Goldfinch presents four pathological enthusiasms and several problems of ... Looking at the papers by Goldfinch (2007) and Anthopoulos et al. (2015), an ...
Challenges & recommendations of government ICT projects in The Netherlands
Course Supervisors Due date Word count:
BPM & IT Alignment 4.4 | CASE A M. van Vliet & I. van der Weerd 15-02-2016 2605
Team 7 Pedro Da Cruz Caria Doris Degen Martijn Hermans Suzan Janssen Lisanne Sweerts
2542322 2183420 2079747 2052024 1935046
Inhoud 1. ICT projects in The Netherlands ............................................................................................................................ 2 2. Analysis of conclusions.............................................................................................................................................. 3 3. Analysis of recommendations ................................................................................................................................ 5 4. Discussion & Conclusion ........................................................................................................................................... 8 5. References ...................................................................................................................................................................... 9 Appendix 1: Sub-recommendations .......................................................................................................................11
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1. ICT projects in The Netherlands Governmental ICT projects are large and complex, and failures receive much media attention. The Dutch government spends around four to five billion euros on failing ICT projects, 36% of the projects are a total failure and 57% end up being too expensive (Deira, 2014). Research conducted in 2007 found that the failure for a certain governmental ICT project was caused by a lack of a central government (Court of Audit, 2007). In this analysis, we take a closer look at two reports that research difficulties of Dutch ICT projects that have occurred in the past. The first report is written by the Court of Audit in 2007 and the second report is written by a temporary committee of The House of Representatives between 2012 and 2014. These two reports identify major causes of the failures and provide recommendations for improvement. The key finding of these studies is that the Dutch government can improve much more in terms of ICT projects and its management. The Court of Audit in 2007 argues that ICT projects are often too ambitious and too complex because of the combination of political, organizational, and technical factors. Due to this complexity, a project often lacks balance between the ambitions and available resources, be it human, financial, or temporal. The Court of Audit suggests to reduce complexity by starting out small and to continue the project in small steps (Court of Audit 2007, p.20). It is also recommended to divide the project into smaller, more controllable subsidiary projects, effectively reducing complexity. To manage a project efficiently, a minister needs the correct information as he or she has an important voice in the political decision-making process. It is therefore important to strengthen the minister's position, ‘since he is the key to break out of the spiral in which projects become too complex’ (Court of Audit, 2007, p. 27). In this case report, the challenges of governmental ICT projects are first discussed. Based on this discussion, we conclude with a review of the recommendations of The House of Representatives, which are analyzed and tailored using academic literature to fit the needs of the Dutch government, and with our own vision on the management of these ICT projects.
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2. Analysis of conclusions Through the theoretical approaches of Anthopoulos, Reddick, Giannakidou and Mavridis (2015), and Goldfinch (2007), the practical case study by the House of Representatives (2014) is analyzed and critiqued through an academic lens. In a large study on the United States e-government project of the Healthcare.gov website, Anthopoulos et al. (2015) focus on what caused a large scale project like this to fail. By examining media sources and thoroughly analyzing data of Twitter discussions, the two top failure reasons were found: ambiguous mission statements and poor project management. Goldfinch presents four pathological enthusiasms and several problems of control. Most notably, the House of Representatives expresses its concern on the lack of control the Dutch Government has on ICT projects. Said projects are found difficult to manage as it is difficult to know whether everything goes well until it has gone irreversibly wrong (Goldfinch, 2007). This challenge is exacerbated by the difficulty of finding the right responsible actor for mistakes, since so many actors are involved (Goldfinch, 2007). Even when problems are known and one or multiple actors can be held accountable, there is a possibility that the failing project will not be ended. Whether it is being deaf to bad news, or having a lack of knowledge, the money invested may sink along with the project if it has been decided that the project will not be cut off (Goldfinch, 2007). Failing to end the project timely, be it due to bad time or resource control (Anthopoulos et al, 2015), will only result in greater overall failure. The governance for ICT projects