Why Public IT projects Fail – Continued

Yesterday I commented on the status for the Property Registration System and mentioned, that another major IT failure seemed to have been hiding from the public eye – namely the wreckage of the Danish Emergency Management System. Normally I don't claim to possess a crystal ball, but today the news hit the World: Under the heading: ' The Prime Minister knew that the Emergency Management System was high risc', a paper from the Ministry of Finance dated May 16 2007 documented that the Minister of Finance, the current Prime Minister knew that the Emergency Management Project, a Dkr. 2 B + project, was evaluated at high risk, 4 out of a scale 1 to 5.

This document was originally confidential, confidentiality raised in August 2007, when the contract with the consortium led by Motorola was signed. But the contract – although a major investment – did not cover the 'control room SW', which was out for tender and not signed before 2008.

This contract was won by Terma, a Danish company until then only known for it's supply of high tech military systems, radar controlled defense systems and firearms control systems for helicopters, fighters and ships. The contract value was at the time estimated to be a mere 200 – 250 mio Dkr. For the Control Room SW including 4 years of operation, as opposed to a total budget for the entire emergency management system at 2.718 Mio Dkr.

At the time of the evaluation, the Ministry of Finance could not include Terma and the contracted solution (that also included Intergraph and a couple of smaller, Danish companies) in the risk evaluation. So the reason a '4' was the result, was a combination of 4 for organizational complexity, 4 for technical solutions, 3 for vendor risk and 5 for complexity of stakeholder interest.

As a contingency plan to reduce/meet the risk, 193 Mio was set aside as a buffer, and the conclusion was, that if any of risks materialized, the consequences were thought only to impact the project plan and the budget.

At this point in time it is clear beyond any doubt, that although the control room SW contract only covered a mere 10% of the total project cost, this part of the project has failed completely, Terma's Staff for has been fired, and the department Public Safety, created for the occasion, has been dismantled. The Government Attorney is currently handling the case.

But as I mentioned in a blog, the Government Attorney is no programmer, and this will not create anything but a financial resolution of the conflict between Terma and the Government.

The secretariat set up to handle the emergency system – SINE – has been radio dead around this.

See their homepage at http://www.sikkerhedsnet.dk/om+sine.

So how can we determine what went wrong? If you look at the SINE homepage you will find a link to European Tetra-net projects that more or less all seem to have succeeded. What went wrong in Denmark? What is different and why couldn't we just adopt this seemingly uninteresting piece of technology and enable the fire brigade to talk to the police and the rescuing service to the civil defense units? There are several answers to this question:

1. Underestimation of the importance of the 'control room SW'.

2. A very complicated and partly conflicting group of stakeholders

3. A lack of a systemic overview of both tenders before call for tender

4. An steering committee consisting of gatekeepers instead of decision makers

5. Lack of understanding of the competence level of the winning company (Terma)

6. Lack of understanding of technological improvements in the emergency mgmt arena

As is clear from the international references, the Tetra net is not a very complicated technology – it has a rather small bandwidth, but in case of emergency you could deal with only limited amount of data and voice interchange. Also Motorola is known to have skills and competence in this area, but the exchange between different organizations was explicitly placed in the second call – 'control room SW' – that also covered integration with GIS (Intergraph) as well as links to all the different organizations variety of communication media – plus an integration layer to back end systems like the Central Personal Registration system, interface to local office systems, hospital exchange, and interfaces to privately operated ambulance services and in some areas also fire brigades.

The complicated mixture of stakeholders were supposed to be coordinated by the Police, that although in practice more than 80% of all cases of (day-to-day) emergency management calls do not involve the police. And the police was in the middle of a major reorganisation, where this system was just another brick in the wall. The tender was headed by the Agency of Economy, part of the ministry of Finance, and the Emergency Management organization was merged with the Ministry of Defense a few years earlier and was probably looked upon as a sort of step child here. The complication also included the above mentioned private ambulances and fire brigades, covering about 50% or more of the local Government emergency services.

The lack of systemic overview before the 2 tenders calls for a reevaluation of how and why Gartner Group, hired as a consultant company to prepare the tender, could overlook the key role of 'Control Room SW' and underplay the importance of technical interoperability between the different stakeholders and not least the level and complexity of change management to ensure the take-up of the solution by all major players.

It seemed that the steering committee probably covered the right institutions: Ministry of Justice (which includes the Police) acting as chairman, Ministry of Finance, Ministry of Defense, Ministry of Welfare, Ministry of Science and Technology, Association of Municipalities and Danish Regions Association. Until proven wrong it is my hypothesis that the steering committee meetings concentrated more on status of progress, spending of money rather than risk management and change management like acceptance and enacting of the various groups 'in the fire' literally speaking. If stakeholder committees act as gatekeepers, it is at best an advisory committee, not a steering committee. In stead the head of this group should have been a dedicated 'CZAR' with sufficient decision power to change events – if possible by changing the contract.

