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

119 points by found_reading 9y ago

OliverJones 9y ago
Didn't the same company recenly foul up a contract with another sovereign government in Sweden? http://www.politico.eu/article/sweden-data-breach-privacy-security-stefan-lofven/ http://www.politico.eu/article/sweden-data-breach-privacy-se...
jlebrech 9y ago
where does someone find government contracts to bid on? you could be like the guys from War Dogs but instead of guns and ammo you trade code. How does anyone knows there's something to bid on or do they only tell IBM? In that case it's hardly IBM's fault is it.
- NeutronBoy 9y ago
  Most governments have public portals (or you have to register with your company details but it's basically open apart from that) that they post RF{I,T,Q}s on.
- paulhart 9y ago
  Most government contracts in Canada are posted to Merx[0] [0] http://www.merx.com/ http://www.merx.com/
- timthorn 9y ago
  In the EU, there's the Official Journal of the EU (OJEU) which all public sector procurements over a certain size (~£100k but varies) must be publicised in.
- fortythirteen 9y ago
  > where does someone find government contracts to bid on? The country club
- Retric 9y ago
  The government creates a Request for Proposal (RFP) listing what the government wants. Companies have some listed period that could be as short as 7 days or as long as 6 months to respond with a Proposal of work including costs. Government then reviews and picks one based on the stated criteria. This might seem like a reasonable solution, but it adds significant overhead.
  - gonzo41 9y ago
    So adding onto this, if you do a quick google for an exmaple of a government RFP. OMFG! no agile in sight. You'll be greeted with about a thousand pages of spec. This is where the big shops earn their money. They know how to grind through the paperwork.
    - stevenwoo 9y ago
      This example was from 30 years ago, but I worked on a cross platform version control system for a contractor to NASA and the documentation was enough to fill an Ikea sized bookcase of binders filled with the printed TDD on double sided paper. Of course git was created ten years later.
    - Retric 9y ago
      You find plenty of Agile in government contracting. Generally the requirements are very high level and the implementation details are after the fact. I am also aware of some huge pivots where some minor feature became the only thing the customer cared about.
  - sjg007 9y ago
    You also have to be registered in the system and some contracts are especially target to women owned, minority owned small business companies etc...
- maxxxxx 9y ago
  Most agencies have listings publicly available. It's actually not that hard to bid for a contract if you follow the rules.
- protomyth 9y ago
  In the US, you can look to the "Federal Register", but you will be digging through a lot of other stuff also. https://www.federalregister.gov/ https://www.federalregister.gov/
deleted 9y ago
[deleted]
lph 9y ago
Mind boggling. What could possibly be so complicated about a payroll system? Does anyone here have insight into this problem space?
- barkingcat 9y ago
  Differences in legal rules across jurisdictions, taxes, benefits, and contractual differences from person to person Some of the things I know of. Probably a ton other exceptions. My main takeaway is that payroll deals with people on a highly individual and highly impactful way. This is not ordering a taxi. This is stuff to do with whether you have dinner on the table or whether you can pay for your daughter's life-saving surgery. It's interfacing with the messiest, most nonlinear, and most emotional parts of human life. You cannot simply put in a rulebook into a computer and call it a day.
  - aianus 9y ago
    While getting payroll correct is definitely complex, not paying people at all is an unforgivable and inexplicable failure mode.
- kfk 9y ago
  Every business process that has run for decades is complicated. Think how much bugs have been "fixed" and how many custom little things have been built. Managing users, expectations, deliverable of such things is very complicated.
  - sidlls 9y ago
    You're right about the accretion of ad-hoc fixes over time. Some of these might be unnecessary when analysed with hindsight and need not be faithfully reproduced in a new component or system.
    - kfk 9y ago
      Sure, but go tell that to 300 angry users that used that particular useless feature for 20 years
kfk 9y ago
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 better!) than on the pure technical side.
- CupOfJava 9y ago
  IBM has no incentive to oversell: > "IBM Canada was the only company to bid on the government's pay modernization project known as Phoenix."
- ksk 9y ago
  >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. It won't make any difference if they had an inhouse team. In order to choose a competent vendor, or to hire a competent employee the management itself needs to be sufficiently tech savvy to differentiate between mediocre and good candidates.
- otakucode 9y ago
  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.
S_A_P 9y ago
Ive been on another IBM run project that started off very similarly for a large energy company. A few thoughts about this. 1) IBM pulled the same types of stunts on this project and also failed spectacularly. Its not in the news though, as private companies are reluctant to admit failure. 2) IBM and other big consulting companies pour large amounts of revenue and time into relationship management and networking. This keeps the "nobody ever got fired for hiring consulting shop x" fallacy alive and kicking. 3) There is never a large implementation that is "out of the box and turn key" If a consulting shop tells you this is possible without great sacrifice and compromise to business process, you should run the other direction. 4) IBM and other big consulting shops regularly oversell their specialty domain knowledge, and often end up farming it out to independent vendor/domain experts after they realize they're in over their head. 5) While I think IBM is a shell of its former self, their behavior here is big consulting industry standard. 