is poorly structured, the House of Representatives concludes, which is in line with failure factor ‘Organizational power’ given by Anthopoulos et. al. (2015, p.4). Given the intangible nature of software development, as well as the complexity and dynamic nature of software projects, good management is extremely difficult. Adding to this difficulty is that large projects often involve a vast number of different contributors who may even be geographically dispersed (Smith, Keil, & Depledge, 2001). The ability to manage large scale projects involving aforementioned challenges takes a great amount of management skills, knowledge and training. These management skills, knowledge and training are described by Goldfinch (2007) as critical factors in IS disasters. Anthopoulos et al. (2015, p. 4) also state the following factors which may cause projects to fail, and which are in line with these issues: ‘inefficient risk analysis and management; unsuccessful monitoring and measurement’. Another classic mistake (Carr, 2003), also identified by the House of Representatives, is the unbridled enthusiasm for ICT and seeing it as the solution to every problem. Opposing this, when policy measures are demanded, it often goes without the realization that ICT is almost always 3
needed in order to implement said policies. When delivery of such a project is promised, without first checking whether it is technically feasible, complications are imminent. Goldfinch (2007) raises the subject in one of the four pathological enthusiasms. Focusing on idolization, when public servants get carried away by the excitement of a project, they provide reports and projections pointing towards the benefits instead of being balanced and critical (Dale & Goldfinch, 2002). Such an unbalanced view of a project may be due to workers missing skills to assess the possibility of success or failure of the project, or due to execution issues such as misinformation in terms of costs overruns, which are all also project failure reasons or factors (Anthopoulos et al., 2015) . Similar to the described enthusiasm of lomanism (Goldfinch, 2007, p. 921), the Dutch government has a kind of misplaced arrogance that they know what is best for the market, despite its inadequate knowledge. The House of Representatives claims that the government takes an immature stance and does not allow for the suppliers’ input regarding solutions or ideas. This is surely a political issue, where education also comes into play as a project failure factor (Anthopoulos et al., 2015). Looking at the papers by Goldfinch (2007) and Anthopoulos et al. (2015), an interesting conclusion is that issues with governmental ICT projects fail not only for technical reasons, but mainly through the lack of the appropriate managerial skills. Whereas Anthopoulos et al. (2015) only have developed a descriptive taxonomy which can be used after a project has failed, Goldfinch (2007) takes a more proactive stance in prescribing and caution for certain enthusiasms. Anthopoulos et al. (2015) is therefore more useful to assess projects after the damage has been done and take the reasons and factors into account for future projects, as a kind of “lessons learned”. However, the four enthusiasms of Goldfinch (2007) are more useful before and during project execution to prevent failure from happening by taking a cautious stance by heeding for these enthusiasms.
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3. Analysis of recommendations In this chapter the recommendations provided by the Temporary Committee on Government ICT Projects are critically reviewed. Although, the conclusions and recommendations drafted by the committee are interlinked with each other, three major themes are identified: (1) Responsibility, Project Management & Project Costs, (2) Organizational Power and (3) Education. Responsibility, Project Management & Project Costs Responsibility of the ICT projects and its management, while project management as pointed out by Anthopoulos et. al. (2015, p.4) is described as “the creation of a timeline, definitions of requirements and scope, risk analysis and management and monitoring and measurement”. The BIT, as a temporary ICT authority, can play an important role in creating stability when developing ICT projects in turbulent political climates. The BIT can ensure intended project execution, maximizing the chance of projects meeting strategic, time, and financial goals, independent of political changes. Increasing ICT awareness among ministers and using the available information to a larger extent will improve project quality. We agree with the recommendation to take this one step further: installing a minister for ICT with the next governmental formation, acting as a bridge between the different departments, and is accountable for the end result. This decreases the diffusion of responsibility problems (Couzy, 2016; Wallach, Kogan & Bem, 1964), agreeing with Goldfinch (2007) who notes the difficulty of finding the responsible actor. The minister also has the task to inform the House of Representatives and the minister is, like the cabinet, controlled by the House of Representatives. The government is insufficiently aware of the costs and benefits of its ICT projects. Being aware of the costs is the step before ICT project costs can be maintained and lowered. Benschop (2014) estimates that the government ‘spills’ 1 to 5 billion euros on failed ICT projects. However, nobody knows exactly how much the Dutch (sub-)government spends on ICT projects, therefore failure costs can be kept behind the curtains. To measure effectivity of the BIT and eventually the IT minister, transparency of allocated funds of ICT projects is crucial. Several report recommendations discussed the awareness of the costs of ICT projects, concerning Project Management, BIT, education, and knowledge. Both the procurement process and contract management highly influence the costs of ICT projects, as stated by the report. Recommendations are stated concerning more consulting various experts during the procurement process and drafting up the contracts. Several governmental ICT-researchers, as stated in the article by de Haes (2014), identify the lack of 5
