Predictions

On Being an IT Project Manager

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My profession is much in the news at the moment, so I thought I would pass along such insights as I have from my career, mostly from a multibillion-dollar debacle which I and several thousand others worked on for a few years around the turn of the millennium. I will not name my employer, not that anyone with a passing familiarity with me doesn’t know who it is; nor will I name the project, although knowing the employer and the general timeframe will give you that pretty quickly too.
We spent, I believe, $4 billion, and garnered a total of 4,000 customers over the lifetime of the product, which was not aimed at large organizations which would be likely to spend millions on it, but at consumers and small businesses which would spend thousands on it, and that amount spread out over a period of several years. From an economic transparency standpoint, therefore, it would have been better to select 4,000 people at random around the country and cut them checks for $1 million apiece. Also much faster. But that wouldn’t have kept me and lots of others employed, learning whatever it is we learn from a colossally failed project.
So, a few things to keep in mind about a certain spectacularly problematic and topical IT effort:

  • Large numbers of reasonably bright and very hard-working people, who have up until that point been creating significant wealth, can unite in a complete flop. Past performance is no guarantee, and all that. Because even reasonably bright, hard-working people can suffer from failures of imagination, tendencies to wishful thinking, and cultural failure in general.
  • Morale has got to be rock-bottom for anybody with any degree of self-awareness working on this thing. My relevant moment was around the end of ’99 when it was announced, with great fanfare, at a large (200+ in attendance) meeting to review progress and next steps, that we had gotten a single order through the system. It had taken various people eight hours to finish the order. As of that date, we were projecting that we would be doing 1,600 orders a day in eight months. To get an idea of our actual peak rate, note the abovementioned cumulative figure of 4,000 over the multi-year lifespan of the project.
  • Root cause analysis is all very well, but there are probably at least three or four fundamental problems, any one of which would have crippled the effort. As you may infer from the previous bullet point, back-office systems was one of them on that project. Others which were equally problematic included exposure to the software upgrade schedule of an irreplaceable vendor who was not at all beholden to us to produce anything by any particular date, and physical access to certain of our competitors’ facilities, which they were legally required to allow us into exactly two (2) days per year. See also “cultural failure,” above; most of us were residing and working in what is one of the most livable cities in the world in many ways, but Silicon Valley it ain’t.
  • Not to overlook the obvious, there is a significant danger that the well-advertised difficulties of the website in question will become a smokescreen for the fundamental contradictions of the legislation itself. The overall program cannot work unless large numbers of people act in a counter-incentived (possibly not a word, but I’m groping for something analogous to “counterintuitive”) fashion which might politely be termed “selfless” and do so in the near future. What we seem likely to hear, however, is that it would have worked if only certain IT architectural decisions had been better made.

This thing would be a case study for the next couple of decades if it weren’t going to be overshadowed by physically calamitous events, which I frankly expect. In another decade, Gen-X managers and Millennial line workers, inspired by Boomers, all of them much better at things than they are now, “will be in a position to guide the nation, and perhaps the world, across several painful thresholds,” to quote a relevant passage from Strauss and Howe. But getting there is going to be a matter of selection pressures, with plenty of casualties. The day will come when we long for a challenge as easy as reorganizing health care with a deadline a few weeks away.

Where health care may be going.

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UPDATE: I posted this as much for myself as for others to read. Today, Peggy Noonan weighs in. In case this is behind the paywall, here is her conclusion.

Even though it’s huge, and those who are reporting the story every day are, by and large, seasoned and have seen a few things, no one seems to know how it will end. Because it’s new territory. Does anyone believe the whole technological side can be fixed quickly? No. The president may eventually accept a brief delay in implementation—it is almost unbelievable that he will not—but does anyone think that the economics of the ACA, the content as set out and expressed on the sites, will flow smoothly, coherently, and fully satisfy the objectives of expanding health-insurance coverage while lowering its cost? You might believe that, but early reports of sticker shock, high deductibles and cancelled coverage are not promising. Does anyone think the president will back off and delay the program for enough time not only to get the technological side going but seriously improve the economics? No. So we’re not only in the middle of a political disaster, we’re in the middle of a mystery. What happens if this whole thing continues not to work? What do we do then?

This is the Titanic, folks.

I have watched the failed rollout of Obamacare this past three weeks and wondered where it was going. I have some suspicions. There is a lot of talk about delaying the individual mandate, as Obama did with the employer mandate. Megan McArdle has a post on this today. I think it is too late to fix or delay Obamacare.

With Nov. 1 storming toward us and the health insurance exchanges still not working, we face the daunting possibility that people may not be able to sign up for January, or maybe even for 2014. The possibility of a total breakdown — the dreaded insurance death spiral — is heading straight for us. The “wait and see if they can’t get it together” option no longer seems viable; we have to acknowledge that these problems are much more than little glitches, and figure out what to do about them.

She has already described the insurance death spiral. I think it is here.

