Oliver Olsen, the once and (perhaps) future State Representative from southern Vermont, recently wrote an essay entitled “Why IT projects fail.” It was, more specifically, about why state-contracted IT projects fail.
Olsen began with the question, why can’t we bulid a software system when we manage to build large-scale complicated stuff like highways, bridges, and suchlike. His explanation: while the basics of civil engineering have been in place for quite a while, the world of high technology is young and ever-changing. And it’s harder to deal with the intangible world of IT than with the steel-and-concrete world of construction.
Good enough, as far as it goes, and I recommend reading the piece.
But I’d add one big factor that no one else seems to have noticed.
One of the problems throughout the history of the Affordable Care Act and Vermont Health Connect is a lack of competition for IT contracts. CGI was the big dog, by a long shot. Vermont chose CGI in large part because it had won so many other ACA contracts that it seemed the clear choice. Turned out, of course, that CGI wasn’t really up to the job. And when Vermont went to find a replacement, the only real choice was Optum, upon which our hopes are now pinned.
So the question: Computers and software are huge growth industries, and the US excels at both. Why can’t we get more, and smarter, companies to bid for health care exchange contracts?
I’d turn that question around: why are so many high-tech companies staying away?
Could it be because public-sector projects are complicated, fraught with peril, and more likely to yield failure than success?
Just looking at how the market moves, I have to conclude that it’s a lot more profitable to build newfangled gadgets, computer games, and smartphone apps. And the cost of failure is a whole lot lower: you put out a device or a game or an app. If it fails, you move on to the next one and write off the development costs. If you’re trying to build a health care exchange, you’d better damn well get it right. You can’t just walk away in the middle, and you can’t unilaterally postpone the launch.
Also, whereas a game or an app is pretty much a stand-alone item (as long as it plays nice with the operating system), public-sector IT projects are complicated systems that have to interface with other complicated systems.
There are lots of things IT experts can do that are higher-return and lower-risk than public-sector IT projects. Which is why most of them stay away from the business, and the public sector is left with a relative handful of bidders.
And somehow I doubt that those bidders represent the best and the brightest of the IT world.