Lack of understanding on the proper level of competencies and vendor capabilities. Terma had never before worked in the field of Public Safety; nor had they ever participated in major SW integration tasks with administrative stakeholders – their use of standard systems was and is 'Java'. When the contract negotiations squeezed Terma, they skipped partners that could have provided the skills and muscle, that Terma obviously did not possess when the signals of crisis were raised. And because of the nature of public tenders, they were allowed by a steering committee to continue for too long.

The lack of understanding of concurrent technological development was another reason, why the course was not changed; over the last few years the terminology 'Unified Communications' and 'Collaboration Services' has been greatly improved, mainly led by the defense forces, but using standard SW components and basing communication of the Internet. To day at least 2 vendors offer SW capability for multi-platform same-time support of communication systems supporting both Tetra Net (Motorola), standard mobile communication channels as well as highly sophisticated and encrypted VPN tools for same-time video conferencing, exchange and overlay of Geographic information. ( See CISCO Solution, IBM solution )But nobody was allocated to watch this field while the hand coding of Terma progressed. This could actually have saved the project – if attention to the acceptance of the solution by all stakeholders also had been in focus.

Why do Public IT-Projects fail?

On May 21. the Danish Technology Council is inviting to a workshop under this heading. They have invited several specialists to present points-of-view on various aspects, and I am invited to comment on the need for standardization and architecture.

As this is central to the eGovernment course I am preparing for the Masters' education at the Danish IT University from this autumn, I welcome the initiative and the opportunity to discuss with some of the victims as well as meeting the people, that are classified either as 'rascals' or at least passive viewers to the mess, that admittedly seem to have happened a number of times.

This is not the first time the Danish Technology Council has focused on the topic; in 2002 a special group was created headed by Erik Bonnerup, a renowned public sector manager with a past track record of CEO also for KMD, the large Danish ICT-company focusing on municipal and regional computing.

The report from this group to a large extent has since been acknowledged as the best of it's kind, but unfortunately 8 years after the recommendations have not seen to have influenced the success rate much; The Govt. Audit Authority recently came to about the same conclusion as the Bonnerup committee, that hardly any public IT project meets it's objective nor sticks to the original project plan nor budget. The auditors point to the point that unforeseen complexities account for the majority of reasons for delays and budget overrun.

Having spent 39.5 years with one of the major suppliers of ICT technology to the Public sector, I recall numerous situations from way back – the Illness Insurance Project in 1972-73, the new Financial Management system for regional and local Govternment in late 70'is, the financial management system for all higher education centers and schools in the 80'is over the so-called Amanda project for the unemployment services in the 90'is, the Procurement Portal supposed to save billions for the public sector purchase agencies, to the original VIRK-project – a portal for all enterprises and their interface to the public - and to todays major flops – some well-known like the current problems with the digitization of the Property Registration System/cadastral System in Denmark – and some very well hidden but real disaster projects like the failure to deliver an emergency management system covering police, rescue services, hospitals, fire brigade and civil defense.

One thing they all seem to have in common is that all projects had a distinct borderline between the IT-project and the organizations, institutions, users and 'customers' = citizens/companies/other Govt. Institutions. Almost in all cases the vast majority of effort in the preparation phase has been allocated to a detailed specification of the functionality of the IT system, often to a degree where 80 % of very detailed requirements are specified as 'mandatory', and only in recent cases the requirements have also covered 'non functional' requirements – such as scalability, response time, security.

At the same time Denmark has been more and more focused on a very strict interpretation of the EU tendering regulations, and this leads to a situation, where innovation during project delivery is forbidden, where the public sector's project managers stick to the contract and not to possible changing realities, new technological development, even new happenings in the market place and environment.

Some of the recent thinking points to the lack of centrally defined mandatory strategic guidelines and a centrally defined IT Architecture for the public sector. The guidelines issued by the Ministry of Science and Technology were issued 3-4 years ago, but they are not mandatory, and to some of the municipal managers they may seem too academic and too far from day-to-day operational need.

Although I do agree that Enterprise Architecture definitely is part of the solution – in as much as the idea of EA is to couple management and ICT capacities according to the strategic business processes – I fear that a request for a centrally defined all-encompassing EA for the entire public sector will hamper innovation even more – and even stress some of the reasons for failure, that in my perspective are much more severe: ICT projects are defined too narrowly, too technically, and hardly never ever try to cover all the aspects of organization theory, social impact and the vast amount of knowledge that we have accumulated from non-IT studies on how technology are able to enable the performance of organizations – and recently even more the behavior of networked agencies and organizations, where the most ambitious ICT projects nowadays are being implemented. I will come back to how I view the possibilities of defining a Danish framework for EA in Government.

The Property registration System (link in Danish) is notorious in several ways: The government notary functions report to the institution called Domstolsstyrelsen, the agency that are controlling the administration and work of all courts in Denmark. The specific Land Registration Notaries are extremely sensitive for buyers and sellers of property, as registration is required to obtain financing, sell mortgages and start building or modifying on the properties sold. It started as a major analysis made by DeLoitte in 2005 with general use cases, project plans, overview of document types, a logical data model, benefits and costs – and a suggestion that the project could be finished end 2007.

