Cost Overruns for IT Projects for the Pentagon Are, Unfortunately, Consistent with Enterprise Experience

This post constitutes our final annotation of an article published on February 11, 2013 by the Wall Street Journal, Send in the Tech Reinforcements. The article was written by Arthur Herrman and John Scott. We found three points in the article to be worth an expression of our own opinion:

  1. One of the clearest presentations that we have seen of a tangible benefit offered by cloud computing for enterprise business and other large organizations in the public and not for profit sectors
  2. A controversial position on the question of whether or not it makes sense to implement operational risk management policies and procedures over IT project implementations
  3. and, finally, a presentation of substantial cost overruns as a characteristic emblem of IT projects implemented on behalf of the Pentagon here in the United States of America

With regard to 3), we are in full agreement with the article authors. The substantial gap between planned IT project costs and the actual cost of delivering the very same IT projects for the Pentagon is extreme and certainly worth an effort to control. We, ourselves, wrote quite early in this blog on a similar topic, albeit strictly with regard to the history of IT project implementation for enterprise business.

In our piece we noted our own lack of familiarity with the concept of Portfolio Management for IT. We then provided a definition for this function for modern enterprise IT organizations, and our opinion that the function has taken on the prominent position that it presently has in enterprise IT organizations as a direct result of the same extensive gap between planned IT project costs in the private sector and the actual expenses associated with them once these projects have been completed.

Now that we read the same type of information in an article on IT project implementation experience in the public sector (the Pentagon), we have to go a step further and posit that, despite 30-40 years of methodology evolution (and a good bit of that evolution effected by prominent, well respected universities like Carnegie Mellon), IT project management continues to fail to deliver on organizational expectations.

Larger ISVs and the consulting firms that typically partner with them on behalf of larger customers, have to do a better job of projecting costs. But is the empirical process of analyzing past experience, and, then projecting a likely outcome, itself, flawed and highly unreliable? In the aftermath of reading an article like the one written by Messrs Herman and Scott we have to answer in the affirmative on that one.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

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