Tuesday, 23 November 2010

bad decisions - failure to invest in people

Its been interesting to see the unfolding of the Queensland Health Payroll debacle. I read today that some $200 million (yes, thats $200,000,000) will be required to "fix" the system. Assuming that does the trick.

As one who has been a developer for some decades I find it interesting to see how large government institutions have been increasingly divesting themselves of any internal skills or experience in IT and outsourcing everything. Once upon a time organisations had both process knowledge as well as technical knowledge and built systems which worked well and functioned. These were often done in house at low cost.

Back in those days management would whine like a fully functional jet engine at the thought of hiring 3 more programmers at $30,000 to complete large tasks. Looking at the numbers above you'd get a team of over six thousand developers (not just 3) for the same money.

Ok, that's maybe simplistic ... lets say you'd need to have them for 3 years (how long has the QLD Health debacle been in the planning?), say there is an admin overhead of 100% (meaning you'd have to pay double) and put it in todays dollars (about 50,000 per annum for a developer).

So 3 x $50,000 x 2 = $300,000 ... or six hundred teams for the same price.

Why has noone realised that expensive consultants who own expensive downtown buildings and get paid high salaries can't be saving you money when they're getting rid of low paid employees.

But no ... its more cost effective to outsource it or is it ...

At last the ABC reports that the Government has broken off from this supplier:

"Corptech, on behalf of the Government, has terminated its relationship with IBM," he said.

but where to now?

Try and find experienced IT staff who have a long history with an organisation, people who get to develop stuff; not just patch packages like "SAP or People soft" or have to work with "pre made" stuff which does not suite the task and gets nails hammered through it to "fit".

I've been saying for some time, if there's a skills shortage in Australia it seems to be focused around upper management who decide its not worth investing in a good team.

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