To head the project a well known person with ICT background from the IT Task Force was selected – Adam Wolf. A very skilled person but none the less with an ICT background. The project was started based on DeLoittes recommendations.

After some delays the project was delivered by CSC in the autumn 2009. Immediately it created huge problems in the handling of the various document types already somewhere in the process, some of the delays noted were now several months – causing real financial problems for a lot of people. A request has recently be made that the private persons or small companies are reimbursed for their excess costs as a result of the delays. To this the CSC project manager in February responded, that 'The IT project was run according to plan – delivered at the approved time, and has been operating with an uptime of 99,8 since!'.

And today in Berlingske Tidende Adam Wolf states that 'The Property Registration System is an excellent solution that got an unfortunate start'. Adam W points to all the manual processes, that were 'extraordinary' including a 'backlog from the old system' stating that 'It was the (manual) case management system that didn't perform – not the IT system.'

In my opinion this simply underlines my argument that most of the problem is that the modernization project has ONLY been focused on the technical and technological aspects, including coding of the functionalities as stated by the changed legislation. What has NOT been considered has been the process to imbed the technology in the organization, including the handling of interfaces with the suppliers of data and information. Any sociologist will ask questions like how the acceptance, enablement and management of the change project was handled seen from the human and intra-organisational way. The political management behind the reform should have been advised that the change required more skills that ICT project management, and that human process knowledge and management are even more required in situations where processes are changed, where employees get unfamiliar tasks, when demands fluctuate and when traditional bureaucratic controls are used in stead of human motivation, establishment of social networks and encouragement of the new 'super users' as partners and mentors for those in need. This type of failures are common for all the projects, mentioned above – plus some specific blunders in each of them, of course.

So the future solutions are depending on:

1) Framework Enterprise Architecture and mandatory, selectede standards for API's

2) Less strict interpretation of EU tender rules with room for innovation and stepwise improvement of mutual understanding between stakeholders

3. Review of change management team – including sociological and organisational projekt management emphasis

4. General acceptance of performance measurement system including employee take-up of new IT projects

I will be back with more comments concerning the wrecked Emergency Management System – SINE – other points of learning can be obtained from this. ( And – as a sort of competition: May I ask by readers to try to google any relationship between Økonomistyrelsen, Terma, Sine and the Tetra Net. Somebody REALLY has a way of making clean ups!)

Om Danmarks første computer - Af Kai Mortensen, tidl. IBM

Jeg har fra Kai Mortensen, pensioneret servicetekniker fra IBM , modtaget denne herlige beskrivelse af SASCO I - og om de første 'rigtige' computere i Danmark:

SASCO I systemet bestod grundlæggende af 2 stk IBM 1410 computere.

Disse var tredje og fjerde IBM 1410 systemer i Danmark,

og blev ikke efterfulgt af flere.

Første og anden IBM 1410 system blev installeret i 1962 hos henholdsvis Dansk Folkeforsikring på Otto Mønsteds Plads og hos den daværende Handelsbanken på Frederiksholms Kanal, begge i København.

Dansk Folkeforsikrings var den første, og blev dengang udråbt som Danmarks første computer.

Den blev hentet på IBM's fabrik i Essonnes ved Paris under megen presseopmærksomhed i en specielt luftaffjedret lastbil, som ikke var almindelige dengang, og som var overmalet med hvad dens last var, og ”Danmarks første Computer”.

Dansk Folkeforsikrings direktør fulgte lastbilen på hele turen i sin egen bil.

Begrundelsen for at kalde den for den første computer var, at den som den første kunne multiplicere og dividere direkte, og ikke blot addere og subtrahere på samme måde som tidligere regnemaskiner, og som også mekaniske regnemaskiner gjorde det.

Om begrundelsen var rigtig, skal jeg lade være usagt, men for commercielle computere passer den formentlig.

Den blev dog næsten omgående overgået af en IBM 7070 hos Datacentralen.

SASCO I systemet blev også bygget på fabrikken i Essonnes, og måtte til formålet udbygget med funktioner til at kommunikere med reservationsterminaler (agentsæt), fjernskrivere og skrivemaskineterminaler.

Begge systemer blev opstillet på fabrikken i 1963, og et større udviklings- og testarbejde på såvel hardware som software blev påbegyndt.

Software blev udviklet af vor kollega fra system engineering, Søren Brandt.

1410-enheden bestod normalt af 4 sammenbyggede skabe, hvoraf det første indeholdt strømforsyningen, og det andet hukommelsen, som kunne være på enten 40K, 80K eller 100K 8-bit tegn. Vi startede med 80, og endte med 100K.

SASCO I systemet måtte imidlertid udvides med et ekstra skab, som blev propfyldt med førnævnte specielt udviklede netværksfunktioner.

For at kunne skifte netværket mellem de to computere blev der også udviklet en speciel omskifterenhed til formålet.

