Friday 18 March 2011

Government IT projects and managing risk

I’ve been trying to watch / listen to the witness sessions of the Commons Select Committee on the “Use of IT” that have been taking place over the last two weeks. The strongest theme that I detect in these sessions is the bemusement that past governments and past projects have failed to address the issues.

One word that keeps on coming up in the discussions is ‘agile’. As always there are many explanations of what it is and I can’t help but feel that none of the explanations seem to provide the select committee with the eureka moment that people need to understand what it means and why it is different from the status quo. I wonder whether an explanation in terms of the management of risk might help a little.

Agile project management and the management of risk

For the sake of understanding what agile means, particularly from the perspective of management and strategy, let’s consider IT projects and the management of risk.

There is a strong tradition in some areas of management that says that management is about control. In other words, a well managed project is a project that is well defined, fully costed and running to plan. If a project fails, then the response is that the project was not controlled enough; it was not properly defined at the beginning; it was not properly monitored throughout; it was poorly costed and lacked strong management.

This view of management has been the driving force for many standards and methodologies that government has adopted over the years to keep projects in check and ‘ensure value for money’. But as we all know, history shows that, in a lot of cases, this simply hasn’t worked.

In reality, so called government ‘IT projects’ are often massive ‘change projects with an IT element’. These projects are massively complex and inherently highly risky. Just like risk in the financial markets that risk can be managed, but however it is packaged up and hidden away it will not go away.

Let’s take this analogy of financial investment a little further. Imagine that you are given some money to invest in equity in an area of the market that is highly risky but has the prospect of significant returns. Do you:

  1. Invest all you money in one company, locking yourself into an agreement that prevents you from selling your investment for five years; or

  2. Spread your risk across a number of companies, ensuring that you can sell your investment at any time and re-invest it somewhere else if the market changes or you realise that you made the wrong decision in the first place.

Now, imagine that, for some bizarre reason, you take the first option and you invest everything in one company. Would you reduce your risk if you took two years to decide which company to invest in and you ask each company to set aside a considerable period of time and resource in making detailed projections of where the company would be in five years time?

Okay, I hope it’s clear to see that this analogy bears remarkable resemblance to the traditional government approach to contracting out IT projects. I also hope it is clear that, when seen as a task of managing risk, the second option is clearly the way to go.

The second option is, in effect, the ‘agile’ approach. You diversify your risk and you reduce your risk by simplifying a big problem into a large number of smaller problems. You push against those who say that a project is inherently large and find ways of building a small working part of it very quickly. You push against those who say that everything needs to be produced by one company or team and use existing open standards as a way of guaranteeing interoperability. In this way you prevent ‘lock-in’, you open up projects to a much larger number of smaller development teams, and you encourage cooperation, experimentation and innovation.

I hope, for a few people, this explanation might help to bring a better understanding of some of the problems of government IT projects and why an open and ‘iterative’ (under whatever name) approach is crucial if government is to manage its risks and deliver the real potent for a huge return.

Friday 11 March 2011

Written evidence to the Commons Select Committee on the Use of IT

A number of recent articles have drawn my attention to the Commons Select Committee on the “Use of IT” which apparently started an inquiry today, but then again the web site said that yesterday too!

I’ve always had a very keen interest in the effective use of technology in the public sector, so I couldn’t help take a look at the subjects it was looking into and the written evidence it has received. Unfortunately, so far (and I’m only on page 15!), the evidence seems to reinforce the reasons why successive Governments seem to be so fundamentally unable to use IT effectively. The reason I say this, is that the evidence I have read so far demonstrates the massive diversity and contradictory nature of the advice they receive.

In this first blog on the subject I’ll touch on the suitability of management and delegation out of the public sector. I’m fairly sure there will be more posts to come on this who subject!

Suitable management

One theme that is already coming through in the first 5 submissions is the theme of control. Are the management suitably qualified to manage the projects:

Management of the Public bodies is at all levels recruited mostly from non-IT backgrounds. Typically the managers possess long experience of the needs of the Organisation, but not of the issues raised by the development of an IT system. This leads them to make errors of judgement on IT policy.

I think the background of the management is probably a bit of a red herring, but it is absolutely true that a manager of an IT project must posses the skills and knowledge to be able to manage the project and take control. A common characteristic of management of failing IT projects is the complete reliance they have on the guidance and work of staff and consultants below them. The best manager of an IT project is the manager who can, if she needs to, listen and talk knowledgeably and meaningfully with the ‘shop floor’ IT staff doing the work and with ‘shop floor’ public sector staff who trying to use it. This is not about a public relations exercise of having top management ‘come down and talk to the workers’ this is fundamentally about whether the manager in charge has the knowledge to understand the problem and talk the language of the people who are implementing it both on the side of the technology and on the side of operations and change management.


Closely related to this issue of management is the issue of where you place responsibility.

There are many politically motivated reasons for deciding whether public projects should be carried out within government or in the private sector or even in the voluntary sector. However, ultimately whilst this can have a significant impact on the way in which the work is carried, it doesn’t address the fundamental issues of why IT projects succeed or fail.

This quote from one of the submissions is a perfect example of this misunderstanding:

Government already has a model for a highly successful, cost free, technology implementation that has reached 80% of the UK population. It is the National Lottery. The technology is complex, secure and costly. It cost the taxpayer nothing because government intelligently pulled the levers that shaped an opportunity the private sector would fund.

Here the success of this project is attributed to the government distancing itself both managerially and financially from the risks of implementing an IT project. But in reality this project possess very few of the fundamentally difficult characteristics which government normally has to deal with in IT projects:

  1. This was nothing new. The UK was implementing a National Lottery on the heals of many other nations who had done this before. There are few areas of public sector IT which fit so neatly

  2. This was a perfect example of the large scale delivery of a standardised product. The National Lottery was not an IT project to modernise hundreds if not thousands of previous lotteries scattered around the country and carried out in their own unique ways in circumstances which were also very different regionally. The National Lottery was a blank sheet of paper with the opportunity to implement the best, cheapest, most effective solution and to effectively impose it consistently across the country.

  3. The requirements were relatively easy to define. Ongoing success was easy to measure. Ongoing success and incentives were aligned with ongoing government requirements.

In short, the current government may well have it’s own political view on who should carry out IT projects, but this decision should not be confused with the real issues of making projects work. If the government decides to pass responsibility to the private sector or even the voluntary (should we call it ‘open source’) sector, it will nevertheless remain responsible for the end result. Ultimately the Government must either take control or loose control.

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