Skip to comments.Lessons learned from Oregon software failures [NOT]
Posted on 04/16/2014 5:58:27 PM PDT by logi_cal869
Cover Oregons fizzled launch has been a high profile disaster for the state. After spending $160 million, Oregons health insurance exchange had exactly zero people sign up for private insurance in the first two months.
Now Cover Oregon claims to have enrolled 7,300 people. However, the fine print from the Cover Oregon press release reveals that the suspiciously round number is actually an estimate. In fact, Cover Oregon has not indicated that a single person has paid their first bill, which is the industrys measure of enrollment.
As with any bureaucratic failure, finger-pointing is an unavoidable stage. Rather than trying to figure out who messed up and when they messed up, we can use Oregons history of multi-million dollar software disasters to illustrate some valuable lessons.
1. Start small. Do one thing, do it well, then add bells and whistles. Google began with a search box. Thats it. It took two years before the company ran ads. Oregons software projects try to do too much, too soon, resulting in busted budgets and missed deadlines.
2. Off-the-shelf is another way of saying, It works! Use the resources that have already been developed and tested. Learn the lessons from other states and municipalities. We Oregonians like to think were special, embodied in the states old marketing slogan Things look different here. But, fact is, were not that different from any other state in the U.S. and in many cases we dont need one-of-a-kind software solutions.
3. Know your limits. Software firms specialize in software, so use them. Dont try to do it yourself. If you dont know what youre doing, then you shouldnt be overseeing the project. Cover Oregon was urged to hire a system integrator to oversee implementation of the Cover Oregon online exchange. Instead, the state decided to be its own general contractor and found that its staff had no idea what was going on.
A history of budget busting software projects
Oregon has a 20-year history of budget busting software failures. Cover Oregon is just the latest and the first to catch national attention. This year, it was revealed that the Oregon Employment Department burned up $6.9 million on a software project that never worked and expects to spend another $1.2 million to go back to the old system. Even worse, the Oregonian reports that the state may be forced to repay $1 million or more in federal funding because the project is being canceled. The Oregon Wireless Interoperability Network blew through $600 million before it was deemed a failure and laid to rest in 2011. The project was intended to migrate all of the state's radio systems to one system such that each of the systems could talk to each other. A scaled back State Radio Project hopes to salvage some of OWINs earlier work. Many Portlanders still recall the citys $35 million water billing software debacle. This was followed a decade later by a payroll and financial services software disaster costing $47 million, or more than triple the original estimate. The project was completed more than a year late, and did not include expected functions. In 1993, the Oregon Department of Motor Vehicles began what was projected to be a five year, $48 million project to automate its operations. By 1996, the costs had soared to $123 million. That year, the state pulled the plug on the project, leaving the agency saddled with useless hardware and programs according to the Oregonian.
The Affordable Care Acts requirements for an exchange are straightforward. With the delay in the employer mandate, only individual plans have to be offered on the exchange. The exchange is supposed to use your age and tobacco use status to determine which plans are available to you and whether you qualify for Medicaid. Then it collects you and your household financial information to determine whether you qualify for a tax credit/subsidy.
Instead, Cover Oregon opted for a cutting-edge exchange site that did more than was demanded by the Affordable Care Act. In addition to allowing consumers to shop for commercial health insurance, the Oregon site was supposed to be a one-stop-shop that allowed small-businesses to shop for insurance and to enroll eligible participants directly into the Oregon Health Plan, the states version of Medicaid.
Years earlier, Oregon had a similar experience when OWIN busted its budget in part because the state decided to adopt a highly sophisticated network design. Portlands water billing and payroll fiascos were guided by a vision to develop sophisticated systems to allow for virtually endless variation to satisfy an expansive range of users and situations.
In contrast to the Cover Oregon experience, Kentucky is known for having one of the most trouble free exchange sites. As reported in USA Today, Carrie Banahan, executive director of the Kentucky exchange relates, "Our system doesn't have a lot of bells and whistles.
Google is a $356 billion company that began with a simple ugly search box. It was simple and it was ugly, but it worked. And it worked better than anything else. It took Google more than 15 years to add all the services it offers today. And the search box looks almost the same as it did on Day 1.
Even the moon landing was a series of small steps. Watch The Right Stuff. The moon landing was just one giant leap in a series of steps that began with test pilots, space monkeys, Earth orbits, and so on.