knowledge of the government about ICT as part of the problem. The principal (the government) has problems to create the incentive that the agent (software deliverer) acts in the advantage of the principal. The agent has an information and knowledge advantage and could use that advantage most of the times to its own advantage when procuring tender offers and designing contracts. One of the ways to deal with this issue is to include past performances. Moreover, various new European legislation regarding the procurement process which is activated in 2016 gives room to include the valuation of past performance. This is a very welcome development as the previous legislation is not constraining the government anymore. Another conclusion made by the House of Representatives is that ICT project management is weak. Managerial faddism maybe a reason for projects to fail (Goldfinch, 2007), thus ICT project management should be improved. Anthopoulos et al. (2015) agree that weak ICT project management is one of the core reasons governmental ICT projects fail, thus all of the recommendations given by The House of Representatives regarding this topic should be taken into account. Organizational Power Organizational power can be described as “organization structure and relations” (Anthopoulos et. al., 2015, p.4) and affects the different governmental departments. The Temporary Committee implies that the government lacks the ability to learn from its mistakes; ergo, a change of mentality is needed to recognize and accept mistakes. Recognizing small mistakes, since they are presented as early warning signs, is a valuable skill (Cannon & Edmondson, 2005). Both technical and social systems are key aspects for improving learning from failure. Managerial thinking should be reframed, since managers seize opportunities, craft skills, and build routines, structures and incentives - all crucial elements for project management. Additionally, let psychological and interpersonal barriers be tackled to break the tradition of humans distancing themselves from failure. ‘Refraining failure to being associated with risk and improvement is a critical first step on the learning journey’ (Cannon & Edmondson, 2005, p.317). Education The term knowledge describes: knowledge of complexness of ICT, the ability to learn from previous ICT projects and ‘appropriate skills for project operation and acceptance, as well as execution of training activities’ (Anthopoulos et. al., 2015, p.4).
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Adequate knowledge of ICT is important to take into account since inadequate education is a failure factor for e-government ICT projects (Anthopoulos et al., 2015; Nawi, Rahman, & Ibrahim, 2011). The reported recommendations regarding this subject are especially relevant since not only principals and project leaders, but also civil servants should be ICT experts to avoid project failure. Additionally, ensuring the interests of the market is important, as it is mentioned that the needs of the end-user are often forgotten. Management should ensure that no relevant information is withheld to ensure the process is smooth and can continue. Without sufficient ICT knowledge, it becomes difficult to perform work in a satisfactory manner. It is the role of management to ensure proper training programs if necessary and implement jargon standards. Synthesis Whereas the reported recommendations following conclusion one, two, and three are clear, the recommendations accompanying conclusion 4 seem rather confusing. This conclusion states that the structures for ICT projects are very poor. The creation of an ICT minister position is suggested. However, the committee is not clear about responsibility and accountability, in subrecommendation 11 until 13 (see appendix 1). The committee also argues for “single ministers” who should be responsible for important ICT projects and for empowering ministerial CIOs. What are the relationships between their responsibilities and the ICT minister’s? Since this is a mentioned issue, this should be made more specific to provide useful guidelines. As for continuously gathering information, is this a task to be done by the BIT or by one of the other ICTrelated positions? The diffusion of responsibility should be prevented to mitigate the potential negative effects as experienced before. As for all recommendations regarding the gathering and visualization of information, the ICT minister and its department should organize this. They should know from whom to retrieve the information, analyze the costs and benefits, and distribute the information to all involved parties. Being responsible for these projects also means that this ministry should keep track of the process and start exit procedures when necessary.