6) Most private companies know that a project will largely come in way over budget, and often don't care as long as they can afford it. The overages are usually written off and as long as the operational risk is shifted away from the business then people are usually happy. As an independent consultant, Im obviously biased, but my opinion comes from experience working along side with Deloitte, IBM, PWC, and some other big consulting shops. I am usually one of a few niche independent contractors that are brought in to handle specialty items. So why does this keep happening? Most enterprises/governments do not want to place their faith in boutique consulting shops or independent consultants as this seems too risky even if they would likely be able to implement for half the money in half the time. The arbitrage for big consulting shops comes from this. Most big consulting companies are going to put 1 or 2 senior and expensive(to their own payroll) people on the project and leave the grunt work to cheaper junior onsite or offshore resources. That work is still billed at 150+ per hour and the senior folks 300+ per hour. Payroll isnt "hard" per se, its just hard to model into a single comprehensive process. Complicating this is the fact that laws and taxes vary by employee type and location. Internal business rules vary everywhere, and even though best practices exist, there is always differences from one place to another. Finally, people get really pissed when their money aint right... Ive noticed, anecdotally, that IBM in particular has had issues with big projects and variances. I chalk that up to being the relative newbie in the big consulting world, and they're likely underbidding to get a foothold.
darkstar999 9y ago
> The company was told to use "off-the-shelf" software called PeopleSoft Why didn't they just hire Oracle?
- S_A_P 9y ago
  Oracle and other vendors rarely interfere when shop brings them a deal for license revenue. If this was truly a 1 bid contract, it means that IBM likely made the sale and software selection. At that point they brought this deal to Oracle who may well have sent resources, but did not "run" the project. This is another aspect to this sort of large project. Vendors are usually hesitant to go all in with the implementation process, as it looks bad if too much revenue comes from consulting on their balance sheet vs licenses. If they derive most of their revenue from consulting and not licenses, it gives the impression that its both difficult and expensive to implement. I am willing to bet that a bullet point in the sales process is that it is easy and cheap to implement...
myth_drannon 9y ago
Another "failed" project for Canadian government, this time by Adobe. http://www.cbc.ca/news/politics/federal-government-to-downsize-failing-canada-ca-project-1.4202563 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 the client for x10 of the original budget.
- look_lookatme 9y ago
  Land and expand.
  - bdeorus 9y ago
    FIST principle: First In, Stay There
- petra 9y ago
  Is there a better way for governments to manage such processes ?
  - dastbe 9y ago
    One of the major problems (at least in the US) is that the process is heavyweight and specifically tuned towards "lowest conforming bid". You end up getting subpar work and long delays, but the government is absolutely unwilling to restart the process in almost all cases because the cost is just that large (and we picked this one because it was going to be the lowest cost!). In some ways, the government has very little control over the outcome. We've seen through things like 18f and usds that the government can adequately and effectively manage software projects itself and produce amazing results. Giving the US government more agency to self-fund ongoing development and procure solutions that are technically superior as opposed to "lowest conforming bid" is what is really needed IMO.
    - 9y ago
raesene6 9y ago
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 all the requirements of the mega-project up front, so there are lots of amendments, and as any consultant knows amendements are where you make your money as by the time they come along the client is committed to the project, so you have the advantage in negotiations. Unfortunately the litany of failed projects that follow this model, doesn't seem to deter public sector organisations from following them. I don't doubt similar things happen in the private sector, but failures in the public sector tend to be more visible.
- leejoramo 9y ago
  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.
  - otakucode 9y ago
    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'?
- afterburner 9y ago
  Being attached to an expensive project is a big plus in career development. Same as having big budgets and having lots of people under you.
- maxxxxx 9y ago
  I think the way budgeting and management works the people in charge want to have an upfront price and timeline. It would probably be better to say "let's spend $x/year over the next years and see how far we can get".
scandox 9y ago
It seems to me there is a dollar amount above which any software project must surely fail. In other words if it costs more than X, then the complexity implied is too high and the likelihood of success is too low.
- mathattack 9y ago
  Definitely an inverse relationship here. Hard to tell who is to blame here: the government or IBM. Neither has a stellar track record.
mrweasel 9y ago
>IBM Canada was the only company to bid on the government's pay modernization project If only ONE company bid on your project, then you honestly need to rethink it. Does the government really believe that IBM was the only company interested? Any project that only receive one bid should be cancelled and rethought. If your payroll regulation is so complex that only one company wants to bid, then maybe you should address that issue first. Governments are in many cases completely clueless about software and believe it's some magical sauce that once applied correctly will make up for poorly thought out and overly complex regulations introduced by the politicians. They fail to understand that the developers are required to understand the rules and procedures before they're able to implement them correctly.
- emerongi 9y ago
  It's not unusual for governments to create such project requirements that only one or two companies can bid on it. The "winning" company is known long before. Happens in all sectors.
  - thaumasiotes 9y ago
    I believe the practice is known as "single-sourcing".
bhouston 9y ago
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 generally won't find many of them in these software houses producing the run of the mill code) - cut and paste code that hard codes every option and combination. And who cares because IBM makes money every time someone asks for a change. IBM is the winner here, and everyone else is a loser.
- haecceity 9y ago
  Even $100 CAD/hr sounds way too low.
  - vkou 9y ago
    So does $5 CAD/hr. Salaries in India have grown a fair bit since the early oughts.
    - bhouston 9y ago
      Glassdoor for Indian IBM software developer: https://www.glassdoor.ca/Salary/IBM-Software-Engineer-India-Salaries-EJI_IE354.0,3_KO4,21_IL.22,27_IN115.htm?countryRedirect=true https://www.glassdoor.ca/Salary/IBM-Software-Engineer-India-... 739,759 INR = $14K CAD/year = $6.7 CAD / hr. Pretty close for a rough guess I would argue. But I was a little low.