På billedet øverst kan man se, hvordan elektronikken i IBM's 14xx og 70xx systemer så ud dengang. Kortene havde trykte kredsløb på bagsiden, men forbindelsen mellem kortene skete med kobbertråde, som vikledes om de pinde, man ser forneden.

På grund af disse specialiteter var vi fire serviceteknikere fra Danmark, som blev koblet på projektet i december 1963 for at lære systemet at kende, og deltage i arbejdet til det var færdigudviklet omkring maj måned 1964. Foruden undertegnede var det Per Løve, Keld Nielsen og Ole Truelsen.

Det færdige resultat blev herefter transporteret til Danmark, og installeret i Københavns Lufthavn.

På det tidligere publicerede billede af SASCO CENTREt på denne Facebook-gruppe sidder personen til højre i billedet ved betjeningskonsollen til den ene 1410, og modsat ham står konsollen til den anden 1410 med bagsiden til.

Imellem de to konsoller sidder en kollega ved en skrivemaskineterminal med ovennævnte omskifterboks overfor sig.

Længere til venstre ses en række båndstationer, hvoraf de to længst til venstre er papirbåndststioner, som kan læse såvel 5-spors som 8-spors papirbånd.

Desuden havde centret 2 stk IBM 1403 kædeprintere og 2 stk 2540 kort-læser og -huller.

Endelig havde anlægget 2 stk IBM 1301 pladehukommelser. De kom fra USA og var derfor bygget til 60 hertz strøm, så for at klare dette blev 2 stk roterende omformere installeret på loftet over maskinstuen sammen med kølemaskiner m.v.

Teknikken på disse var en videreudvikling af IBM's 305 RAMAC, og i modsætning til denne var 1301 forsynet med et læse- skrivehovede for hver pladeside som vist på fotoet til venstre herunder.

Hver 1301 kunne rumme utrolige 50 millioner 8-bits tegn.

Da udviklingen løb fra 14xx og 70xx systemerne blev IBM's 1410'ere udskiftet med Univac computere til flyreservation.

Venlig hilsen

Kai Mortensen

NB: En gruppe SAS-veteraner har lavet en hjemmeside med deres side af SASCO-historien på http:/www.g-hit.dk/historie.htm

BIOMETRICS - The Danish Perspective

To day I had the pleasure to participate in the network for Biometrics in Denmark. The network was originally established by Frederik Kortbæk, DeLoitte and others, and todays' meeting had 3 major elements, at status report from the Danish National Police on the biometric passports, a presentation on identity management by Omada, and a user report from the leading architect of the Capital Region, the organisation responsible for hospitals for 1.6 mio inhabitants in the Greater Copenhagen Area.

The representative from the Danish Police was Mrs. Lene Gisselø, a lawyer, presented the status of the bio passport. The passport is based on the EU Directive 2252/2004.

The directive is of course based on the increased focus on terrorism, and demanded the member countries to implement a 2-step strategy, first passports with photos of the card holders, which has always been the case in Denmark, and 2. step due in june 2008 to implement biometric fingerprints as part of the passport. (See the Technology Board report on Biometric Passports - where it is pointed out that also illegal immigration is supposed to be less after the bio passes are introduced. )Denmark is lagging behind the original target date, and in spite of a tender issued 2 years ago and supposed to be closed months ago, is still not signed. The tender called for multiple types of equipment to be used by the municipalities, by the foreign office's representations around the World and by the department for immigrants in Denmark. It was stated that one of the reasons for the delay is the lack of funding, as the preferred vendor was well above the allocated budget.

What wasn't mentioned was that in the meantime 20 municipalities out of the 99 already have established a local workplace to issue not only passports, but also driver's licenses, motor vehicle licenses etc. If the budget discussion drags out much longer, the wisest thing to do will probably be to drop the tender and open a new one based on the experiences with the municipalities.

Lene Gisselø presented all the security features around the Danish passport and pointed out, that even if the holders' picture and fingerprints were stored centrally during a 3-5 week period until the passport was duly delivered to the holder, there would be no centrally stored register on biometrics of the data – 'even if it would have benefitted the police'. The locally captured data is encrypted, the BAC method used to store the photo, and EAC to protect the fingerprint data. Also Lene G. discussed the enormous task of cross-certifying all passports within the European Community.

From the audience a question was raised why the Police didn't choose the 'Match on Card' method for authentication in stead of 'Match off card'. The issue here is that when the border police checks the passport, the passport officer takes a photo of the visitor, takes a digital print of the fingerprint and then let the SW on his workstation extract the data from the passport, convert to some sort of algorithm (which may vary between the countries), and then makes the comparison based on his local algorithm. This means that the data from the passport has to be extracted and at least for some time resides in another computer. The alternative method would be to have a chip residing in the passport with the capacity to perform the comparison without having to extract any data from the passport. Lene G's answer to this question was that is was what met the EU defined standard specifications. This of course raised the question if other countries in Europe were legally prevented from storing biometric data from Danish passports, and the answer to this is, that probably there is no legislation in place to prevent this. For instance UK and Netherlands have active plans to compare the extracted data with the criminal records. The representative from the Data Protection Agency, Janni Christoffersen, pointed out that although the Privacy Officers' forum, the WP29, was looking at these issues, no common agreement has been reached yet. See this excellent book on other outstanding issues regarding use of biometrics, commented buy the WP29.

