Risk transfer

From HMT’s Green Book

The two main causes of optimism bias in estimates of capital costs are:

poor definition of the scope and objectives of projects in the business case, due to poor identification of stakeholder requirements, resulting in the omission of costs during project costing; and poor management of projects during implementation, so that schedules are not adhered to and risks are not mitigated.

Appraisers should adjust for optimism bias in the estimates of capital costs in the following way: Estimate the capital costs of each option; Apply adjustments to these estimates, based on the best available empirical evidence relevant to the stage of the appraisal; and Subsequently, reduce these adjustments according to the extent of confidence in the capital costs’ estimates, the extent of management of generic risks, and the extent of work undertaken to identify and mitigate project specific risks.

Departments or agencies may be able to provide the best empirical evidence to support adjustments for optimism. Alternatively, and if applicable, they may be taken from the Green Book, which provides the recommended adjustments to be made at the outline business case stage for buildings, civil engineering, equipment and development, and outsourcing projects.

If no obvious empirical evidence is available, this may indicate that the project is unique or unusual, in which case optimism bias is likely to be high. In these cases, adjustments should be based on the nearest equivalent project type, and adjusted up or down, depending on how inherently risky the project is compared to its nearest equivalent type.

If a department chooses to apply its own adjustments, these must be prudent. Where possible, the cost estimates, and the adjustments for optimism bias should be reviewed externally (using Gateway reviews for large projects, or internal audit reviews of smaller projects).

Tough days

It’s been a crap few days. I was out of town last week and over the weekend – for longer than I expected to be. I had all of my luggage stolen from a rental car, including my passport (which would have made it pretty hard to get back home; it was a long swim). Strangely, a couple of hours after the theft, someone called me who’d found one of my bags about 5 miles away, complete with my passport. He drove all the way out to the airport to deliver it, proving that for every complete idiot on the planet, there may just be someone who offsets them. So, thank you David Crabtree for driving out of your way and returning my bag – you restored some of my faith in humanity.

This also seems to have been the week of emails from the public. I don’t know about faxyourmp, but emailyouregovperson seems to be doing fine. This week there have been quite a few emails from people questioning what on earth is going on with the UK’s e-government efforts. This has come on the back of the various reports noting that several countries are moving ahead of us in the quest to deliver useful services.

The UK is near the bottom of the European league table when it comes to readiness for e-government … The UK is well down both in terms of the sophistication of its systems and country readiness … Ireland, France and Finland were voted the top three countries … The results will come as a blow to the government which was criticised just six months ago by the Treasury in its so-called Green Book report. The study found the government’s targets and cost estimations were far too optimistic and attacked certain government sites for being poorly maintained.

I can’t disagree with reports that say we’re not doing as well as we should, but I also find it strange to be seen below, say, France or Ireland as, having lived in one and looked closely at the other, I don’t see the progress the reports do. Maybe it’s smoke and mirrors.

But, whether they are above or below is beside the point. Given the investment made and the profile of usage of other Internet services (say buying books or online banking), we’re nowhere. That clearly means a supply problem, not a demand problem. The emails to me over the last few days, both from concerned citizens and suppliers, just reinforces that message. I try to reply to all of the mails I get, the rude ones and the polite ones (I don’t have one of those rinky-dinky word filters on my mail system!).

The message is clear, government services online have to look a lot less like government services offline. Otherwise, why would anyone bother to make the change? If the site is slow, hard to use, difficult to find, or frustratingly obtuse, noone will bother.

I had a conversation with one of our supplier dinosaurs this week, one who has said enough is enough and wants to become more fleet of foot, more able to deliver. We pondered how a supplier can disagree with a customer, as in “that requirement is stupid, you need to do this instead of that”. This will help avoid the Green Book’s comments, articulated in PC Advisor

There is an empirically observed, systematic tendency for appraisers to be over optimistic in assessing projects … Optimism bias is caused by failure to identify and effectively manage project tasks … targets and cost estimations were far too optimistic and certain government sites [are] being poorly maintained … over the past 20 years, 54 percent of projects involving technical innovation and system development had exceeded their agreed timescales and a massive 200 percent had overrun budget estimates

I haven’t figured out how 200% of projects overran their budget estimates (unless they all did by such a large amount of money, it was the same as 3x as many projects getting it wrong?). But, again, beside the point … 54% of projects are late and more are over budget – and there can’t be any projects these days that the government doesn’t class as technically innovative. After all, most systems are 20+ years old.