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4. Discussion & Conclusion The challenges that arise in the report of the House of Representatives are anything but unique, as they are all described in academic papers. Seeing as there is not so much a technical issue but more a managerial issue at play, the Dutch government should not only appoint an endresponsible party. Moreover it should also focus on the managerial style of the responsible party, to exert leadership and guide the project. Appointing a new minister does not automatically fix the issues; it can be argued that in every governmental ministry project architects need to be trained and need to have a holistic approach when managing ICT projects. The new ICT minister is eventually responsible for the ICT projects and for the various project architects. Although we agree on most of the things mentioned by the Committee, we believe their recommendations for the future are too short-sighted. The Netherlands with its politics is not a secluded entity. The Netherlands is an active part of Europe, a continent that has been integrating more and more over the past decades and will tend to do so in the future. Although there are negative opinions on integration as well, it is likely that European countries will extend their collaborations for security, defense, and trade, and possibly ICT (J. Techau, 2016). For example, the new European legislation for ICT project procurement. What would the consequences be for our ICT projects when countries are going to collaborate more, within the European Union but also outside these boundaries? If governments are already incapable of coping with the challenges of implementing nation-wide systems, how are they going to integrate ICT systems of different countries? Who decides on ICT strategies and who would take the responsibility for the completion of these projects? Since these projects are executed on an even larger scale, would this then also mean bigger losses in case projects fail?
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5. References Anthopoulos, L., Reddick, C. G., Giannakidou, I., & Mavridis, N. (2015). Why e-government projects fail: An analysis of the Healthcare.gov website. Government Information Quarterly, in press. Benschop, L. (2014). Overheid verspilt jaarlijks 1 tot 5 miljard door ICT-projecten. Retrieved February 13, 2016 from: http://www.nu.nl/politiek/3903779/overheid-verspilt-jaarlijks1-5-miljard-ict-projecten.html. Cannon, M. D., & Edmondson, A. C. (2005). Failing to learn and learning to fail (intelligently): How great organizations put failure to work to innovate and improve. Long Range Planning, 38(3), 299-319. Carr, N.G. (2003). IT Doesn’t Matter. Harvard Business Review, Vol 81, No. 5, pp. 41-49 Court of Audit (2007). Lessons Learned from Government ICT Projects. Couzy, F. (2016, January 10). Kabinet heeft minister van ICT nodig. Retrieved February 15, 2016, from http://fd.nl/economie-politiek/1134298/kabinet-heeft-minister-van-ictnodig. Dale, T., & Goldfinch, S. (2002). Pessimism as an information system management tool in the public sector: lessons from the INCIS fiasco in the New Zealand Police Force. De Haes, A. (2014, October 14). ICT-falen begint bij het aanbesteden. Retrieved February 15, 2016, from: http://computerworld.nl/development/84165-ict-falen-begint-bij-hetaanbesteden Deira, S. (2014). Overheid verspilt miljarden euro’s aan mislukte ICT-projecten. Elsevier. Retrieved February 14, 2016 from: http://www.elsevier.nl/Economie/nieuws/2014/ 4/Overheid-verspilt-miljarden-euros-aan-mislukte-ICT-projecten-1509910W/. Goldfinch, S. (2007). Pessimism, computer failure, and information systems development in the public sector. Public Administration Review, 67(5), 917-929. House of Representatives (2014). Conclusions and recommendations of the Dutch temporary committee on government ICT projects. Karau, S. J., & Williams, K. D. (1993). Social loafing: A meta-analytic review and theoretical integration. Journal of personality and social psychology,65(4), 681. Nawi, H. S. A., Rahman, A. A., & Ibrahim, O. (2011, November). Government's ICT project failure factors: A revisit. In Research and Innovation in Information Systems (ICRIIS), 2011 International Conference on (pp. 1-6). IEEE.