The question after the presentation remains that one might wonder what will happen to the tender and the selected solution now 12 months after deadline while the World is changing and technology progressing.

The second presentation on Identity Management from OMADA corporation was an OK run down of the issues of ID management, but it clearly showed the lack of standard solutions in a Microsoft world based on Sharepoint, where Omada clearly filled a gap in providing multiple roles access management admin solutions, deploying even Kerberos in a federated security environment, but compared to the solutions offered by for instance the Tivoli portfolio and a Websphere environment, the presentation was not that ground breaking.

The 3^rd item of the day was presented by Claus Thorsen, who is the lead enterprise architect from the IT department of the Capital Region. (Region Hovedstaden). This is a merger of 3 former counties, the Island of Bornholm and the city of Copenhagen. They are responsible for the health care and the 12 public hospitals int he region, producing more than 800.000 in take patients pr. year.

Claus' topic was based on the defined need for a single sign on solution for use in the hospitals; One hospital department (Gentofte) claimed, that due to the security regulations, logging on/off, changing workstations, registration of patient data at centrally placed terminals etc. required one additional medical doctor.

Against this, the National Health Domain committee has come to the conclusion, that only 1.2 minute pr. day is waisted because of long log-in procedures.

Claus took us through all the tedious steps required to register patient data, and where he hoped that 'some day' a biometric solution would help. One example is the use of the so-called Medical Card, introduced to increase patient security, so that the doctor checks that the right patient is getting the prescribed medicine. In order to access this application, the doctor is required to use his digital signature issued by the hospital. When he has signed and logged in, he has to make an additional log in using the digital signature to access the Medical Card application. But what happens if the doctor is ill and a substitute has to do the checking? You can't have fast track issuance of official digital signatures, and the result is that the doctor's from time to time borrow each other's digital signature. And this is only one example.

The most promising solution at this stage is to use virtual desktops, so that the desktop of each doctor remains 'active' in a sort of private cloud, so that it is much faster to check in at another terminal later. The Virtual Desktop Infrastructure is one possibility, but the enormous variation in clients and PC-equipment makes is complicated and difficult to implement this at a large scale.

So the biometric solution to assist in an almost-automatic sign on, could be helpful. But so far the conclusion is that you cannot just have one biometric solution: In the operations theatre you need to wear a mask, hence you can't use face recognition. If you wear glasses, Iris recognition is a problem, and if you want to avoid congestion, fingerprint readers (and even keyboards) are doubtful. As Claus put it: The problem is, that we are users, we are many , and we are poor!

The long range solution is probably a combination of RFID active tags and biometrics, but it remains to be seen if this can be implemented in a practical way. Yet the Region intends to start a number of pilot projects, because the problem is real – the workload around log in/log out is simply too heavy – either it takes too long time, or the doctors and nurses are cheating to ensure quality of patient treatment.

To this statement Janne Christoffersen from the Data Security Agency pointed out, that the privacy legislation 'definitely has no intention to be a problem for daily operations, as it only required, that the doctors and nurses only has access to the data, that are necessary!'

'This is exactly the issue,' Claus Thorsen declared, 'For who knows what data are necessary? Take use of Antabuse! If this is an information that is not revealed to the Doctor, the patient might be seriously mistreated!' This seems to be a very central point in designing an up-to-date privacy legislation, that ensures a more holistic treatment of patients.

The next question, equally central for the discussion, is whether Claus' Region are coordination or cooperating with the other regions, and why this is not a centrally managed development program.

The representative from the Health Domain Steering Group - (Digital Health is an organisation supposed to coordinate anything within the health domain) – claimed that they weren't funded to do this, which again lead us back to the fundamental question on whether the Regions should continue inventing hot water all of them or if the Government should step in and define real areas for centralized solutions.

But a very interesting and down-to-earth real-life presentation with lots of areas where a combination of new technology and use of biometrics might be helpful.

Following this presentation, Ulrich Østergaard from CardLab presented the biometric card that they were trying to introduce in a number of countries. As can be seen from their homesite, this seems to be very promising – the card contains an active RFIOD chip, it has a fingerprint reader, which can be used by the proper owner to turn the card on, and can be equipped with various passwords, digital signatures etc. Looking forward to see some pilot projects based on this idea – and of course combined with proper ID/access management systems on the network.

2 days with Chris Potts – Good Bye to IT as we know it!

(Breaking down the wall around IT !)

This week I spent 2 exciting days at one of Chris Potts' seminars on Corporate (IT) Strategy.

It certainly was an eye-opener for me, having lived through all stages of IT since the 360 mainframe.