- jguimont 9y ago
  Last time I contracted for IBM I was paid 150/h and I heard they billed 300$/h on their end to the federal government.
- throwaway_45 9y ago
  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.
jasonmaydie 9y ago
The same Canadian goverment that decided to transfer all their IT systems to one vendor Shared Services Canada which turned out to be another failed system that almost every department including statistics canada blame for delays and failures.
eljimmy 9y ago
I've worked on federal contracts for Canada for a few years in the past. It really doesn't surprise me that this happened. I saw failures on every level. The client (government), the PMs, the developers. It was mind-blowing how much incompetency was infested into the entire system. I think the problem with the public sector is that some of them genuinely don't give a shit about their work and there's really zero repercussions to them for not doing their job well. They won't get fired like someone would in the private sector. With that said, I've no doubt some of them do work hard and are comparable to their private sector counterparts. But until workers in the government can truly be held accountable, these types of IT disasters will continue to happen. Heads need to start rolling.
emersonrsantos 9y ago
Why this doesn’t seem as a technological failure but a political struggle? I can’t understand what is wrong with the system, but definitely see what’s wrong with these public servants and unions.
bitmapbrother 9y ago
IT horror stories involving IBM don't really surprise me anymore. I'm more surprised by the companies and governments they continue to game with their low ball bid tactics. I once worked with a large team from IBM that was staffed with Indians that did the work both onsite and offshore in India and it was without a doubt the worst code quality I've ever seen in my career. There were classes with 10,000+ LOC, methods with over 1000 LOC and dead unreachable code that wasn't even commented out. Speaking of comments, if it wasn't automatically generated by the IDE there would be none. But the most horrific example of their lack of attention to detail and code quality was the absolute absence of any unit tests in this massive project with millions of LOC. The only unit tests ever written were by me and those unit tests were subsequently disabled/commented out when some other developer decided it would be easier to disable the unit tests rather than to modify them to adhere to the changes they were making. It's a shame more clients don't hire independent code auditing companies to inspect the code their paying millions of dollars for.
- adekok 9y ago
  I've seen large companies do the same. Testing? Pfft.. that's for losers. Design specs? Same answer. Apparently if you spend enough on sales, you can sell utter shit to unsuspecting customers. Then, you beat up the engineering team to fix all of the bugs that the customers report.
otakucode 9y ago
Government contracts create perverse incentives. I've worked in the space for the past couple decades, and it's revolting. The government takes bids for a project - a project written in very specific ways to guarantee that only 1 or 2 companies on the planet are capable of bidding on it, usually. I wouldn't be surprised if a necessary condition of the IBM contract was intimate long-term experience with the exact system they were replacing, which was likely built and maintained by IBM. Then once the contract is going on, if the company is incompetent and can't meet their schedule - they get more money. At NO point will the government EVER dare to hold a companies feet to the fire and tell them 'you must finish this project and absorb the entire cost yourself' which is exactly what NEEDS to be done. Instead, companies are incentivized to hire the dirt cheapest labor they can because getting the job done quicker is actively harmful to their business. Then at the end of it all.. there's usually a maintenance contract to be awarded to keep the system upright and operating. The company doing the dev work is going to bid on that and have an apparent advantage (only apparent though... if they don't get it the actual technical people who matter will just go with whoever gets the contract, the contracting company will never actually relocate anyone) and the worse the system looks, the more bug-ridden and unlikely to succeed it is, the larger the maintenance contract will be. Even more incentive to build a ball of shit. Literally at every single turn, doing whatever makes the software worse is what is most profitable in that space. And eventually some news articles like this will get published, people will complain, and someone on the govenrment side of the fence will decide they want to make bringing the system in as a badge of honor in their career - so they will slash all the mandatory requirements the system doesn't yet meet and sign an agreement that whatever half-functional garbage they managed to get was a full completion of the contract. And then the executives of the contracting company go out and celebrate at an expensive bar. I once worked on the maintenance side of a system that had just been delivered. The original contract that had been granted was a single contract to develop 3 systems. 3 contracts later, 1 system was delivered. And that system required 9 months of full-time development work to be ready to be used operationally. You know what that's called? An unfettered stellar monumental magnificent success... as far as the contracting company is concerned.
muro 9y ago
Similar thing happened in Queensland,Australia. IBM is barred from bidding on contracts (actually, the government forbade anyone on awarding contracts to IBM). IBM sued and won, but the government still will ignore all IBM bids. I only wish they would be able to do more than just ignore IBM, a few stupid bureaucrats signed a bad contract cost Australia too much. Then again, working in the same way as every other bureaucracy.
bpyne 9y ago
"But when it comes to Phoenix, Aylward isn't focusing his blame on IBM. Like the procurement experts, he faults the scope of the initial contract for the resulting failure." Twenty-six years of developing software, I haven't worked on a project yet that was any better than 60% specified. This inability of people to specify, in full and in detail, what they want is the reason for the rise of Agile. A colleague of mine sagely said, "We need to show them something quickly just so they can tell us what they don't want."
- danmaz74 9y ago
  Golden words.
ninjakeyboard 9y ago
Nice work guys.
thisisit 9y ago
