New governmental IT disaster raises old questions

Another public system, this time at Arbejdsskadestyrelsen, has failed to live up to expectations – at a cost to the taxpayer of 164 million kroner

The government agency Arbejdsskade-styrelsen has been advised to shut down its new IT system, PROASK, at a cost of no less than 164 million kroner.

Arbejdsskadestyrelsen is a neutral public authority under the Ministry of Employment and makes decisions regarding workplace injury cases. The new IT system was supposed to save the agency time and resources, but a Deloitte analysis showed that it instead will require more employees compared to the current system. The system was also supposed to be a role model for future case handling systems.

The professional services firm now recommends that Arbejdsskadestyrelsen completely shuts down PROASK, which before its pilot launch in 2012 had already been delayed a number of times and gone over budget by more than 50 million kroner. The caseworkers will instead have to revert back to a system set up in 1991.

According to Berlingske newspaper, which has requested subject access in the case, there were many warning signals throughout the process that the agency and Ministry of Employment should have acted on. Documents also reveal that not even the supplier Steria believed in the project after a quality review in 2010.

Why do so many systems fail?

PROASK is just one of many public IT systems over the last ten years that has been delayed, cancelled or gone way over budget. Other recent examples include state-owned companies such as SKAT, NemID and Rejsekort.

A professor of IT at the University of Copenhagen, Søren Lauesen, has researched why public IT systems often fail to live up to expectations. A big part of the problem is the unreasonable demands set by the clients, he explained to The Copenhagen Post.

“They often do not have a realistic idea of what is possible,” Lauesen said.

“The clients instead have the perception that they are smarter than the supplier.”

Lauesen has recently investigated why Polsag, an IT system developed for the police, had to be dropped after costing nearly 500 million kroner.

“Nobody was able to explain the attraction of the investment, but the future operating costs would have needed to increase by a factor of five,” he said. “For this reason the government closed the project and wondered why they had spent 500 million kroner before detecting the mistake.”

Problems in private sector kept in the dark

Not all public IT systems end up in disasters, however, and according to Lauesen a key part of being successful is being open to changes throughout the process instead of stubbornly sticking to a long list of detailed demands. But the problem can also be the opposite.

“In the case of Rejsekort [public transportation company] the client was too afraid to tell the supplier of the system that he did not understand the proposed back-office solution,” he said. “When the delivery approached, it turned out that the supplier couldn´t deliver an acceptable back-office solution. It is all about finding a balance between demanding too much and too little.”

The same problem is also true of the private sector, where large-scale IT systems are often dropped after heavy investment. But since it is not possible to request subject access at these companies, the failures tend to stay in the dark.

“Maersk had a big problem with an administrative IT system a couple of years ago, which almost ruined them, but you did not hear much about that incident in the media,” said Lauesen.


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