It’s no secret that developing software can sometimes prove a costly process, but new software tools can enable you to achieve, faster, better or cheaper results for your business. The more value a system brings to your business over time, the more likely you are to consider a large up-front investment. However, the value over time is never guaranteed – and there are plenty of things that can go wrong in the meantime.
Here are some of the biggest software horror stories to date, and how you can avoid falling victim to the same fate.
Back in the 1980s the London Stock Exchange tried to implement an Electronic Trading Platform solution named Taurus. However, through changes in functional requirements, the project ran beyond every incremental budget. It is estimated that the London Stock Exchange lost £75 million and additional stakeholders lost in the region of £400 million, but the full final cost was not disclosed and the project was never completed.
In 1997 Sweden’s Patent and Registration Office attempted to implement a customer service and finance administration system called Bolit. This ended up running $35 million over budget, while still being too complicated and badly functioning. The agency still does not have a working IT system as the project was scrapped.
NHS Connecting for Health
In 2002, The NHS requested a system for electronic care records called NHS Connecting for Health. Costs gradually ballooned, without the system delivering the expected functionality. The project was later described by MPs as “one of the worst and most expensive contracting fiascos ever”. Officials have stated the final cost to be close to £20 billion. The project was officially disbanded in 2011.
Canada Central Government website
In 2013 Canada’s Central Government launched a project to consolidate 1,500 websites into a single portal on one platform. However, more than three years later, only 10,000 web pages of a total of 17 million had been successfully migrated. The anticipated costs quickly rose from $9.4 million to an additional $28 million – and are still ongoing.
Lessons to learn
So, how can you avoid making the same mistakes? Well, you need to be aware of the key influences impacting software spend:
The fallacy of sunk costs
Cancelling an implementation as it’s getting too expensive can be the hardest decision to make. There will always be fingers pointing at the amount invested already – and there is a temptation to try to make the most of that investment no matter what happens. However, the IT Director needs to take a pragmatic view on where the company’s funds are best spent for long-term profitability.
Sometimes the initial budget gets gradually pushed up, as new features are added throughout the process. This scenario is often referred to as “scope creep”, and it is what happened with Taurus and many other similar implementations. This can be mitigated by running Agile, dynamic software projects where continuous feedback from the client is encouraged.
Other implementations run into trouble due to internet working issues of large systems. In the case of the Canadian website project, the technical problems may or may not have been possible to predict fully, but there was most likely a lack of pre-emptive analysis done before the project launched.
In some cases, a product can be deemed obsolete before it is even fully delivered – as new developments simply overtake the technology. This happened with the BBC’s Digital Media Initiative, which was judged to be obsolete as cheaper off-the-shelf options came into existence before the project was eventually scrapped.
The progress of technology cannot always be predicted, but development teams should stay on top of emerging IT in order to recommend the best solutions for any project.
Tailored software can really open new doors for a business, but to avoid a project running over budget, or under delivering, you need to have a clear view of the emerging technologies and any potential technical issues. If a project does go in the wrong direction, or becomes too expensive, don’t just continue trying to invest, instead step back and fully evaluate whether this project will really benefit you in the long run. Keep these things in mind and your project should be a success, not a horror story.
Nick Thompson is the managing director of DCSL Software.