While we might want to talk about fallacies of a government contract, the reality is, well even software companies fall for it. Without giving much away, my ex-employer a fairly large "product" company wanted to implement a system from Peoplesoft's competitor. The management wanted to save cost which meant neither full time employee (FTE) were hired nor retrained. So they brought in IBM consultants. Once the project was over IBM left only for the company to realize they had no one to make incremental changes to the system or maintain it. They spent extra money to hire another developer and consultancy to maintain the system. Takeaways: a. This was not the first time IBM had delivered shoddy product but "low cost" was a driving factor so they get hired again and again. This is true for both private companies and government. b. Low cost also means companies don't want to hire FTEs rather make do with contractors. This creates dependency. c. It is not entirely on IBM or other consultancies but general ineptness too. People holding on to their jobs, hiring and creating messes: During the development of the aforementioned project one of the workflows fell within my team's domain. But the finance team had some "developers" who wanted to justify their salaries. They wanted to develop but had zero understanding of what do words like "standards" and "best practices" meant. I spent hours and hours arguing over why certain things should be done in a certain way. I was always told I was too uptight. In the end of module written by these "developers": a. Transmits salary for the whole company via plain text files b. If a, was not enough the text file is emailed to 60-70 people in the company who have no authorization to look at salary data. It is always maintained that without sufficient background people might not understand the salary data at all because it uses "employee ids" instead of names. So not everything was IBM's fault on the project. Currently, the salary in text is a huge security risk but no one cares. All our efforts to write a program to obfuscate data was rejected for being "too complex".
caffodian 9y ago
I hope that the USDS-inspired CDS can prevent these situations in the future, and improve the procurement requirements. https://digital.canada.ca/ https://digital.canada.ca/
alloowishus 9y ago
You would think somewhere in the contract it would specify that the payroll software, upon launching, most actually enable you to pay employees. I understand why IBM would make sure the government had some responsibility, but doesn't IBM have a responsibility to deliver something that actually works? Well, apparently not, and I'm sure if that WAS stipulated in the contract, they would never sign it. I have seen to the other side of the coin, I worked for a consulting web shop years ago where they created a bad contract worth 70K, which was at the time their biggest contract. Yay, high fives all around for the sales team. Unfortunately they ended up spending over 300k to get the system to actually work because the contract was so vague and the requirements so complex. I smell some kind of corrupt kick back shinanegans going on here, I bet you somebody in the government got a new sports car from IBM to get that contract, and to have an endless maintenance part added in (which is where they make their money).
throwaway5050 9y ago
Undoubtedly, IBM is partially at fault. However, I strongly believe that a vast majority of the blame rests on the Canadian government's managers. My thinking comes from my experience working with government. --- I work for a contractor that does the software development work for a large government entity (albeit smaller than the entire federal government of Canada). And while I have some incredible horror stories to tell, the following is particularly bad: One project was particularly bad. During the initial requirements discovery phase, it appeared like a simple CRUD app. So, my firm proposed an architecture that suited the requirements we found. However, when the government employees in charge of managing the contractors looked at it, they tacked on a few requirements and changed several requirements/fundamental assumptions. So my firm adjusted the proposal and resubmitted. The cycle repeated several times. The government managers really wanted this particular project out as quickly as possible, so my firm had started building some of the basic parts of the application (i.e. creating the database tables, importing the models/relationships into the code base, designing the UI, etc.) before the architecture was finalized. After a month with 5 engineers working on the project full-time, the managers decided to completely change the requirements altogether. So, we had to throw away everything we had made to date. That month of thrown away work costed the government $100k+ and they have literally nothing to show for it.
- HeyLaughingBoy 9y ago
  Repeat after me, class, "not properly managing Requirements is the most common cause of project failure." Been known for decades, if not centuries.
eein 9y ago
I want an install of wordpress for 500 dollars, i'll handle the hosting costs dont worry --- oh can i have a special blog template with x oh can i have a store as well, i'll pay any associated licensing fees. oh can i add a new payment processor oh can i ... why did you make me spend so much on this. I'll report to the media how awful you are. Said nobody but government.
eein 9y ago
I want an install of wordpress for 500 dollars, i'll handle the hosting costs dont worry --- oh can i have a special blog template with x oh can i have a store as well, i'll pay any associated licensing fees. oh can i have x plugin oh can i have another x plugin oh can i add a new payment processor oh can i add bitbcoin oh can i add some no-value features. why did you make me spend so much on this. I'll report to the media how awful you are. Said nobody but government. (just the above bit)
mbrodersen 9y ago
The business model of most (all?) large scale software developers is to sell the client the moon, at low cost, and then step by step make the client pay more and more for the system, until the client ends up with a very expensive, very hard to maintain system that kinda work, but requires ongoing and expensive "maintenance" work that only the large scale developer can do. It is a very lucrative business strategy. And they get away with it, because of the client decision makers often not being competent enough to make decisions about software systems development.
equalunique 9y ago
It's insanity to expect not to waste money when asking IBM to install an Oracle CRM/SCM/FMS/HRMS/EPM/ERP suite. God knows it's running on some huge SPARC or Power system with terabytes of RAM and thousands of threads. Maybe a mainframe too. It's the worse possible combination. It's practically taking the cost of IBM consultancy and the cost of Oracle software and multiplying both. Suicide.

