Follow-up: Duration reporting in California's IT strategic plan
After a lengthy conversation with senior representatives of California's CIO, Teri Takai, I no longer believe Takai deliberately intended to mislead the public over project duration reporting in California's 2009 IT Strategic Plan.
Takai's representatives, Adrian Farley, Chief Deputy Director for Policy and Program Management, and Bill Maile, Director of Communications, convincingly explained how the duration reporting discrepancies I identified in a previous blog post arose from "unclear language" and "nomenclature."
To understand why I needed convincing, read Farley's comments in the Sacramento Bee, where he responded to my earlier post. His responses are indented:
Is [Krigsman's] analysis fair and accurate?
The state's IT Strategic Plan provides a framework to addresses many longstanding issues with IT in California. Due to the breadth of the document, it is possible that information in the Plan could be misconstrued which could then lead to inaccurate conclusions. As an example, the durations of the 10 completed plans highlighted were 3.56 years on average and not 1.9 years as mentioned in the blog. The Child Support Automated system for example took almost 6 years to complete, far longer than the 2 years described in the blog. While there are always risks associated with large IT projects, the state has completed more than 100 projects since 2003 with an average cost of almost $26 million - and more than 25% of these projects had a duration of 3 years or longer.
How were the 19 projects picked for the "Wins for California's Information Technology" list?
The 10 completed projects highlighted in the IT Strategic Plan were chosen because they provide context as to the scope and scale of the IT projects undertaken by the state and because they are representative of the diversity of 119 projects completed by state agencies since 2003. The nine projects listed in the top nine are those active IT projects with approved budgets above $150 million.
How is the state's budget strain impacting current projects?
In light of the state's fiscal condition, the OCIO is working with departments to reduce project costs. This ranges from delaying projects to exploring innovative strategies to fund projects.
THE PROJECT FAILURES ANALYSIS
Although project duration reporting may seem like an arcane project management issue, it's actually a critical factor in understanding the link between IT investment and associated value. Therefore, we must scrutinize how any public agency reports project length.
Francine McKenna, a forensic accountant and independent analyst, explains why a careful observer might have issues with duration as reported in California's plan and also with Farley's comments in the Sacramento Bee:
Rather than disclose chronological project duration, California's "success list" seems to report project length on a fiscal year basis. Since fiscal year reporting can easily distort project scope, budget, and duration, this issue was important to examine.
In the Sacramento Bee, Farley revealed that projects on California's list had an actual duration of 3.56 years, as opposed to the 1.9-year duration that appeared to be reported in the strategic plan. Had this discrepancy been willful, which we now realize was not the case, it would have created questions regarding the accuracy of the state's IT reporting.
The strategic plan shows that California's nine largest ongoing projects have had an average duration of 6.5 years and average cost of about $400 million each. Two of these projects have been active for a decade or longer, which is enormous.
McKenna described the risks associated with long projects:
Long projects can indicate unclear goals, out-of-control requirements, and inconsistent government oversight. Without proper monitoring, external vendors can make a killing on extended projects. California must diligently manage these risks.
Farley emphasized the state also runs many smaller projects. He said the average duration across all of California's IT projects between 2003-2007 was 2.3 years, with an average cost of $25 million each.
My take. Large IT projects combine substantial cost with high complexity, creating tremendous risk and corresponding opportunities for waste. Government agencies have an obligation to report this data clearly and accurately.
To the Office of the CIO's credit, Farley and Maile readily acknowledged the confusion and said they will update their strategic plan with specific time durations for each project.