Its OK to use off-the-shelf solutions
Politicians seem to have a deep disdain for off-the-shelf software: Were different. We cant use commoners software. But, lets face it. Were not that special and as a state were too small to support spending on a one-of-a-kind software solution. As a state, were not that much different from the other 49 states and our local governments are not that much different from the thousands of other local governments throughout the country.
Because Cover Oregon opted for a cutting-edge exchange site that did more than required, it was more difficult for the state to use off-the-shelf solutions. The Oregonian reports that Oracles implementation of the Cover Oregon exchange had thousands of lines of custom software code.
The OWIN experience is instructive here. The state opted for a costly custom implementation when off-the-shelf solutions were already out there. A post mortem of the project concluded management failed to fully utilize the available wireless infrastructure assets of both the public and private sector. Lower cost alternatives appeared to be readily available.
Portlands water billing fiasco was driven, in part, by a demand by the commissioner in charge to develop custom software to handle his vision of future water rate reform. An audit of the citys payroll and financial services software mess found that the original scope included non-essential items including the ability to generate custom reports.
Oregon was also given nearly $100 million by the federal government to be one of the first states to set up an ACA exchange. While there is some pride in being a pioneer, it comes at cost of having no one to learn from. As the old saying goes, The early bird gets the worm, but the second mouse gets the cheese.
Again, Cover Oregon could have looked to the disastrous OWIN project for some lessons. A review of the project found the project management failed to fully utilize cost savings lessons learned from other states.
Know your limits
Ben Folds sings, So why you gotta act like you know when you don't know? / It's OK if you don't know everything. Its a motto that public sector project managers would be wise to adopt.
USA Today notes that states successful in implementing the ACA exchanges had employed "systems integrators" to coordinate communications between the states websites, their Medicaid enrollment systems and with other state and federal systems. These states recognized that they dont know everything and hired someone who had the necessary knowledge.
The Oregonian reports that Oregon was urged to hire a system integrator experienced with Oracles architecture to provide expertise putting together the Cover Oregon exchange. Instead, the state insisted on using its own staff, who seemed overwhelmed with the project and the challenges presented.
The Cover Oregon disaster is just the latest in a long line of public sector software project failures. These failures provide a useful set of lessons for future projects: start small, look at existing solutions, and hire expertise when you dont have it yourself.
While the lessons are expensive, one can only hope that future projects can avoid repeating the same mistakes that have been made over the past 20 years.
"SW Portland shooting: Portland's emergency alert system failure isn't the first, city leaders cite 'growing concern' "
Which is a story about the failure of the emergency alert system (again) in the metro area...ANOTHER in a list of expensive failures, the most expensive being OWIN, the latest, of course, Cover Oregon.
I'm hoping I might spur others on to post RAT/Lib/Prog failures in their respective areas. Maybe Admin can even lump them all together under a specific tag, including all the Dem arrests of-late.
The problem is 3-fold: The LIV public have short memories, are subject to suggestive propaganda and the intelligent remainder of us simply don't have the recall to remember ALL the events that end up getting swept under the rug...
[Off-the-shelf is another way of saying, It works! Use the resources that have already been developed and tested. Learn the lessons from other states and municipalities.]
The problem with that suggestion is the governor doesn’t get to hire one of his cronies to design the program and get a fat kickback out of the deal.
The latest failure link:
No kidding. I’m sure every locale/state has a similar story to tell where there are lib bureaucrats running things.
The most epic problem in Oregon, seconded by education in this state, is PERS (public pension system), at one time headed by former Governor Neil Goldschmidt. Much on the web, but I’ve heard this book sums up PERS pretty well
And if your interested in ‘cronyism’, check this out from February of this year
Correction: I was trying to plug a memory hole and I can’t confirm that Goldschmidt ever headed PERS. I know he was involved at one time, but can’t find anything. Maybe later...
I shouldn’t have been so quick to correct my error...
It WAS a Goldschmidt that had been involved in Oregon’s PERS scandals: It was Governor Neil Goldschmidt’s WIFE, Diana Goldschmidt, a former member of the Oregon Investment Council, which basically manages the Oregon PERS Fund.
Much more scandal there
Yes, the corruption runs deep in this State...wonder why Cover Oregon epic-failed?
Oracle is mostly poison. Smoke and mirrors. Good marketing. Piss poor implementation.
And Oregon: The New Oligarchy (from 2002?)
and, since I’m going down the memory-hole here,
That 2nd link sums up the intertwining mess involving the coverup of Neil Goldschmidt’s ‘alleged’ rape of a 13 year old girl, kept secret for 30 years