119 points by found_reading 9y ago

Didn't the same company recenly foul up a contract with another sovereign government in Sweden? http://www.politico.eu/article/sweden-data-breach-privacy-security-stefan-lofven/ http://www.politico.eu/article/sweden-data-breach-privacy-se...

jlebrech 9y ago

where does someone find government contracts to bid on? you could be like the guys from War Dogs but instead of guns and ammo you trade code. How does anyone knows there's something to bid on or do they only tell IBM? In that case it's hardly IBM's fault is it.

NeutronBoy 9y ago
Most governments have public portals (or you have to register with your company details but it's basically open apart from that) that they post RF{I,T,Q}s on.
paulhart 9y ago
Most government contracts in Canada are posted to Merx[0] [0] http://www.merx.com/ http://www.merx.com/
timthorn 9y ago
In the EU, there's the Official Journal of the EU (OJEU) which all public sector procurements over a certain size (~£100k but varies) must be publicised in.
fortythirteen 9y ago
> where does someone find government contracts to bid on? The country club
Retric 9y ago
The government creates a Request for Proposal (RFP) listing what the government wants. Companies have some listed period that could be as short as 7 days or as long as 6 months to respond with a Proposal of work including costs. Government then reviews and picks one based on the stated criteria. This might seem like a reasonable solution, but it adds significant overhead.
- gonzo41 9y ago
  So adding onto this, if you do a quick google for an exmaple of a government RFP. OMFG! no agile in sight. You'll be greeted with about a thousand pages of spec. This is where the big shops earn their money. They know how to grind through the paperwork.
  - stevenwoo 9y ago
    This example was from 30 years ago, but I worked on a cross platform version control system for a contractor to NASA and the documentation was enough to fill an Ikea sized bookcase of binders filled with the printed TDD on double sided paper. Of course git was created ten years later.
  - Retric 9y ago
    You find plenty of Agile in government contracting. Generally the requirements are very high level and the implementation details are after the fact. I am also aware of some huge pivots where some minor feature became the only thing the customer cared about.
- sjg007 9y ago
  You also have to be registered in the system and some contracts are especially target to women owned, minority owned small business companies etc...
maxxxxx 9y ago
Most agencies have listings publicly available. It's actually not that hard to bid for a contract if you follow the rules.
protomyth 9y ago
In the US, you can look to the "Federal Register", but you will be digging through a lot of other stuff also. https://www.federalregister.gov/ https://www.federalregister.gov/

deleted 9y ago

[deleted]

lph 9y ago

Mind boggling. What could possibly be so complicated about a payroll system? Does anyone here have insight into this problem space?

barkingcat 9y ago
Differences in legal rules across jurisdictions, taxes, benefits, and contractual differences from person to person Some of the things I know of. Probably a ton other exceptions. My main takeaway is that payroll deals with people on a highly individual and highly impactful way. This is not ordering a taxi. This is stuff to do with whether you have dinner on the table or whether you can pay for your daughter's life-saving surgery. It's interfacing with the messiest, most nonlinear, and most emotional parts of human life. You cannot simply put in a rulebook into a computer and call it a day.
- aianus 9y ago
  While getting payroll correct is definitely complex, not paying people at all is an unforgivable and inexplicable failure mode.
kfk 9y ago
Every business process that has run for decades is complicated. Think how much bugs have been "fixed" and how many custom little things have been built. Managing users, expectations, deliverable of such things is very complicated.
- sidlls 9y ago
  You're right about the accretion of ad-hoc fixes over time. Some of these might be unnecessary when analysed with hindsight and need not be faithfully reproduced in a new component or system.
  - kfk 9y ago
    Sure, but go tell that to 300 angry users that used that particular useless feature for 20 years

kfk 9y ago

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 better!) than on the pure technical side.

CupOfJava 9y ago
IBM has no incentive to oversell: > "IBM Canada was the only company to bid on the government's pay modernization project known as Phoenix."
ksk 9y ago
>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. It won't make any difference if they had an inhouse team. In order to choose a competent vendor, or to hire a competent employee the management itself needs to be sufficiently tech savvy to differentiate between mediocre and good candidates.
otakucode 9y ago
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.

S_A_P 9y ago

Ive been on another IBM run project that started off very similarly for a large energy company. A few thoughts about this. 1) IBM pulled the same types of stunts on this project and also failed spectacularly. Its not in the news though, as private companies are reluctant to admit failure. 2) IBM and other big consulting companies pour large amounts of revenue and time into relationship management and networking. This keeps the "nobody ever got fired for hiring consulting shop x" fallacy alive and kicking. 3) There is never a large implementation that is "out of the box and turn key" If a consulting shop tells you this is possible without great sacrifice and compromise to business process, you should run the other direction. 4) IBM and other big consulting shops regularly oversell their specialty domain knowledge, and often end up farming it out to independent vendor/domain experts after they realize they're in over their head. 5) While I think IBM is a shell of its former self, their behavior here is big consulting industry standard. 6) Most private companies know that a project will largely come in way over budget, and often don't care as long as they can afford it. The overages are usually written off and as long as the operational risk is shifted away from the business then people are usually happy. As an independent consultant, Im obviously biased, but my opinion comes from experience working along side with Deloitte, IBM, PWC, and some other big consulting shops. I am usually one of a few niche independent contractors that are brought in to handle specialty items. So why does this keep happening? Most enterprises/governments do not want to place their faith in boutique consulting shops or independent consultants as this seems too risky even if they would likely be able to implement for half the money in half the time. The arbitrage for big consulting shops comes from this. Most big consulting companies are going to put 1 or 2 senior and expensive(to their own payroll) people on the project and leave the grunt work to cheaper junior onsite or offshore resources. That work is still billed at 150+ per hour and the senior folks 300+ per hour. Payroll isnt "hard" per se, its just hard to model into a single comprehensive process. Complicating this is the fact that laws and taxes vary by employee type and location. Internal business rules vary everywhere, and even though best practices exist, there is always differences from one place to another. Finally, people get really pissed when their money aint right... Ive noticed, anecdotally, that IBM in particular has had issues with big projects and variances. I chalk that up to being the relative newbie in the big consulting world, and they're likely underbidding to get a foothold.