Am I exaggerating? I know it sounds apocalyptic, but really, I’m not. As Yuval Levin has pointed out, what we’re experiencing now is the worst-case scenario for the insurance markets: It is not impossible to buy insurance, but merely very difficult. If it were impossible, then we could all just agree to move to Plan B. And if it were as easy as everyone expected, well, we’d see if the whole thing worked. But what we have now is a situation where only the extremely persistent can successfully complete an application. And who is likely to be extremely persistent?

Very sick people.

People between 55 and 65, the age band at which insurance is quite expensive. (I was surprised to find out that turning 40 doesn’t increase your premiums that much; the big boosts are in the 50s and 60s.)
Very poor people, who will be shunted to Medicaid (if their state has expanded it) or will probably go without insurance.

Levin points out: It is now increasingly obvious to them that this is simply not how things work, that building a website like this is a matter of exceedingly complex programming and not “design,” and that the problems that plague the federal exchanges (and some state exchanges) are much more severe and fundamental than anything they imagined possible. That doesn’t mean they can’t be fixed, of course, and perhaps even fixed relatively quickly, but it means that at the very least the opening weeks (and quite possibly months) of the Obamacare exchanges will be very different from what either the administration or its critics expected.

The insurance industry is already reacting to Obamacare and this will quickly become irreversible. This article is from September.

IBM, Time Warner, and now Walgreens have made headlines over the past two weeks by announcing that they plan to move retirees (IBM, Time Warner) and current employees (Walgreens) into private health insurance exchanges with defined contributions from employers.

The article calls it “maybe a good thing” but that supposes the exchanges will function. What if they don’t for a year or more ? What will health care look like in November 2014 ?

What happens next — as we’ve seen in states such as New York that have guaranteed issue, no ability to price to the customer’s health, and a generous mandated-benefits package — is that when the price increases hit, some of those who did buy insurance the first year reluctantly decide to drop it. Usually, those are the healthiest people. Which means that the average cost of treatment for the people remaining in the pool rises, because the average person in that pool is now sicker. So premiums go up again . . . until it’s so expensive to buy insurance that almost no one does.

Will that be apparent a year from now ? I’m sure the administration, and the Democrats, will do almost anything to avoid that. What can they do ? They’ve already ignored the law to delay the employer mandates. It’s too late to delay the individual mandate because individual policies are being cancelled right now.

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Possible South Florida Meetup, Saturday 28 September

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La Vallée-de-Jacmel, Haïti

If all goes well, I will be arriving at MIA on American 1665 from Port-au-Prince at 3:35 PM local time this Saturday. The plan, such as it is, is that I call Jonathan once I am through customs. I somewhat inappropriately made reservations for lodging much closer to FLL, just because I like the place (Villa Europa in Hollywood) and haven’t had the chance to stay there in a while. So anyway, southern Floridians interested in a probable wide-ranging and somewhat ethanol-assisted discussion (#civilsociety #crisisof2020 #statefailure #younameit) are encouraged to contact Jonathan and … figure something out. Hey, I have people for that.

Archive Post: The Shape of Things to Come … And Go

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(Just for fun, from out of my NCOBrief archives, an essay from July, 2010.)
You know, out of all of the things that I was afraid might happen, after the presidential coronation of Obama, the Fresh Prince of Chicago . . . I never considered that race relations might be one of those things which would worsen. Hey lots of fairly thoughtful and well-intentioned people of pallor voted for him, with varying degrees of enthusiasm, or at least in some expectation of him being a fairly well adjusted and centrist politician, or at least a fast learner. Wasn’t that what all the top pundits, and the mainstream media were insisting, all during the 2008 campaign . . . well, once they got up from their knees and wiped the drool off their chins.

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I am not Kafka. But..

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[ cross-posted from Zenpundit — a very preliminary salute to James Bennett and Michael Lotus’ new book, with blues harp to match ]
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Okay, I’m a snapper-up of unconsidered trifles, a jackdaw, not the most consistent of readers — but I did stumble upon something…

I’ll admit, I cannot even see how “the actual time and materials cost of the hammer might be $60 a hammer” when its “functional equivalent might cost $20 in a hardware store” — but let’s overlook that 200% markup for a moment, and chew on the rest of this dazzling paragraph from James C. Bennett and Michael J. Lotus, America 3.0: Rebooting American Prosperity in the 21st Century — Why America’s Greatest Days Are Yet to Come, pp. 266-67:

The Department of Defense requires that the labor time and materials used in building defense items on a “time and materials” basis, which is the great majority of all such items, be documented in excruciating detail. The costs of doing this are themselves allowed as expenses, so that the government ultimately pays for the costs of this proof. Therefore, when lurid accounts of $600 hammers procured by the Pentagon surface in the press, what is actually happening is a hammer whose functional equivalent might cost $20 in a hardware store is purchased in the Pentagon system, the actual time and materials cost of the hammer might be $60, with an additional $540 in documentation costs to ensure that the government is not being over ¬charged for the item.

I admit, I am not Kafka.

But if that isn’t a snake biting its own tail arrangement, I don’t know what is.

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What can I say?

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Interesting, btw — I’ll bet there’s a story behind the decision to switch book covers from the one proposed earlier (at the top of the post, left) to the one the book now carries (right)!