This is a re-posting of my favorite previous blog post (from February 10, 2013). Given the continued inability of California’s state government to properly manage technology initiatives, like their failed DMV system, I feel it is still very appropriate today. I hope you enjoy.

My Sunday breakfast was upset this morning thanks to an “OC Watchdog” column in the Orange County Register.  The story outlined how a project to build a computer system (SDI Online) for the California Employment Development Department has gone from an original estimate of $35 million to a cost of $158 million.  Oh, and it is 3 years late. The poorly performing system was built by Deloitte Consulting and, quite frankly, they should be ashamed of themselves.  There are so many things wrong with this situation:

  1. The state of California has been in a severe budget crisis for some time now.  Allowing a project to cost over four times its original budget is a crime.  No private or publicly traded company would allow this.  The project would have been cancelled or reigned in before it got to this point and, most likely, someone would have been fired.  But the state apparently feels that this sort of behavior and performance is acceptable.  Where are the controls to better manage a project, and vendor, like this one?
  2. How can any software system cost $158 million to produce?  I’m in the software business and my history is in leading large software development teams to build high quality software products that drive revenue for the company.  The products my teams have built are extremely complex and generate hundreds of millions of dollars in annual revenue, but I’ve never had a budget near that large.  Not even close!  It is impossible for me to even consider wasting spending that much money on a software system.  How does the state of California justify this amount of wasteful spending and how does Deloitte Consulting justify fleecing the state like this?
  3. On that subject, how does Deloitte Consulting continue to get business with the state of California when their performance has been so spotty?  The OC Register article today referenced this article in the Los Angeles Times from last December that outlined a number of similar projects.  Projects that took a lot longer and cost a lot more than promised, some of which were not even completed.  So how does Deloitte Consulting keep getting business with the state?  The LA Times article references their lobbying effort, but how can the state be so blind to this and continue to allow this to happen?
  4. And finally, on a more personal note, this sort of debacle gives consulting companies like mine a black eye.  My practice is focused on helping software development organizations and software companies improve their ability to deliver high quality software that meets their customers’ expectations, and do it on time.  I help them develop and implement their business and product strategies and show them how to communicate them internally and to customers.  I help them align and change their product/software organizations and, when necessary, help them bring in new people to create a higher performing organization.  I help them institute better software development and project management processes, and help them build a quality focus in everything they do.  And I help them implement the right metrics to help them monitor their performance.  But I don’t charge $158 million to do all of that.  And I don’t fail.  Maybe I should go solicit the state for some business.  Or, better yet, maybe I should go knock on Deloitte Consulting’s door and offer to help them.  I hear they have about $158 million burning a hole in their pocket, and they can sure use the help.

I welcome your feedback.

Kelly Stephen Consulting

Strategy |Planning | Execution |Results