**6. Chaos in the Queensland Government**

The question that this research examined was not which factors were evidenced in the project studied, but why managers continue to make the same mistakes despite all the advice and training that is available. What this research found was that senior departmental leadership, which included the governance board and Department Head, ignored all the evidence and advice that was presented to them. They conducted themselves in a manner that implied that the project was running well, and that they did not require any input from their own team members. It appeared in fact that they distrusted their own staff relying instead on external vendor input. The leadership team of Queensland Health exhibited strong indicators of

Situational Incompetence exists where an otherwise experienced manager is placed in a position of authority over a domain of activity for which they are neither educated nor experienced. Their lack of knowledge leads them to overestimate their own abilities and to underestimate the challenges. Their lack of expertise results in an inability to identify competence in others, and an inability to intuit an appropriate response when the project experiences challenges.

The Queensland Health Payroll Project had its foundations in another project by the Queensland State Government - the creation of a shared service initiative (SSI). The SSI was a business unit of Queensland Treasury and was named CorpTech. The idea behind the SSI was that all of the administration and back-office services required by each Department could be

With this as the foundation, it was the charter of the shared services to deliver a human resources and payroll capability to several government departments, including the Depart-

In about 2005, the SSI commenced work on implementing a universal payroll solution for all Queensland Government Departments and agencies, starting with the largest two, the

'After the whole-of-government decision around 2005 to implement (software from) SAP (corporation), Queensland Treasury decided that they were going to be the systems implementation lead' [27]. Accenture, as an external party, were engaged on a time and materials basis to

By mid-2007, there were multiple parties involved in providing resources to the whole-ofgovernment project, including Accenture, IBM and Logica. By March of 2007, it had become apparent to senior Department officers that the SSI was facing significant challenges. The Service Delivery and Performance Commission had reported [28] that organisational change was necessary as the project was behind schedule and over budget. The under-Treasurer' of the Department commissioned a review to identify potential courses of action' [28]. The report was delivered to the Department on the 18th of April 2007. What evolved from this was the idea of engaging a 'Prime Contractor' that would take responsibility for the ongoing

organisational narcissism resulting in situational incompetence.

**5. Timeline of events**

32 Dark Sides of Organizational Behavior and Leadership

ments of Education and Health.

provide resources to this SSI project [27].

more efficiently undertaken by a single agency.

Department of Education and the Department of Health.

The Queensland State Government did not appear to have a consistent plan for the solutions for HR, payroll, rostering and recruitment. Different technologies were being deployed across different Departments at the same time, utilising the services of multiple vendors. Some vendors were operating as parts of a single project (on occasion), independently on other projects, and competing against each other for additional business. The overall environment appears to have been chaotic.

CorpTech initially went to market 'to seek products which could be delivered across Government and meet government-wide needs for HR and Payroll' [28]. IBM was awarded the contract after proposing a 'consortium of products - SAP was used as the core, and included Workbrain for rostering arrangements, Recruit ASP for recruitment solutions and SABA for knowledge management' [28].

Prior to the commencement of the Queensland Health payroll project there are what appear to be conflicting projects awarded to different vendors. One contract, to IBM, to implement four software products to provide a state-wide HR and Payroll solution, and a second contract, awarded to Accenture, to implement HR and Payroll for the Department of Housing.

The IBM proposal [28] included four solution components: SAP ECC5, Recruit ASP, Workbrain and SABA. From the witness statements it is apparent that contention arose as to the transparency and appropriateness of the selection process for these products. For example, Mr. Waite, the head of the government agency tasked with implementing these solutions, stated that 'to the best of my recollection, no choice about Workbrain had been made by the State before the November 2005 contract' [28]. In the memorandum [29] dated 28th May 2007, it was noted that Workbrain was going to be implemented in 2008 as the replacement rostering solution. It is therefore clear that the intended use of Workbrain predates the IBM proposal and ultimate contract in December 2007.

as to what actions should be pursued. The overriding reasons stated in this communication for a replacement of the LATTICE system with the new SAP/Workbrain solution was the 'prohibitive costs of maintaining the LATTICE system and its cessation of support in June 2008' [27]. In essence then, the business case for the new system was that the old system was about to lose its maintenance and support from the vendor. No evidence has been sighted to suggest that any greater understanding of costs and benefits was undertaken before the contract was

Situational Incompetence: An Investigation into the Causes of Failure of a Large-Scale IT Project

http://dx.doi.org/10.5772/intechopen.76791

35

The solutions design and architecture appears to have been set by some sort of default when the tender responses confirmed the solutions architecture. The time scale was set by virtue of a fixed price quote for work to be completed by the 30th of July 2008, but the tasks and activities were unknown when the contract was signed. The winning tenderer had committed to meet the time and budget using the products preferred by the Queensland Government [28]. A representative of Accenture responded during the Commission of Inquiry that he 'observed that price and scheduling were key drivers in the decision to award the tender to IBM' [27]. Commenting further, the Accenture representative could not 'determine what price IBM was suggesting in terms of the fixed price or the total expected price' [27]. Accenture had proposed an initial scope of work and pricing much more in line with IBM's amended quotation some months later of A\$180 million. In meetings with senior Department executives Accenture made it clear that they thought IBM's price would escalate dramatically once they