darkstar999 9y ago

> The company was told to use "off-the-shelf" software called PeopleSoft Why didn't they just hire Oracle?

S_A_P 9y ago
Oracle and other vendors rarely interfere when shop brings them a deal for license revenue. If this was truly a 1 bid contract, it means that IBM likely made the sale and software selection. At that point they brought this deal to Oracle who may well have sent resources, but did not "run" the project. This is another aspect to this sort of large project. Vendors are usually hesitant to go all in with the implementation process, as it looks bad if too much revenue comes from consulting on their balance sheet vs licenses. If they derive most of their revenue from consulting and not licenses, it gives the impression that its both difficult and expensive to implement. I am willing to bet that a bullet point in the sales process is that it is easy and cheap to implement...

myth_drannon 9y ago

Another "failed" project for Canadian government, this time by Adobe. http://www.cbc.ca/news/politics/federal-government-to-downsize-failing-canada-ca-project-1.4202563 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 the client for x10 of the original budget.

look_lookatme 9y ago
Land and expand.
- bdeorus 9y ago
  FIST principle: First In, Stay There
petra 9y ago
Is there a better way for governments to manage such processes ?
- dastbe 9y ago
  One of the major problems (at least in the US) is that the process is heavyweight and specifically tuned towards "lowest conforming bid". You end up getting subpar work and long delays, but the government is absolutely unwilling to restart the process in almost all cases because the cost is just that large (and we picked this one because it was going to be the lowest cost!). In some ways, the government has very little control over the outcome. We've seen through things like 18f and usds that the government can adequately and effectively manage software projects itself and produce amazing results. Giving the US government more agency to self-fund ongoing development and procure solutions that are technically superior as opposed to "lowest conforming bid" is what is really needed IMO.
  - 9y ago

raesene6 9y ago

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 all the requirements of the mega-project up front, so there are lots of amendments, and as any consultant knows amendements are where you make your money as by the time they come along the client is committed to the project, so you have the advantage in negotiations. Unfortunately the litany of failed projects that follow this model, doesn't seem to deter public sector organisations from following them. I don't doubt similar things happen in the private sector, but failures in the public sector tend to be more visible.

leejoramo 9y ago
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.
- otakucode 9y ago
  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'?
afterburner 9y ago
Being attached to an expensive project is a big plus in career development. Same as having big budgets and having lots of people under you.
maxxxxx 9y ago
I think the way budgeting and management works the people in charge want to have an upfront price and timeline. It would probably be better to say "let's spend $x/year over the next years and see how far we can get".

scandox 9y ago

It seems to me there is a dollar amount above which any software project must surely fail. In other words if it costs more than X, then the complexity implied is too high and the likelihood of success is too low.

mathattack 9y ago
Definitely an inverse relationship here. Hard to tell who is to blame here: the government or IBM. Neither has a stellar track record.

mrweasel 9y ago

>IBM Canada was the only company to bid on the government's pay modernization project If only ONE company bid on your project, then you honestly need to rethink it. Does the government really believe that IBM was the only company interested? Any project that only receive one bid should be cancelled and rethought. If your payroll regulation is so complex that only one company wants to bid, then maybe you should address that issue first. Governments are in many cases completely clueless about software and believe it's some magical sauce that once applied correctly will make up for poorly thought out and overly complex regulations introduced by the politicians. They fail to understand that the developers are required to understand the rules and procedures before they're able to implement them correctly.

emerongi 9y ago
It's not unusual for governments to create such project requirements that only one or two companies can bid on it. The "winning" company is known long before. Happens in all sectors.
- thaumasiotes 9y ago
  I believe the practice is known as "single-sourcing".

bhouston 9y ago

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 generally won't find many of them in these software houses producing the run of the mill code) - cut and paste code that hard codes every option and combination. And who cares because IBM makes money every time someone asks for a change. IBM is the winner here, and everyone else is a loser.

haecceity 9y ago
Even $100 CAD/hr sounds way too low.
- vkou 9y ago
  So does $5 CAD/hr. Salaries in India have grown a fair bit since the early oughts.
  - bhouston 9y ago
    Glassdoor for Indian IBM software developer: https://www.glassdoor.ca/Salary/IBM-Software-Engineer-India-Salaries-EJI_IE354.0,3_KO4,21_IL.22,27_IN115.htm?countryRedirect=true https://www.glassdoor.ca/Salary/IBM-Software-Engineer-India-... 739,759 INR = $14K CAD/year = $6.7 CAD / hr. Pretty close for a rough guess I would argue. But I was a little low.
jguimont 9y ago
Last time I contracted for IBM I was paid 150/h and I heard they billed 300$/h on their end to the federal government.
throwaway_45 9y ago
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.

