Between July 2012 and October 2014, the House of Representatives of the Netherlands conducted an investigation into the failure of a series of central government information and communication technology (ICT) projects. This has led to an unnecessary waste of taxpayers’ money. For the investigation, the House of Representatives appointed a Temporary Committee on Government ICT Projects. This first engaged an external research agency, Policy Research Corporation BV, to carry out two investigations of its own. Then, in the spring of 2014, the Committee held public hearings with 32 witnesses, all with wide experience of government ICT projects from different perspectives. The Committee examined a number of projects, primarily in an attempt to find a common factor or pattern of mistakes from which lessons can be learned to prevent such failures being repeated in the future. The problem as a whole is intractable and will never be brought fully under control. Nevertheless, the committee feels that a few robust organizational measures – provided they are implemented consistently and coherently – will be sufficient to prevent a repeat of a large proportion of the problems identified. The Committee’s recommendations are closely interrelated and should be viewed as a total package of measures for the Cabinet to adopt. Much will be gained simply by involving not only ICT specialists in government projects of this kind, but also users and those responsible for monitoring government spending. On this point the Committee is strongly critical of the House of Representatives itself, as up until now it has not made sufficient efforts to scrutinize public expenditure in this area. If only some of the recommendations in this report are implemented and others ignored, the Committee foresees a repeat of the mistakes of the past. The fundamental problems will still not have been solved. Instead, the government will continue to “muddle along” and yet more taxpayers’ money will be wasted. For the Committee, that would be a real lost opportunity – and not the first of its kind. 15 October 2014 Ton Elias (VVD, chair) Paul Ulenbelt (SP, vice-chair) Manon Fokke (PvdA) Hanke Bruins Slot (CDA) Paul van Meenen (D66) Conclusions and recommendations The Committee draws the following conclusions: 1. The Dutch government does not have its ICT projects under control. 2. Politicians may not realize it, but ICT is everywhere. 3. The government is not achieving its policy ambitions for ICT. 4. The governance structures for ICT projects are very poor. 5. The government is insufficiently aware of the costs and benefits of its ICT projects. 6. The government’s ICT knowledge is inadequate. 7. ICT project management is weak. 8. ICT procurement processes incorporate perverse incentives. 9. The contract management of ICT projects is unprofessional. 10. The government lacks the ability to learn from its mistakes concerning ICT. 1. The Dutch government does not have its ICT projects under control The government has great ambitions in respect of ICT. This makes it all the more disappointing that the governance of projects with an important ICT component are not in order. Taken as a whole, the government’s ICT organization is chaotic and lacks transparency. Tasks and responsibilities are fragmented and unclear. The interests of key players involved in an ICT project are too divergent. In many cases, the government is not in control of the costs, the timing or even the final result of its projects. Moreover, there is no-one who has the final say over ICT-projects. Since no comprehensive report on the national public finances has been drawn up after 1995, nobody knows how much money the Dutch public sector is really spending on ICT. Nor how much is being wasted on failed projects. A conservative estimate based on information from a variety of experts suggests that the figure may be anywhere between €1 billion and €5 billion euros each year. Whatever the true amount, the Committee believes it to be unacceptably high. The Committee has established that much is amiss, especially as regards the culture surrounding government ICT projects. On the one hand there is unbridled enthusiasm for ICT, with proponents viewing it as the solution to every problem. On the other hand the House of Representatives regularly demands policy measures, without realising that ICT is almost always needed in order to implement them. The minister in question promises delivery, without first checking whether the measures required are technically possible in ICT terms. Even when they know that the promises being made to Parliament cannot be fulfilled, officials do not challenge the political leadership enough. When they do voice their concerns, the necessary information does not reach the top political level. This results in ministries issuing tenders for, as they were called during the hearings, “cars without steering wheels”: something, which, by its very nature, cannot work. The government frequently ignores the expertise proffered by ICT suppliers, even though its own knowledge in this domain is often far inferior to theirs. On the rare occasions when a supplier does point out avoidable problems, these warnings are all too often not taken seriously. The House fails to perform its scrutinizing function because of a lack of interest in ICT and a lack of expertise in this area. Moreover – as the Committee itself experienced during the course of its investigations – there are shortcomings in the Cabinet’s provision of information to the House. The government must take firm and decisive action to bring its ICT projects under control. The total package of recommendations by the Committee, as contained in this report, provides a firm basis for such action. Recommendation: a BIT with bite To create order out of chaos, a temporary ICT authority should be established: the BIT (Bureau ICT-toetsing). This must not be yet another bureaucratic body, but a compact, efficient and decisive organization. It should be staffed by independently-minded and autonomous experts – not necessarily all ICT specialists – who can use their knowledge, expertise and experience to judge quickly whether a project has a good chance of success. The BIT should be led by someone with authority, expertise and experience. Before they are put out to tender, the BIT should assess various specific aspects of all government projects worth in excess of €5 million in which ICT plays an important role. In this respect, the Committee interprets the word “project” in very broad terms: it includes trials and pilots, programmes, plans, reorganisations and any other process in which the ICT component plays a major role or is a determining factors as regards cost and duration. Because of this wide scope, it will not be possible to use semantic ruses in order to avoid BIT assessment. The BIT will have a gatekeeper function. In other words, a project cannot proceed until it has received a green light from the bureau. Ministries must submit their projects plans for assessment at an early stage. The BIT will also be authorized to request documents from all relevant various bodies. In assessing plans and documentation, it is guided by a number of common-sense rules (the BIT rules). Only once it has approved a project in line with these terms of reference can the project go ahead. The BIT may also decide to give a project a provisional green light. In this case it is authorized to terminate the project at an early stage if it becomes apparent that the conditions set have not been met. The BIT rules are shown below. They are intended primarily to ensure that the basic principles underlying the project are in order. In other words, that the principal has thought the project through before initiating it. After all, as the saying goes: “A good start is half the battle”. However obvious that may sound, the Committee’s investigations have shown that this is the very point where most projects go wrong. The ten BIT Rules1 1. Draw up a business case for the project which includes all the key elements needed to come to a sound decision. 2. Demonstrate the added value of the project for the end user and for society as a whole. 3. Ensure the project is supported by all relevant parties, including the end users, and assess its organizational, administrative and financial viability. 4. Start by reorganizing and standardizing the ICT-supported work processes, and only then introduce more advanced technological solutions. 5. Make an inventory of the technical, organizational and administrative risks, and of measures to address them, and so eliminate “muddling along” in advance. 6. Ensure that the responsibility for the budget and the contract lies with a single person. 7. Phase project development as efficiently as possible, and ensure that each phase delivers directly useable products. 8. Comply with government standards and demonstrate technical feasibility. 9. Demonstrate what measures have been taken to ensure that criticism and dissent may be given and will be taken seriously, from the beginning to the end of the project. Openness and transparency form the basis for this. 10. Include a clear procurement strategy in the business case. Changes during the course of the project The BIT should continue to monitor the progress of the project in each of its phases. The ICT- related risks, for example, might be assessed in the initiation phase or even as early as the planning phase. Indeed, such an initial assessment could be conducted as soon as the House or the Cabinet formulates particular policy plans in which ICT is to – or might – play an important role. During the later procurement phase, the BIT could carry out a “monitoring consultation” at the request of a relevant body (for example, an assessment of the technical specifications).