The externally engaged legal firm [36], in preparing their advice with respect to each of the proposals from Accenture, IBM and Logica, stated that 'we believe on balance that IBM's Offer gives rise to a greater number of material issues and less thought has gone into IBM's Offer regarding contractual mechanisms that will assist the customer or enhance the working relationship between the parties' [36]. This shows further evidence that the experts engaged by the Department were highlighting the risks of the IBM proposal, but these concerns were

At this stage of the Queensland Health Payroll project, the Queensland Government had accepted a contract to implement an IT project to a business problem for which no business case existed and no technical solutions architecture had been provided. The IT project was shown by the evidence tabled at the Commission [28] and by the analysis of documents, to be a solution to fulfil an unknown set of requirements for a fixed price and timescale, and oddly one already in government use on an existing challenged project. Furthermore, senior management was acting against the advice of their technical experts [37] and external legal

Why did senior management of the Department appear to simply ignore the findings of the report(s) that they had commissioned? Did they not believe the findings? Did senior management trust the promises of the vendor to produce an outcome despite what they were being

awarded to IBM for what became a 1 billion dollar disaster.

(IBM) understood the scope of work required [27].

being ignored.

advisors [36].

**7. Governance and oversight**

The choice of solutions architecture for the Queensland Health Payroll project does not appear to have been determined with consideration of the business or technical needs of the Department. According KPMG [30], 'as of 2005, the Whole-of-Government system for payroll had been identified as SAP ECC5 and Workbrain. As a result, it was decided that QH would replace the Lattice/ESP system with SAP ECC5/Workbrain as part of the Whole-of-Government Shared Services Initiative' [40]. Other eyewitness accounts placed the decision to adopt a combination of SAP ECC5 and Workbrain at a much later date (during the 2007 proposals and presentations). 'The presentation provided by IBM indicated that the Workbrain system would become the award interpreter (in lieu of SAP) …. the presentation was potentially a game changer' [39]. The issue of product selection would become an issue as the project progressed. Integration between SAP and Workbrain became a significant constraint on the project [38]. As these two accounts indicate, even on what should have been a clear and uncontroversial issue; who made the choice of products and when that decision was made is open to many interpretations. One that does not seem to have been resolved by the end of the Commission of Inquiry.

Towards the end of 2008 the 'IBM team, working in collaboration with the CorpTech Enterprise Architect, obtained and reviewed the documentation for relevance to clarifying the business drivers underpinning the SSI' [39]. This document, created several years after the commencement of the project, appears to be the first and only document to address the business drivers and explicit requirements of the project.

At the point of issuing the invitation to offer, having already been to market with a request for information and a request for proposal, the Queensland Health/CorpTech team did not have an 'Initial Statement of Work'. The Government sought [28, 30], and the vendors responded with, fixed price commitments to a project that was devoid of even the most basic of project components—a statement of requirements! In essence, IBM had agreed to undertake a project, at a fixed price, for which no statement of work existed and no detailed planning of any description had been undertaken.

While no explicit business case appears to exist for the project, and none could be sourced either from the Witness Statements or via Freedom of Information requests, various memoranda [31–35] collectively cite various justifications that could be retrospectively viewed as business case-like rationales, such as the risks facing the existing LATTICE system, and the need to replace it [28]. In May of 2007, the Manager of HR Operations wrote to the Executive Director of Queensland Health Shared Services [29] to outline these risks and make recommendation as to what actions should be pursued. The overriding reasons stated in this communication for a replacement of the LATTICE system with the new SAP/Workbrain solution was the 'prohibitive costs of maintaining the LATTICE system and its cessation of support in June 2008' [27]. In essence then, the business case for the new system was that the old system was about to lose its maintenance and support from the vendor. No evidence has been sighted to suggest that any greater understanding of costs and benefits was undertaken before the contract was awarded to IBM for what became a 1 billion dollar disaster.

The solutions design and architecture appears to have been set by some sort of default when the tender responses confirmed the solutions architecture. The time scale was set by virtue of a fixed price quote for work to be completed by the 30th of July 2008, but the tasks and activities were unknown when the contract was signed. The winning tenderer had committed to meet the time and budget using the products preferred by the Queensland Government [28]. A representative of Accenture responded during the Commission of Inquiry that he 'observed that price and scheduling were key drivers in the decision to award the tender to IBM' [27]. Commenting further, the Accenture representative could not 'determine what price IBM was suggesting in terms of the fixed price or the total expected price' [27]. Accenture had proposed an initial scope of work and pricing much more in line with IBM's amended quotation some months later of A\$180 million. In meetings with senior Department executives Accenture made it clear that they thought IBM's price would escalate dramatically once they (IBM) understood the scope of work required [27].

The externally engaged legal firm [36], in preparing their advice with respect to each of the proposals from Accenture, IBM and Logica, stated that 'we believe on balance that IBM's Offer gives rise to a greater number of material issues and less thought has gone into IBM's Offer regarding contractual mechanisms that will assist the customer or enhance the working relationship between the parties' [36]. This shows further evidence that the experts engaged by the Department were highlighting the risks of the IBM proposal, but these concerns were being ignored.

At this stage of the Queensland Health Payroll project, the Queensland Government had accepted a contract to implement an IT project to a business problem for which no business case existed and no technical solutions architecture had been provided. The IT project was shown by the evidence tabled at the Commission [28] and by the analysis of documents, to be a solution to fulfil an unknown set of requirements for a fixed price and timescale, and oddly one already in government use on an existing challenged project. Furthermore, senior management was acting against the advice of their technical experts [37] and external legal advisors [36].