jasonmaydie 9y ago

The same Canadian goverment that decided to transfer all their IT systems to one vendor Shared Services Canada which turned out to be another failed system that almost every department including statistics canada blame for delays and failures.

eljimmy 9y ago

I've worked on federal contracts for Canada for a few years in the past. It really doesn't surprise me that this happened. I saw failures on every level. The client (government), the PMs, the developers. It was mind-blowing how much incompetency was infested into the entire system. I think the problem with the public sector is that some of them genuinely don't give a shit about their work and there's really zero repercussions to them for not doing their job well. They won't get fired like someone would in the private sector. With that said, I've no doubt some of them do work hard and are comparable to their private sector counterparts. But until workers in the government can truly be held accountable, these types of IT disasters will continue to happen. Heads need to start rolling.

emersonrsantos 9y ago

Why this doesn’t seem as a technological failure but a political struggle? I can’t understand what is wrong with the system, but definitely see what’s wrong with these public servants and unions.

bitmapbrother 9y ago

IT horror stories involving IBM don't really surprise me anymore. I'm more surprised by the companies and governments they continue to game with their low ball bid tactics. I once worked with a large team from IBM that was staffed with Indians that did the work both onsite and offshore in India and it was without a doubt the worst code quality I've ever seen in my career. There were classes with 10,000+ LOC, methods with over 1000 LOC and dead unreachable code that wasn't even commented out. Speaking of comments, if it wasn't automatically generated by the IDE there would be none. But the most horrific example of their lack of attention to detail and code quality was the absolute absence of any unit tests in this massive project with millions of LOC. The only unit tests ever written were by me and those unit tests were subsequently disabled/commented out when some other developer decided it would be easier to disable the unit tests rather than to modify them to adhere to the changes they were making. It's a shame more clients don't hire independent code auditing companies to inspect the code their paying millions of dollars for.

adekok 9y ago
I've seen large companies do the same. Testing? Pfft.. that's for losers. Design specs? Same answer. Apparently if you spend enough on sales, you can sell utter shit to unsuspecting customers. Then, you beat up the engineering team to fix all of the bugs that the customers report.

otakucode 9y ago

Government contracts create perverse incentives. I've worked in the space for the past couple decades, and it's revolting. The government takes bids for a project - a project written in very specific ways to guarantee that only 1 or 2 companies on the planet are capable of bidding on it, usually. I wouldn't be surprised if a necessary condition of the IBM contract was intimate long-term experience with the exact system they were replacing, which was likely built and maintained by IBM. Then once the contract is going on, if the company is incompetent and can't meet their schedule - they get more money. At NO point will the government EVER dare to hold a companies feet to the fire and tell them 'you must finish this project and absorb the entire cost yourself' which is exactly what NEEDS to be done. Instead, companies are incentivized to hire the dirt cheapest labor they can because getting the job done quicker is actively harmful to their business. Then at the end of it all.. there's usually a maintenance contract to be awarded to keep the system upright and operating. The company doing the dev work is going to bid on that and have an apparent advantage (only apparent though... if they don't get it the actual technical people who matter will just go with whoever gets the contract, the contracting company will never actually relocate anyone) and the worse the system looks, the more bug-ridden and unlikely to succeed it is, the larger the maintenance contract will be. Even more incentive to build a ball of shit. Literally at every single turn, doing whatever makes the software worse is what is most profitable in that space. And eventually some news articles like this will get published, people will complain, and someone on the govenrment side of the fence will decide they want to make bringing the system in as a badge of honor in their career - so they will slash all the mandatory requirements the system doesn't yet meet and sign an agreement that whatever half-functional garbage they managed to get was a full completion of the contract. And then the executives of the contracting company go out and celebrate at an expensive bar. I once worked on the maintenance side of a system that had just been delivered. The original contract that had been granted was a single contract to develop 3 systems. 3 contracts later, 1 system was delivered. And that system required 9 months of full-time development work to be ready to be used operationally. You know what that's called? An unfettered stellar monumental magnificent success... as far as the contracting company is concerned.

muro 9y ago

Similar thing happened in Queensland,Australia. IBM is barred from bidding on contracts (actually, the government forbade anyone on awarding contracts to IBM). IBM sued and won, but the government still will ignore all IBM bids. I only wish they would be able to do more than just ignore IBM, a few stupid bureaucrats signed a bad contract cost Australia too much. Then again, working in the same way as every other bureaucracy.

bpyne 9y ago

"But when it comes to Phoenix, Aylward isn't focusing his blame on IBM. Like the procurement experts, he faults the scope of the initial contract for the resulting failure." Twenty-six years of developing software, I haven't worked on a project yet that was any better than 60% specified. This inability of people to specify, in full and in detail, what they want is the reason for the rise of Agile. A colleague of mine sagely said, "We need to show them something quickly just so they can tell us what they don't want."

danmaz74 9y ago
Golden words.

ninjakeyboard 9y ago

Nice work guys.