So the folks from the supplier kicked some ideas around with us and concluded that there is no safe way to do it in government. If you disagree with the client, you don’t get the business. If you agree, then you find yourself in change control later – and you probably make more money that way. So we have a self-reinforcing system.

The real issue, as Mark Forman said a while ago, is that we lack enough people inside government who have experience of system delivery, coupled with business understanding. They do exist, and some big projects do happen on time and to spec, but the ones that hit the headlines obscure the successful ones. More such people are being drafted in, but they can’t come fast enough. In the short term, there needs to be much greater accountability at a senior civil servant level so that projects are reviewed, risks and issues are discussed openly and supplier and customer work together in an honest environment. Simple to say, hard to do. Harder to do across such a large (dis)organisation as government, harder still to do for every project. It’s going to take some brave people to try it out this way, prove that it can be done and perhaps embarrass the rest of the organisation into doing it the same way. Perhaps it’s time for project league tables – top 10 projects with start date, end date and budget, tracked publicly month by month showing variance? I’m for it … I’ll put mine in the ring first.

Content free, or content full?

I’m speaking at a conference organised by the Public Sector Forum people at the end of March. I’m being asked to talk about the “Central Government view on metadata and interoperability“, something that should be fun. The conference is on March 28th (recently moved from the 26th) – somewhere in Hendon. Book now to avoid disappointment – there are some good speakers there too. Particularly interested to hear Brighton and Hove’s story on developing a bespoke content management system. Been there, done that, don’t encourage anyone to do it unless you really are a masochist.

More excuses and apologies? Hardly.

Funny world that we live in. Just catching up on VoxPolitics after a week out of town and came across a link to Whitelable.org, a blog run by one of the FaxYourMP geeks (their word, not mine). It seems that my blog is full of excuses and apologies. It’s not personal, apparently, although everything I post is disagreed with. That’s ok, I don’t take much personally, so no need to worry about that. But, let’s be a little realistic here. 50,000 faxes does not knock down all of the e-government barriers folks, it doesn’t prove that you have cracked it and it doesn’t make me break out in a cold sweat wondering whether I’m doing the wrong things. Now, funnily enough, I don’t claim that I have knocked them down or cracked it (no, that’s neither an excuse nor an apology), but I do know that some of the things we’ve done are pretty good. 50,000 faxes is pretty good too, but it’s not democracy in action, not yet. But maybe it will be – the more PR faxyourmp gets, the better as far as I’m concerned – let the faxes roll. Less than 50% voting in a general election is a terrible reflection on democracy.

I’m always up for new ideas … the reason I don’t allow comments is because I can’t figure out how to get the blogger software to do that. If you know, let me know. In the meantime, I’ll watch whitelable for an actual idea that might improve things and I’ll continue to torture the English language as only I know how I guess.

Strange stuff

Some odd stuff going on with blogger these days. I keep losing the titles from previously filed posts. And today, it’s posting in reverse order, so as I look now February 18th is above February 19th on the page. Before it’s always been most recent day first. Not something I have time to fix today, so it will have to wait a bit. Sorry if it’s causing confusion.

Stats and bloody stats

Just checking my log files this morning to see who visits the site (both the diverdiver home page and this blog). Traffic is up about 250% since the Guardian piece by Mike Cross – and I’m still getting referrals from that funnily enough.

The other thing the log files give me is things like search terms used … here’s one “about mobiles physics not alabama not phones”, or how about this “fully executable e-government”, or even this “ibuprofen allergies”, or finally “unix error number 111”. I’m not sure if I’m not doing my job or not, as clearly it’s unlikely that those would have found much on this site. Strangely, each term was put in twice – I presume because the answers weren’t believed the first time.

One search that I thought should have found an answer was “what is e-goverment?”. That’s a deep question, but I doubt whoever was looking got the answer that they needed. I really ought to address what it is to me and I’ll do that next week.

Meanwhile, I’m away again for a few days. Be back early next week, so posts will be light (or, more likely, absent) until then.