Professor outlines problems, solutions regarding information technology procurement by government agencies
by: Rene Abadie
HAMMOND – Remember the disastrous introduction of Healthcare.gov? The fatally flawed website was intended to provide an easy venue for individuals looking to sign up for the federal Affordable Care Act.
Running more than $600 million in initial costs, the website for the government-sponsored health insurance plan also known as "Obamacare" failed to meet performance expectations when launched in October. The site had to be overhauled while individuals were expected to be enrolling in health care exchanges.
That's not so unusual for large scale information technology (IT) projects, especially those launched by government agencies, says David Wyld, professor of management at Southeastern Louisiana University.
Wyld recently co-authored with Raj Sharma, chief executive officer of the Censeo Consulting Group, the report "Billions in the Balance: Removing Barriers to Competition and Driving Innovation in the Public Sector IT Market." Based in Washington, D.C., the Censeo Group works with clients to reduce operational efficiencies and improve program and supply chain performance.
The 38-page report was based on interviews with experts both within and outside the government and a thorough review of the literature and industry-specific best practices. "According to research, only about six percent of large federal IT programs succeed, while the rest wallow in cost overruns, scope expansion and schedule delays," said Wyld. "The federal government alone spends more than $80 billion each year on information technology. Our study raises questions about how IT programs are managed, how leadership and better governance can head off problems, and how we can create more meaningful competition that naturally drives innovation."
What's wrong with government IT? According to Wyld and Sharma, five main factors are to blame, including:
• No alignment on the problem or desired outcomes. "Without agreement up front, subsequent phases of a program are set up for failure," Wyld explained.
• Weak leadership or governance. Lack of consensus on the problem or on a successful outcome is often the result of senior leaders not being involved in a project from beginning to end or lacking authority to make tough decisions.
• "Check the box" culture. Wyld said government agencies are focused on compliance and fear of failure, a risk-adverse mindset that leads to lengthy delays due to multiple layers of reviews and approvals.
• Prescriptive requirements. Layers of requirements or excessive terms and conditions cause vendors not to complete the job or take a "check the box" approach simply to cover themselves instead of providing real solutions.
• Slow procurement process and closed markets. Government agencies notoriously use overly cumbersome and cautious procurement processes. Multi-year contracting processes create closed markets that act as a barrier to innovation.
"As a result," Wyld explained, "large-scale IT projects can sometimes take half a decade or more to roll out."
The authors offer several recommendations based on examples of proven successes and actions by other government agencies and business and industry.
Wyld said an initial suggestion is to establish clear lines of authority by appointing an executive in charge and a program executive with appropriate authority and expertise to make key decisions. "These two individuals must be able to engage and build trust with stakeholders and should ultimately be held accountable for results," he said.
Developing a simple needs and outcomes statement instead of generating voluminous proposals would also be helpful, he said. "More is not always better when it comes to requirements," he stated. "Proposals should clearly define need and success measures or desired outcomes."
Other recommendations include engaging the vendor market from the start so the agency can be ready for new and innovative solutions and developing a strategy allows for flexibility and doesn't lock out smaller vendors.
"We also believe some smart risk-taking is advisable," he said, "such as prioritizing the most basic needs and then evolving, even possibly using 'beta test' sites that allow for feedback from citizens and the market that can then be used to improve the site. Pilot projects allow agencies to buy small and engage in the development of prototypes where multiple solutions can be tried against each other."
Finally, the report recommends that burdensome requirements typical of government requests for proposals be significantly reduced and instead prioritize critical needs rather than listing prescriptive requirements. This would not only allow for more innovative solutions and meaningful competition, but would also speed up a traditionally slow procurement process.
"The public sector does not necessarily have to wait years for cumbersome and complex legislation to be enacted," Wyld said, "because no bill will totally solve the problems with IT program development. What is required is strong leadership, talent and a reversal of the government's natural inclination of avoiding failure at any cost. Obviously this doesn't work and has cost taxpayers hundreds of billions of dollars. It's past time to take a different approach."
The complete report can be downloaded from the following site: http://publicspendforum.org/download-billions-balance/.