require damage clauses that are more than double the contract price, citing high costs upon contract failures.

Another key to avoiding IT failure is consistent and constant contract management. Texas, one of the states reviewed by Stateline, suffered lost data and security breaches after some state agencies refused to allow their best employees to collaborate with IBM.

Stateline reports, “Wisconsin experienced similar problems. After multiple IT project failures, the state’s new Chief Information Officer Oskar Anderson put a government-wide computing project on hold in April 2008 while he retooled contract management procedures. Anderson required agencies to designate a manager for each project and insisted that an outside review board issue monthly status reports for department members with a stake in the project. Finally, Anderson established a technical review committee to ensure all state projects met established standards. Since then, Wisconsin has not had a single project failure. ‘That tells us we are either incredibly lucky or we have done something to improve our process,’ he said, ‘and I’m not that big a believer in luck’.”

Read more in Stateline.