You may recall that I recently wrote about the apparent success of New Hampshire’s new US $90 million Medicaid Management Information System (MMIS) that went live last month after years of technical difficulties, cost overruns and delays. This was a bit of good news, given that implementations of state Medicaid/Medicare systems have a notoriously bad track record, as the project problems in Maine, Ohio and Idaho have illustrated.
Alas, the difficulty with implementing these systems was highlighted once more when late last month Tennessee announced that it was stopping work on its Vision Integration Platform (VIP) after seven years of development. According to a story in the Tennessean, the state’s Department of Human Services made only a very brief, content-free announcement about the reasons behind its termination decision on a Friday, apparently in the time-honored ploy to reduce the political impact of the news. Tennessee has had a number of high-profile IT state project problems over the past few years affecting the Department of Children’s Services, the Department of Labor and Workforce Development, as well as with the state’s attempt to implement its Project Edison payroll system.
The VIP project was to provide comprehensive automated support for Temporary Assistance for Needy Families, Food Stamps, Medicaid and TennCare, as well as other state supported programs. A February 2005 press release (pdf) from the state’s Department of Human Services said that the $37 million project would take be completed by the summer of 2008.
However, the VIP project has repeatedly missed its deadlines, with the latest being 1 April 2013. A 2012 Tennessee government audit report (pdf) blamed the missed deadlines on “defects in current designs or new functionality requirements,” the Tennessean reported. The state has spent in excess of US $20 million on the VIP project so far, and is now trying to figure out what to do next, such as to start over or to try to use what has been developed so far.
The VIP fiasco is serving to help sell Tennessee’s Governor Bill Haslam’s controversial decision announced in early April to force all of the state’s 1600 information technology workers to reapply for their jobs. Another Tennessean story says that that the purpose of the decision is to weed out “those who can’t master the skills of a rapidly changing field.” Mark Bengel, the state’s CIO said, apparently with a straight face, “This is really not about getting rid of people. It’s about making sure that we do have the skills and we have the ability to develop and retain staff in the future.”
Not surprisingly, the state is not looking at making those non-IT state managers who might be responsible for creating those new VIP functionality requirements or in the case of Project Edison, skimping on project training for staff, reapply for their jobs. That's too bad, as it would probably have a greater impact on improving future project success.
The state has hired SAIC (Science Applications International Corporation) to assess the “23 state agencies’ IT operations and analyzing the gap between the skills employees have and the ones they need,” the Tennessean says. However, most of SAIC’s recommendations won’t take effect until the 2014-15 budget year, which fortunately gives the state plenty of time to decide to also review the IT-related skills sets needed by state managers.
Tennessee isn’t the only state with IT woes. Late last month, North Carolina’s state auditor reviewed 84 IT projects and found that on average, their “actual costs were more than double the original estimates and they took 65 percent longer than planned to complete,” ComputerWorld reported. The cost overruns added up to US $356.3 million.
The 26-page audit report (pdf) makes for some interesting if not startling reading. The report states that:
“Three control weaknesses over the development of initial IT project cost and schedule estimates increase the risk that state IT projects will experience significant budget and schedule variances. First, ITS [Office of Information Technology Services] has not issued a standard practice for state agencies to follow when developing IT project estimates. Second, there are no policies in place that require an entity independent of the state agency that submits the estimate to verify that the estimate is reasonably accurate. And third, state agency managers are not required to manage IT projects so that the projects meet the initial cost or schedule estimates that are submitted to ITS.”
I love that last sentence. It is hard to call a project a failure if you aren’t required to manage to what was initially promised.
In addition, the auditor found that:
“ITS does not have procedures in place to provide reasonable assurance that the data used to oversee state IT projects is complete, accurate, and timely. For example, ITS lacks a way to identify state agency IT projects that require the State Chief Information Officer’s (SCIO) approval. Consequently, state agencies can circumvent the SCIO approval process. Another problem is that the Project Portfolio Management Tool does not retain the historical and current project information to allow for trending and analysis. Also, ITS does not have procedures in place to verify that the data state agencies enter in the Enterprise Project Management Office (EPMO) Project Portfolio Management Tool is accurate. Lastly, ITS may not have the authority it needs to ensure that state agencies submit project status reports in a timely manner.”
The auditor made all the obvious recommendations for trying to ameliorate these deficiencies (e.g., publishing written guidance for developing cost and schedule estimates, holding managers to the initial cost and schedule estimates, etc.), which the Office of Information Technology Services basically agreed with. It will be interesting to see whether any of the auditor's recommendations actually are put into place, and even if they are, whether they will be followed.
There was also word this week that Ohio Department of Taxation is having trouble with the implementation of its State Taxation Accounting and Revenue System (STARS). A story at WBNS-10TV says that the $53 million STARS effort stated in 2008 and meant to consolidate 27 different tax systems into one by 2012 is now years behind schedule. The contract was originally let to EDS for $42 million which was later taken over by HP after the purchase EDS five years ago next week.
According to the WBNS story, HP admitted to the state in 2010 that it majorly bungled the project, would basically start over with an entirely new project team and with no increase in the project’s cost. About $10 million has been spent so far on the project, WBNS reports, which doesn't seem a lot after 5 years of effort. The new project completion date is set for around 2015, if the project's schedule doesn’t slip some more.
Finally, I was pleasantly surprised to read that the state of Virginia is beginning to plan what it will do next once its ill-fated IT outsourcing contract with Northrup Grumman ends in July 2019. According to a story in the Richmond-Times Dispatch earlier this week, “State leaders face key decisions, chiefly whether to continue outsourcing the IT functions or to fold the operation back under state government control.”
You may remember that Virginia faced a number of problems with its outsourcing contract, including a massive meltdown of the state’s IT network in 2010 for which Northrup Grumman was fined $5 million by the state US . The memory of that experience appears to still be fresh, as is belated recognition of the state’s almost total dependence on IT to operate smoothly, which is why the state apparently wants all its options thoroughly explored beginning now, six years in advance of the outsourcing contract ending.
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