Government IT performance better than in private sector

By ROB O'NEILL

Are you ready for a shock?

After all the glaring headlines, one authoritative report says that the Government outperforms the private sector when it comes to implementing IT systems.

"No! This can't be," I hear you say.

Information Technology Projects: Performance of the New Zealand Public Sector in Perspective, a study jointly undertaken by the Simpl Group and the New Zealand Institute of Economic Research, confirms what some have long suspected - that we hear about Government failures more often than those in the private sector.

"While the results indicate that there remains significant potential to improve IT project outcomes in the New Zealand public sector, this is equally the case with IT projects in the US and in the New Zealand private sector," the researchers say.

The study establishes two definitions of success. Only 38 per cent of state sector projects met the tighter of these, that projects are delivered on time, on budget and to scope. But even less, 31 per cent, in the private sector make that grade.

Taking the broader definition, whether the project achieves organisational goals at acceptable cost within an acceptable timeframe, 88 per cent of Government IT projects are up to scratch compared with 82 per cent of private-sector projects.

So has all the fuss about Government IT performance been just a storm in a teacup?

Not quite. While a "tightly defined" success rate of 38 per cent may be ahead of international best practice, it is nothing to brag about.

IT spending has been a Bermuda triangle for taxpayers' hard-earned money. The fact it is a slightly smaller Bermuda triangle than in the private sector is of little comfort.

If you undertook a study in terms of investment lost, the results could be very different. The sheer scale of some of the failures, such as the Incis computer project for the police, have been massive.

Also, notably and perhaps oddly, the projects that spurred the commissioning of the report were not included in its survey "as they were the subject of other reviews."

Among lessons to be learned, says State Services Minister Trevor Mallard, are:

* Project risk increases with project size and duration.

* Project management skills are essential to the conduct of complex IT projects.

* Risk of failure increases with the extent of development activity.

* In almost all cases, it is sensible to avoid using leading edge but untried technology.

* Rob O'Neill is an analyst with management research company Strategic Research.