Why Dutch governmental ICT projects fail

Quite frequently, articles appear in the Dutch press about problematic ICT projects of Dutch governmental bodies. Budgets that get seriously out of hand, time schedules that are exceeded by years, products that do not meet expectations. Recent examples of projects that can be characterized as very problematic are the SPEER project for the Dutch ministry of Defense (estimates of expenses on this project go as high as 1 billion euros, the project should be finished in 2009, is still going on, and there are still no deliverables that meet expectations), and the OV chipcard (a system for electronic registration and payment for all public transport in the Netherlands, the project needed a very long time to release the actual product and get people to use it, it still suffers from security issues and a low customer satisfaction level).

In 2014 a parliamentarian inquiry about Dutch governmental ICT projects has been carried out. I’d like to highlight two things that can be read in the final report (you can download the whole report here):

  • Estimates (by IT experts) of yearly losses due to failing governmental ICT projects in the Netherlands reach as high as several billions of euros. This would correspond to up to 1% of Dutch GDP, or several hundreds of euros per year per Dutch inhabitant. According to these estimates, the problem could be called considerable. It has to be mentioned that the estimates of the losses vary a lot, apparently it is not easy to make these estimates.

  • International research shows that for governmental ICT projects (world wide) with a budget higher than 10 million dollar the success rate (successful being defined as within budget and time schedule) is 7%. 36% of these projects fails completely (system never released). Apparently, it does not seem to be an exclusive Dutch problem.

So why would this be? In the report of the parliamentarian inquiry (219 pages) many reasons, problems, and suggestions for improvement are described. But what is the bottom line? I thought about it, and came to these points:

Large ICT projects are difficult in general

In a previous post I explained why software development (habitually an important component in ICT projects) is often underestimated regarding complexity and risk for failure. Complexity and risks correlate strongly with project size. Governmental ICT projects are among the largest ICT projects you’ll find. The amount of end users is huge, as is the amount of processes the project should serve, resulting in large amounts of requirements for the ICT project. Governmental organizational, technical and financial structures are also very complex, which makes it very difficult to carry out ICT projects: they usually involve several governmental departments or organizational units.

Governmental ICT projects tend to be custom made

An important characteristic of especially the ambitious governmental ICT projects (I mentioned a few in the introduction) is the fact that the system that should result from it, is quite unique. It’s not a ready-to-go out-of-the-box type of solution. The project has to deal with some very specific requirements, that apparently cannot be addressed by proven or existing technology. So at least part of the project needs a custom made solution. New software or technology is developed especially for this project. However, this creates two risks:

  • The risk that the newly developed technology is not (at least initially) adequate. This is not unusual for new technologies in general: they tend to have many teething problems, and it takes a long time before they become stable and sufficiently advanced to meet user’s expectations and needs.

  • Dependency on the supplier of the newly developed technology. Especially for knowledge intensive technology like software, this is a major risk. In case the supplier does not deliver up to expectations, there’s no easy alternative. In ICT it’s not unusual that suppliers take advantage of this dependency, resulting in large profits for the supplier, and out of control budgets and product quality for the client.

Governmental ICT projects are subject to political decisions and influences

In my opinion, ICT projects, to become successful, need a stable environment, well defined working procedures and project organization, together with firm leadership to defend it. The world of politics is not exactly an environment that can be characterized as such. In politics decisions (including policy making) are not always based on sound knowledge, insights or vision. Many times, the result of a political discussion is some kind of compromise, satisfying all stakeholders, but not necessarily the best decision for a pragmatic project like an ICT project.

The Dutch situation

So far my reasons for failing governmental ICT projects anywhere on earth. However, it’s my personal opinion that in the Netherlands, with a very fragmented political landscape (no less than 17 political parties are represented in the Dutch parliament, senate or European parliament!), and a political culture of participation and deliberation, there is a high risk of starting overly ambitious ICT projects, based on complicated political compromises.
Besides, the Netherlands is a small country with a dense population, with an intrinsic need for organizing and regulating things, not rarely choosing (still to be developed…) IT technology as a solution for complicated problems.

Altogether many risk factors for governmental ICT projects. They’re not easy to avoid, so, despite the recommendations of the 2014 parliamentarian commission, I expect governmental ICT projects to keep on failing in the future, unfortunately.