A few years ago when Enterprise Architecture became the hot topic, we all agreed, that one of the fundamental problems of this world was to align business and business strategy with IT and IT strategy – but all this is nonsense, according to Chris Potts. 'You shouldn't have an IT Budget' was one of initial remarks. But after 2 days I am convinced he's right and that this new approach leads to complete different and much more meaningful business decisions, investments and methods of managing complex portfolio of projects – including projects heavily relying on IT and technology.

However, Chris' point of view is completely different from Nicholas Carr's 'IT Doesn't Matter' kind of approach trying to persuade business managers to spend less on IT, to follow in stead of leading at the 'bleeding edge'. Chris' point is straight forward: As you cannot do anything business wise without deploying 'some' IT and some technology in it's broadest sense, than there is simply no reason in treating IT 'projects' and IT spending as if it is an animal of it's own. What is even worse is, that this tradition has been thriving on the 'IT specialists' that have kept the WE and THEM paradigm in what Chris Pott calls the second generation II era. Fueled by crisis and downturn, the 2. G people are 'cutting down on IT spending' instead of asking the obvious question: What Value do we get for it? Which are the key business investment areas we should be concentrating on and first at this point maybe wonder of technology could be deployed in these areas in a smarter way than to day.

So it is not about cost, it's about value. (Even accountants are beginning to admit this!) IT in itself creates no value – as if we didn't know it, the sinister implication is that the public sector's (IT) projects being launched these days are all being selected according to the strict EU tendering rules focusing on minimizing cost and securing 'delivery' – meaning fulfillment of a development/deployment contract at a specific point in time at a spefic cost – but where is the value of the project?

Chris' observation not only leads to the clear conclusion that the perceived outcome in terms of value of a project not only should be the guiding principle, but that the whole accounting process around project selection and project management is completely wrong:

Any project – and public sector projects in particular – should be selected according to their contribution to value – maybe cost reduction is one of them, but in that case total operational costs. Also transparency could be a very interesting value of a public project as could citizen participation and take-up of eGovernment projects. So the estimated impact on all essential types of value is absolutely meaningful, but ONLY if the project management is measured on how the value of the project is created AFTER it's fulfillment. We are deploying 2. generation project managers maybe skilled in PRINCE 2 to deliver 4. generation solutions deploying web 2.0 technologies and aiming at involving citizens – but we are not measuring it.

One of the latest scandals in Denmark is the project dealing with electronic bonds and real estate registration. According to CSC's project manager 'The IT project is a success – we have a service level of 99.5% availability and we have had that for months!' - but reality is that now it takes anything from 4 to 8 months to register a sale of a real estate. Again – the tendering rules selected the winner of the development project, but didn't in any way measure, secure or include the total costs of the process, let alone found it necessary to manage that real value was actually achieved.

(See this blog: (In Danish) http://it-bizzen.blogspot.com/2007/11/csc-forsinker-hurtig-tinglysning-it.html )

So Chris Potts lesson is that you need to go to the thirds generation thinking: focus on the value people are getting from projects involving IT and employ BUSINESS experts to ensure this – not nerds, npår technical people – not even 'Enterprise Architects' still stuck in the THEM/US thinking.

But Nirvana only comes if you forget IT completely – drop the idea of a specific IT budget, think in terms of business organization and embed the investment and management issues of IT in the proper context.

In summary: From Chris we learned how to make an overall Corporate strategy in one page – with a clear strategic objective, with max 10 basic principles and/our beliefs and max 10 core tactics.

I can clearly recommend this seminar and the thinking behind it to any 2. generation frustrated IT manager or to any forward thinking CEO. If you happen to be employed by the Public Sector, I have to warn you, though: Your politicians are all 2. G, the rules are from last century and the narrow budget thinking is killing many bright ideas. But if you don't try, we might face 'civil unrest' – when the new generations used to web 2.0 technologies demand a decent way of thinking what value the Government is really bringing to the table!

(See also http://www.aeaassociation.org/ )

IT History - Fractions from a Journey

On December 30. I had my last working day with IBM. After 39½ years I received a very nice offer, and yet it was a strange feeling trying to summarize all the changes I have lived through since I joined the IBM Denmark company in 1970. It wasn't really my intention to make a career out of it – I graduated as a Master Economist, but I got interested in Data Processing, and decided that the best place to learn more probably was in the department for Operating Systems in IBM. At that time the Disk Operating System (DOS) was being outdated by OS that came in two brands: OS/MFT (Multiprogramming with a fixed number of tasks) and OS/MVT for the REALLY big machines allowing a variable number of transactions concurrently.

The picture here is me in 1970 and the photo was illustrating 'Modern Data Processing' in the Danish encyclopedia. It was a 360/40 – huge machine, 256K memory.

Over the years a lot of rather dramatic changes occurred – both in the way the Company was organized, in technology and in the competitive landscape. I soon got captured by the Government Branch and spent most of my career working with Government in some way, interrupted by assignments in Stockholm organizing and running Sales School and internal Training in mid 70's and handling staff job in the early 1980's and again in the mid 90's.