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Smith, H. J., & Mark Keil, G. D. (2001). Keeping mum as the project goes under: Toward an explanatory model. Journal of Management Information Systems, 18(2), 189-227. Techau, J. (2016, January 12). Four Predictions on the Future of Europe. Retrieved February 15, 2016, from http://carnegieeurope.eu/strategiceurope/?fa=62445 Wallach, M. A., Kogan, N., & Bem, D. J. (1964). Diffusion of responsibility and level of risk taking in groups. The Journal of Abnormal and Social Psychology,68(3), 263.
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Appendix 1: Sub-recommendations In summary, the Committee of The House of Representatives recommends the following: 1. Establish a temporary ICT authority to act as a project gatekeeper: the BIT (Bureau ICTtoetsing). 2. The House of Representatives should include in its Rules of Procedure the provision that, at the request of a member, the BIT assesses motions and bills. 3. The House should increase its ICT awareness, for example by including ICT in the induction programme for new MPs and maintaining regular contact with the BIT. 4. The House should make more use of existing tools like the Major Projects Scheme (Regeling Grote Projecten), and take action based on this more extensive supply of information. 5. From now on the Cabinet should explicitly consider ICT in its decision-making processes, in a structural manner, weighing up the possible consequences and risks of its decisions from that perspective. 6. The government should introduce more central management of its ICT policy, among other things by appointing a single minister responsible for policy concerning ICT project management. 7. The national government CIO should be given more authority, including decisive powers over the implementation of general ICT policy. 8. The cost savings and societal benefits of ICT policy in general must be made visible. 9. The government should take steps to ensure that its “comply or explain” policy in respect of open source software and open standards is observed. 10. Continue the centralization of ICT procurement and government-wide ICT facilities. 11. Clearly define roles and responsibilities within all government ICT projects, including those at executive agencies. A single minister should always be responsible for any ICT project in which there is a major public interest. 12. The ministerial CIOs should give greater priority to managing ICT projects and should be granted more decisive powers. 13. The quality of information in the annual reports on large and high-risk ICT projects should be improved. Ensure that the Government ICT Dashboard contains useful information as soon as possible. 14. The government should continually and consistently gather and analyse information on as many ICT projects as possible, and project managements should make use of any patterns found. 15. The government should ensure that it is able to set effective priorities for all its ICT projects. 16. The business case should be used not only at the start of a project, but throughout the entire course of the project. 17. Introduce a compulsory initial test for projects worth more than €5 million with a significant ICT component. 18. Ensure an annual overview of government ICT costs is issued. 19. Ensure the government employs enough ICT experts. 20. Introduce a centralized, structural ICT education programme for principals and project leaders within government. 21. Make ICT a permanent component in the internal training for all civil servants. 22. The ministerial CIO should ensure that roles and responsibilities are clearly understood. 23. The government should ensure it is in the interests of all involved that a project reach a successful conclusion.
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24. Those implementing the project and every layer of management should provide their senior officials and managers with realistic information concerning its progress. 25. Make it a requirement of government human resource policy that officials have sufficient ICT knowledge to perform their work. 26. The government is always to consult the market before and/or during procurement processes, on the basis of a “comply or explain” policy. 27. Make functional procurement compulsory and subject to a “comply or explain” rule. 28. From now on, a supplier’s past performance should be taken into account when evaluating tenders. 29. Draw up a code of conduct for ICT suppliers, which includes definitions of what it means to be a good principal and a good contractor, as well as the associated duty of care. 30. Make better use of the existing opportunities offered by the Public Procurement Act. 31. The ministerial CIO should ensure that the government adopt a more professional and engaged position as the principal in ICT projects. 32. The government should avoid additional work and the use of hourly rates, turning any perverse incentives into positive incentives. 33. Contracts should always include exit clauses and procedures for changes to the project. 34. Make sure that contracts are not forgotten after they are signed, but are actually used throughout the project. Legal proceedings in the event of a default should be regarded as a normal course of action.
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