What’s an early clue that your IT project is in trouble? Perhaps when “a group of … employees took a 60-day ‘retreat’ for the express purpose of articulating the project’s requirements, and they returned empty-handed”? Or when you learned that critical project-related decisions were “going to be made by a group of inexperienced people, who could not agree on how to make decisions, let alone which decisions were most important”?
Or is it when a consultant reviews your work and concludes that the “development team’s quality of … work was atrocious … they broke every single best practice that [they] themselves had defined. It was one of the worst assessments I have performed in my 18 years … “?
Behold the dueling complaints that are the sordid aftermath of an epic IT disaster, the state of Oregon’s attempt to roll out a state health information exchange in alignment with the Affordable Care Act. Oracle sued first, claiming that they are still owed $23 million. Oregon responded with a suit seeking damages that could run into the billions of dollars.
How bad was it? A renowned management turnaround specialist who was brought in five months before the lawsuits began to fly reported that “[r]arely if ever in my experience as a turnaround professional have I encountered so dysfunctional a leadership and management situation.”
“Several executives and managers held positions they did not have the experience or ability to handle and were consequently failing. There was little accountability among management. High level objectives were not aligned and executives were frequently at odds with one another, at times displaying unprofessional conduct such as territorial behavior, open hostility, and use of strong profanities in verbal communications.”
Little wonder that “[e]mployee morale was poor, and [Hamstreet] encountered widespread discomfort and wariness among the staff about whom to align with or trust.”
Much of the finger pointing is around whether Oregon chose not to engage an independent systems integrator to oversee the work, or whether Oracle persuaded them not to do so.
Oracle claims that “[r]ather than engage the services of an experienced systems integrator – in effect, a general contractor to manage the massive project – Oregon decided to manage the project by itself, despite having little or no experience with projects of such novelty, complexity, or scale. That decision was akin to an individual with no construction experience undertaking to manage the processes of designing and building a massive multi-use downtown skyscraper without an architect or general contractor, instead engaging and managing dozens of separate subcontractors with different specialties to build different parts of the project.”
Oregon sees it a bit differently. The state says that it “initially planned to hire an independent ‘Systems Integrator’ to manage the [project] and implement the Oracle solution. Oracle was dead set against the State hiring an independent Systems Integrator.” Further, that “Oracle recommended to the State that it hire Oracle’s own internal consulting unit, Oracle Consulting Services, to play the same role.”
Presumably it will be up to a jury to decide what the facts are; at present both lawsuits are in Federal court and a hearing to decide on the next steps will be held on November 21.
So how could such a fundamental question – whether to hire an independent systems integrator to oversee a $200 million development effort – have been so misunderstood by the parties involved? Talk about the elephant in the room!
Jim Tyson – Word to the Wise
I am an IT Senior Executive www.linkedin.com/in/jimtyson1/ with over 30+ years of experience. I have a passion for human nature and Information Technology – working to understand the relationships between both to create productive environments.
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 Oracle Corporation “Complaint for Breach of Contract and Quantum Meruit”, filed 8/8/14, available at http://media.oregonlive.com/business_impact/other/oracle2.pdf, p. 7.
 Ibid., p. 6.
 State of Oregon, “Complaint, Fraud: Oregon False Claims Act; Breach of Contract; Oregon Racketeer Influenced and Corrupt Organizations Act”, filed 8/22/14, available at http://www.oregon.gov/docs/082214_filing.pdf, p. 47.
 Hamstreet & Associates, “Overview of Hamstreet Cover Oregon engagement and recommendations”, August 29, 2014, draft version published at http://www.scribd.com/doc/242986376/Hamstreet-Cover-Oregon-memo, p. 1.
 Oracle, p. 5.
 Oregon, p. 3.
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