My first job was with what became one the 4 DP Centers for the Kommunedata organisation, and the first center to work with typewriter terminals to run financial management systems. 5 years before the color screens and the Systems network Architecture was announced. I later become responsible for the entire local Government and Health Care market, which had a fantastic growth in the late 70'es

IBM changed dramatically in the early 80'es – we had been split up in 3 divisions, DP (the Large Customer segment), GB (mid size machine and small and medium customers) and the DCS - the Data center Operations. The split was made to prepare for a split up if a court ruling found IBM guilty in monopolistic behavior, but thanks to the growing competition from Amdahl for the high machines, Memorex and similar for peripheral and Digital for mini computers, IBM avoided to be cut up and instead pooled the resources. Then in 1981 the IBM PC suddenly emerged as a new star – based on standard components bought on the open market it seemed to be the brand name that sold the product. I was asked to organize a group of system engineers and salesmen to conquer the Danish Education and Scientific market for the PC's, and I had the pleasure of interviewing some 300 teachers before hiring 6 of them – with sweaters and hairy faces and everything. Plus a nice lady, a French teacher from a high school. In fact we succeeded in just 4 years, the mantra was that it was not the question of the Hardware but how the software could help the teachers. It worked – and I still recall the first IBM PC we sold with 2 diskette stations, 256K for 7.000 US Dollars (35.000 Danish Kroner). At the end of the 80'es and early 90'es I was responsible for Market Development for the Public Sector (including Post, Defense, Central Government, Tele). At that time it was dawning on IBM's management that the business model had to change and that we had to charge for our skilled Systems Engineers and Networking CE's. The Business Consulting area began to be the hot topic, but my position - together with some of the former Government Branch Managers - was that it was important to marry the consulting skills with deep industrial knowledge. We lost the argument, and the General Business Consultant emerged, later to be split into practices and boosted by the subsequent purchase of Price Waterhouse. (See: Seven Keys to Success )

In the 90'es a new thing emerged – the Internet. Although I already got acquainted with it during my job with the University Sector, it wasn't until around 1994 that it became clear that a new market was emerging; I started a fantastic group of quite young people, creative designer-types and long haired programming freaks plus a couple of deeply engaged old time Systems Engineers. Within just a few years we managed to create first-of-a-kind of websites for Copenhagen City, a number of Danish Companies, plus launched the first secure payment systems on the Internet. And then suddenly – it all became 'pervasive' – which in practice meant that the profit margin for doing websites and similar solutions were coming down, and that the new business model would call for a value chain of Business Partners and IBM withdrawing to delivering the SW platforms and intermediate layers.

So the turn-around of the Company mid to late 90's architected by Lou Gerstner, once again laid to a dramatic change in organization, and started the period of active acquisitions, that Sam Palmisano carried on. As of today, the organization is split in divisions reporting to global or regional managers, and the coordination that is necessary in every major customer engagement handled by a an all-encompassing CRP and accounting system and strict procedures for bidding.

Since the end of the 90'es I have worked internationally as an eGovernment Advisor in a job working with the public sector and the Software group – plus of course a number of dedicated business partners and our GBS people that on and off have supported Public Sector.

This has been an enormousinspiration, has brought me to the Middle East working with the forward thinking Governments in Dubai and Quatar, I have witnessed and supported the Baltic Countries in their quest to outgrow the older parts of Europe, with Iceland, with the Nordic Countries and during the last few years with Greenland and the new Greenland parliament, which I hope to continue as a ppensioner.The dramatic changes in the IT world since 2001 and the rise of the Open Source Community is a trend, that I expect we have only seen the tip off. When Cloud Computing really takes off, the business model for selling Software Licenses will change once again and the new competitive landscape will be different from anything we have seen so far. Google probably aiming to become the next top competitor and Microsoft standing to loose.

And this may be some of the reasons IBM has survived all the turmoil – at least during my 39½ years: We have always been careful to select the battlefield. The competitors we had in the late 70'es were all gone 10 years after; the competitors we had in the 80'es have almost all disappeared, with HP as an exception. And with IBM now launching the Smart Planet approach and going for Software as a service and supporting Open Source, the competitors in 10 years again will be a different crowd. An old IBM'er told me 25 years ago that IBM meant: I'll Be Moved – because the mantra of the company is change.

So I will. And I have promised to start to document IBM Denmark's History. It started January 1. 1950 as a local Danish Operation. It shouldn't be too difficult – after all I have lived through 2/3 of the history myself!

Eurocities Annual General Meeting

Stockholm Nov 25-28

The Eurocities organization that covers a number of the largest and most advanced cities in Europe, last week had their annual general meeting in Stockholm during the Swedish EU Presidency.

