Special Feature
Part of a ZDNet Special Feature: IT Budgets 2016: A CIO's Guide

Ten budget-busting IT disasters you should learn from

The technology programs that suffered some of the worst overspends in history and what went wrong.

Recent history has no shortage of IT projects that have gone wildly over budget and failed to meet expectations.

Behind each of these disasters seem to be familiar stories -- of unrealistic expectations, systems not working as intended, users not being consulted and poor management.

Here are 10 IT projects whose budgets grew way beyond expectations, often with catastrophic consequences.

1. National Programme for IT - £10.1bn

What was it?

One of the most expensive IT projects of all time - designed to transform healthcare in England and spanning at least 10 separate technology projects.

What went wrong?

While many aspects of the programme delivered results, key projects ballooned in cost and missed deadlines. The National Programme for IT was originally costed at £2.3bn but by 2013 the three year project was still running, albeit in a different guise, and had an estimated lifetime cost of £10.1bn. One of the most delayed and expensive parts of the programme was a project to install patient administration systems (PAS) in English hospitals - with complaints that systems had been designed without consulting frontline hospital staff - resulting in software labelled hopeless by politicians.

What was the outcome?

There is disagreement over exactly how much the cost of the project has gone up - but it certainly has risen - with private sector companies collecting billions more than originally expected and the hospital PAS projects running years behind schedule and still not finished - long after the government announced the supposed death of the project.

2. US Air Force Expeditionary Combat Support System - $1bn

What was it?

A six year program to develop an Oracle-based system to manage logistics called the Expeditionary Combat Support System.

What went wrong?

The project appears to have got bogged down in customising an off-the-shelf software to its needs. Computer Sciences Corporation was appointed to serve as the lead system integrator under a $628m contract.

The project's big failing seems to have been trying to do too much, too fast. Grover Dunn, the Air Force director of transformation, said at the time that the project would see the force "change all the processes, tools and languages of all 250,000 people in our business at once".

By April 2011, Jamie M. Morin, assistant secretary of the Air Force testified before a subcommittee of the Senate's Armed Services Committee, telling politicians that the total cost of the system had hit $1bn and that he was "appalled at the limited capabilities that program has produced relative to that amount of investment."

What was the outcome?

The system was cancelled in November of 2011.

3. FiReControl - £469m

What was it?

The FiReControl project was intended to build nine networked high-tech control hubs for the fire brigade in England, replacing 46 existing centers. These networked centers were to provide wider access to live information during emergencies and better co-ordination of available manpower and equipment.

What went wrong?

The UK government cancelled the project in December 2010 after concluding that it could not be delivered in an acceptable timeframe. At the point the decision was made an estimated £245m had been spent on the project and the cost of completion was estimated as £635 million, more than five times the original projection of £120 million.

UK government spending watchdog the National Audit Office (NAO) said the department running the project assumed that development of the IT system would be straightforward but in practice key components required substantial unforeseen modification.

What was the outcome?

As a result of the majority of the regional control hubs standing empty the government continues to incur costs - with the NAO estimating that the minimum sum wasted on the project would be £469m.

4. MyCalPays - $373m

What was it?

A project to develop a payroll system for 240,000 employees in the state of California.

What went wrong?

According to a review by the California Senate Office of Oversight and Outcomes, the project suffered from lapses in due diligence, a repeated failure to resolve core issues when raised, chronic turnover in leadership and "what may have been unrealistic expectations".

The State Controller's Office and SAP blamed each other for the project's collapse, with the State Controller's Office filing a lawsuit against SAP.

During the lawsuit the State Controller's Office claimed the system "could not get the payroll right even once over an eight-month period for a pilot group of only 1,500 employees".

What was the outcome?

In its review the California Senate Office of Oversight and Outcomes said the state "was left with little to show for a project that burned through more than a quarter of a billion dollars over 10 years".

5. Single Payments Scheme - Cost £350m

What was it?

A system for processing European Union subsidy claims from farmers in England.

What went wrong?

The UK's Rural Payments Agency became locked into a costly contract it was difficult to get out of. According to the UK spending watchdog the National Audit Office (NAO), at one stage the agency was paying 100 contactors from Accenture an average of £200,000 each.

Ongoing customisation of the single payment system, including changes to Oracle software source code, resulted in a IT network so complex and cumbersome that the NAO warned the government was reliant on external support and expensive to use.

Consequently the NAO recommended the government replace the £350m system after just four years of use.

What was the outcome?

Problems continue to plague attempts to digitally process farmers' subsidy claims. This year a £154m system designed to simplify the payment system had to be partially withdrawn after problems with a mapping tool forced applicants to use paper forms instead.

6. California Case Management System - $500m

What was it?

A computer system to aid with the administration of justice in California.

What went wrong?

The project was costing too much. In 2004 the expectation was that the system would cost $260m to implement but by 2012 it was estimated it would cost $2bn to see the project through.

Although there were clear benefits to providing a common system across the state and replacing 70 different legacy system, it was decided that the state could no longer afford the cost of completing the system.

What was the outcome?

Since the project was cancelled a number of Californian courts have continued using an earlier version of the CCMS to handle some of their daily work.

7. BBC Digital Media Initiative - £125.9m

What was it?

A major project to let BBC staff develop, create and share video and audio content on desktop computers.

What went wrong?

Despite taking six years to plan, design and build the project missed key deadlines. The National Audit Office (NAO) found the BBC was too optimistic about its ability to implement the scheme and failed to fully assess project to check it was technically sound. The result was a system that was plagued by technical problems and releases that didn't meet user expectations - which resulted in deadlines for its completion being pushed back repeatedly.

Crucially, according to the NAO, the BBC didn't appreciate the scale of the problems facing the project until it was too late and it was cancelled in 2013.

What was the outcome?

After halting work on the programme the BBC launched an examination of whether parts of the system could be deployed to support future archiving and production needs.

8. Avon Service Model transformation - $125m

What was it?

A global project to revamp order management with a backend system by SAP.

What went wrong?

In a 2011 interview SAP talked up the opportunities offered by digitising ordering at Avon so representatives could order direct from an iPad.

But it appears that the project didn't fit with the way that Avon representatives wanted to work. In an earnings call Avon CEO Sheri McCoy said "the degree of impact or change in the daily processes to the representative was significant", adding: "This resulted in a steep drop in the active representative count".

What was the outcome?

The company decided to halt the rollout of the SMT and write down up to $125m in software costs to avoid further disruption.

9. Waste Management SAP ERP system - $100m+

What was it?

An ERP system for the US trash haulage firm Waste Management.

What went wrong?

It depends which side you ask. Waste Management claim the system, which was expected to deliver more than $350m in benefits, was a "complete and utter failure". SAP said that Waste Management failed to "timely and accurately define its business requirements" and didn't provide "sufficient, knowledgeable, decision-empowered users and managers" to work on the project.

What was the outcome?

A lawsuit between SAP and Waste Management was settled with SAP making an undisclosed, one time cash payment to garbage disposal firm in 2010.

10. Massachusetts Department of Revenue system - $54m

What was it?

A system to help Massachusetts residents file tax returns.

What went wrong?

The system didn't work as needed - reportedly being unable to print forms, calculate interest and penalties despite the millions that had been spent developing it. One in-house test of the system in 2012 found 1,000 defects, which were fixed over the next nine months by the contractor Deloitte.

What was the outcome?

The Department of Revenue terminated the contract with Deloitte in 2013 after judging that retaining their services could result in the state spending the project's full $114m budget and still not getting the system they wanted. The official who took the decision to terminate Deloitte's contract was still hopeful of completing the system on budget by building on what the contractor had already delivered.

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