thisisit 9y ago

While we might want to talk about fallacies of a government contract, the reality is, well even software companies fall for it. Without giving much away, my ex-employer a fairly large "product" company wanted to implement a system from Peoplesoft's competitor. The management wanted to save cost which meant neither full time employee (FTE) were hired nor retrained. So they brought in IBM consultants. Once the project was over IBM left only for the company to realize they had no one to make incremental changes to the system or maintain it. They spent extra money to hire another developer and consultancy to maintain the system. Takeaways: a. This was not the first time IBM had delivered shoddy product but "low cost" was a driving factor so they get hired again and again. This is true for both private companies and government. b. Low cost also means companies don't want to hire FTEs rather make do with contractors. This creates dependency. c. It is not entirely on IBM or other consultancies but general ineptness too. People holding on to their jobs, hiring and creating messes: During the development of the aforementioned project one of the workflows fell within my team's domain. But the finance team had some "developers" who wanted to justify their salaries. They wanted to develop but had zero understanding of what do words like "standards" and "best practices" meant. I spent hours and hours arguing over why certain things should be done in a certain way. I was always told I was too uptight. In the end of module written by these "developers": a. Transmits salary for the whole company via plain text files b. If a, was not enough the text file is emailed to 60-70 people in the company who have no authorization to look at salary data. It is always maintained that without sufficient background people might not understand the salary data at all because it uses "employee ids" instead of names. So not everything was IBM's fault on the project. Currently, the salary in text is a huge security risk but no one cares. All our efforts to write a program to obfuscate data was rejected for being "too complex".

caffodian 9y ago

I hope that the USDS-inspired CDS can prevent these situations in the future, and improve the procurement requirements. https://digital.canada.ca/ https://digital.canada.ca/

alloowishus 9y ago

You would think somewhere in the contract it would specify that the payroll software, upon launching, most actually enable you to pay employees. I understand why IBM would make sure the government had some responsibility, but doesn't IBM have a responsibility to deliver something that actually works? Well, apparently not, and I'm sure if that WAS stipulated in the contract, they would never sign it. I have seen to the other side of the coin, I worked for a consulting web shop years ago where they created a bad contract worth 70K, which was at the time their biggest contract. Yay, high fives all around for the sales team. Unfortunately they ended up spending over 300k to get the system to actually work because the contract was so vague and the requirements so complex. I smell some kind of corrupt kick back shinanegans going on here, I bet you somebody in the government got a new sports car from IBM to get that contract, and to have an endless maintenance part added in (which is where they make their money).

throwaway5050 9y ago

Undoubtedly, IBM is partially at fault. However, I strongly believe that a vast majority of the blame rests on the Canadian government's managers. My thinking comes from my experience working with government. --- I work for a contractor that does the software development work for a large government entity (albeit smaller than the entire federal government of Canada). And while I have some incredible horror stories to tell, the following is particularly bad: One project was particularly bad. During the initial requirements discovery phase, it appeared like a simple CRUD app. So, my firm proposed an architecture that suited the requirements we found. However, when the government employees in charge of managing the contractors looked at it, they tacked on a few requirements and changed several requirements/fundamental assumptions. So my firm adjusted the proposal and resubmitted. The cycle repeated several times. The government managers really wanted this particular project out as quickly as possible, so my firm had started building some of the basic parts of the application (i.e. creating the database tables, importing the models/relationships into the code base, designing the UI, etc.) before the architecture was finalized. After a month with 5 engineers working on the project full-time, the managers decided to completely change the requirements altogether. So, we had to throw away everything we had made to date. That month of thrown away work costed the government $100k+ and they have literally nothing to show for it.

HeyLaughingBoy 9y ago
Repeat after me, class, "not properly managing Requirements is the most common cause of project failure." Been known for decades, if not centuries.

eein 9y ago

I want an install of wordpress for 500 dollars, i'll handle the hosting costs dont worry --- oh can i have a special blog template with x oh can i have a store as well, i'll pay any associated licensing fees. oh can i add a new payment processor oh can i ... why did you make me spend so much on this. I'll report to the media how awful you are. Said nobody but government.

eein 9y ago

I want an install of wordpress for 500 dollars, i'll handle the hosting costs dont worry --- oh can i have a special blog template with x oh can i have a store as well, i'll pay any associated licensing fees. oh can i have x plugin oh can i have another x plugin oh can i add a new payment processor oh can i add bitbcoin oh can i add some no-value features. why did you make me spend so much on this. I'll report to the media how awful you are. Said nobody but government. (just the above bit)

mbrodersen 9y ago

The business model of most (all?) large scale software developers is to sell the client the moon, at low cost, and then step by step make the client pay more and more for the system, until the client ends up with a very expensive, very hard to maintain system that kinda work, but requires ongoing and expensive "maintenance" work that only the large scale developer can do. It is a very lucrative business strategy. And they get away with it, because of the client decision makers often not being competent enough to make decisions about software systems development.

equalunique 9y ago

It's insanity to expect not to waste money when asking IBM to install an Oracle CRM/SCM/FMS/HRMS/EPM/ERP suite. God knows it's running on some huge SPARC or Power system with terabytes of RAM and thousands of threads. Maybe a mainframe too. It's the worse possible combination. It's practically taking the cost of IBM consultancy and the cost of Oracle software and multiplying both. Suicide.