The main theme of this year's annual conference was of course focused on the upcoming COP 15 meeting in Copenhagen and the working theme name was 'Urban Challenges – Sustainable Solutions'. (The entire conference is available on line using this link - http://media.fronto.com/streaming/eurocities/091126/Default.aspx – you have to sign in first, but then you are in there, really a nice solution)

The mayor of Stockhom, Steen Nordin (M) welcomed the participants and explained that a large part of the program was dedicated to a number of green projects that participated to Stockholm's nomination as the Green Capital of Europe. Eurocities president, Jozias van Aartsen from Hague likewise expressed the hope that the conference could be a clear sign to the World that as the majority of the global population is now living in cities, the cities themselves are not longer 'just' the problem, but very much important players to solve the global challenges and the global warming in particular, but also the key areas where Eurocities has been active and where 3 awards were due under the headings of 'Innovation',' Participation' and ' Cooperation'.

One of the most interesting and engaging experts on international Health, professor Hans Rosling from Karolinska, then presented a breathtaking tour-de-force of numbers to describe how the World has changed and how all our prejudices dividing the World in 'They' and 'We' were no longer valid.

Look at this shortened version of his speech: http://paulchaffey.blogspot.com/2009/11/hans-rosling-om-utviklingsland-og.html

Under the headline: 'Sustainable Solutions for Business, Science, People and Culture' the conference split up in 9 groups and went on bus tours to study practical experiences and cooperations between Stockholm city and private and public organizations.

For my part I joined the tour to 'World Leading ICT cluster' at Kista, which in fact I have followed from its' early beginning with Ericsson and IBM as the first partners. Now more than 30.000 jobs have been created in more than 200 ICT companies in Kista. Really impressive and a positive experience and clear signs that the crisis is almost over in Sweden.

The other tours were labeledFuture Suburbia' – renewing Järva, a suburb from the 60's built to meet housing shortage and now in need for renovation - 'Teleco

m for green Cities' – a Visit to Ericsson Headquarter also describing the Intelligent Transportation System in Stockholm, where IBM performed the coordinating role – the 'Intelligent Electricity Project' – smart grids, smart electric cars - 'Creative cluster'- sustainable design in an industrial regenerated area - Mobility flows' – showing how the public bus system was converted to Biogas, also descr

ibing the Intelligent Traffic system - 'The Hammarby Model' – Integrated management of Waste, Water and Energy to 'Heating the city' – showing how 80% of the heating comes from

renewable sources and finally 'Low carbon Urban Transport'.

It was a tremendous well organized 2.5 hours extension for everybody and it was really impressive!

The plenum meeting was then led by mr. Ballasteros from the EU commission on the topic of 'the Covenant of the Mayors':

The evening program called for a galla dinner at Stadshuset, in the Blue Hall, where the famous Nobel Price ceremonies take place. The evening called for a reward to the cities that had earlier been presented as nominees for the categories Innovation, Participation and Cooperation.

Winner for the innovation group was the city of Malaga, that had developed an interactive map in 3D to optimize localization of solar energy batteries. Birmingham won the category 'participation' with an interesting project on building an 'eco-village', and finally city of Dortmund won the prize for Cooperation by an impressive, yet low budget project on ' Consultation Circle for Energy Effectiveness and Climate Protection'

Friday morning program was dedicated to 'the Stockholm Appeal':

The mayors of the largest cities in Europe and the United States have co-authored a mutual appeal, "The Stockholm Appeal on Climate Change". The appeal manifests the signatories’ desire for the COP15 meeting in Copenhagen to result in an international climate change agreement.

The US chairman for the US Mayors Goncress, Mrs. Elisabeth Krautz already the day before stressed the dedication from the US cities to back the Stockholm initiative.

The Stockholm Appeal was signed earlier this year by U.S. Conference of Mayors President Seattle (WA) Mayor Greg Nickels, U.S. Conference of Mayors CEO and Executive Director Tom Cochran, Stockholm Mayor Steennnn Nordin, and Mayor of The Hague EUROCITIES President Jozias von Aartsen.

The Appeal was presented to the representatives of the Swedish Presidency of the European Union, as well as the Obama Administration by Mayor Kautz and Mayor Nordin. From this ceremony we have the following citation from the Canadian mayor:

"U.S. mayors proudly stand with our European counterparts in asking international recognition of the role of local leaders in climate protection. At the forefront of creative strategies, U.S. mayors have forced our national government to act to combat climate change. To date, over 1,000 mayors have signed the USCM climate protection agreement pledging to meet or beat Kyoto goals. Mayoral leadership is a major impetus in climate protection," said Mayor Nickels.

The Swedish Deputy Prime Minister, Maud Olofsson and the US Chargé D'Affair in Stockholm, Robert Silverman, underlined the strong intention behind the Stockholm Appeal, and Robert Silvermann declared that his president and the congress this time would do it's utmost to reach a politically binding treaty in Copenhagen on climate warming.

And finally, before the forum reports, Senator John Kerry appeared on video conference to persuade the European audience about the good will of the Congress in Washington, where he was at least partly successful. We are all now very much focused on what will happen in Copenhagen but take it as a good sign that President Obama has declared that he will participate.

Stockholm's Mayor Steen Nordin will hand over the Stockholm Appeal to the UN Conference COP15 in December in Copenhagen.

For the full Wording of the Stockholm Appeal, see this link: http://www.eurocities2009.eu/pages.aspx?page=42