29May 09

How going public can be, well, public

Posted by Suzanne Tindal @ 10:18 2 comments

Do the boards of IT companies deliberate extra carefully before making a deal with government for fear of having their name pulled through the dirt when they stuff up?

If an IT contractor isn't delivering, it's generally not in the best interest of any profit-making company that the general public finds out about it.

If an IT contractor isn't delivering, it's generally not in the best interest of any profit-making company that the general public finds out about it. The company can commit the crime of omission when it comes to projects that turn into a dog's breakfast, or try to explain adverse sums in financial results with flowery phrases.

Avoiding "no comment" like the plague, executives can become trained in sidestepping the question or giving non-committal answers such as "Project A is progressing just as we expected it would". And what, pray tell, was your expectation?

Of course, there are always the whistle-blowers from within the organisation, but of the many projects blowing up in companies' faces, how many have a conscientious observer who is willing to risk their job to air dirty laundry?

Fortunately for taxpayers, the government is a lot more open, especially around the signing of contracts.

Recently when I was sent information by a firm who wanted to show off a recent deal with the government, I asked what the value was. The company's spokesperson wasn't able to give it to me, so I went and found it on the relevant government's tender website where it was available for everyone to see.

I'm sure the vendors don't mind too much when that happens. However, they probably do mind when one of the endless audits rips open the veil on a government's organisation, exposing the metaphorical cockroaches scuttling around the department's IT.

Take, for example, the Western Australian Auditor-General's report in 2007 on the state's shared services program, which spoke about Oracle's involvement after it was contracted in 2005 to provide an integrated financial, human resource and procurement system.

Fortunately for taxpayers, the government is a lot more open, especially around the signing of contracts.

"The contractor is required to design, build and test a human resource system that provides payroll functions for 30 of the 70 different employment awards and agreements operating in the WA public sector. The whole integrated system was to be completed by the end of April 2006. So far, only three of the required awards for the human resource component have been delivered. Government is currently considering options about how best to deal with the delay and unfulfilled contract obligations," the report said.

This is a damning statement to have publicly available, despite the fact that the report goes on to explain circumstances which had made the vendor's work difficult, and that the government and its vendors are broadly pulling the project back on track.

Contrast this to another company Oracle is involved in, Telstra, for its transformation project. Although there has been a lot of press from leaks and unions decrying the Oracle Siebel system, there has been no confirmation from the telco that the system is not functioning as expected, leaving a taste of uncertainty in the mouth. Was it just staff being unacquainted with the new system as former CEO Sol Trujillo suggested? Perhaps the system was incorrectly implemented. Maybe it's all a storm in a teacup.

Without the public getting a look at a review intended to shine a light into those murky depths, who really knows where the blame lies for long call queues and frustrated call centre workers?

So back to my point. If I was Oracle, I'd prefer the uncertainty to the damning black and white of the Auditor General's review. What do you think?