Five Lessons The HealthCare.gov IT Debacle

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Some of the first news of the New Year in the U.S. has been that over 2 million people have now registered for insurance under the Affordable Care Act...finally...once the web site started working.  

I didn't want to let the entire HealthCare.gov story vanish without revisiting it one last time to see what it can teach the business world in 2014. So here are the top 5 lessons that CEO's, Boards and businesses can learn from the very public implementation failure of the HealthCare.gov site.

#5 - Given Enough Time, Money and Resources; Almost Any IT Problem Can Be Fixed

Unfortunately, for-profit businesses don't have the seemingly bottomless pit of resources that governments can deploy. Getting IT projects right the first time, on budget and on schedule matters in business. For those of us in the IT business, this implementation failure wasn't all that surprising. Research shows that 1 out of 6 IT projects is deemed a "black swan" that exceeds budgeted cost by 200% and schedule by 70% — IT projects regularly fail...and fail big.  

But this abysmal performance history is becoming much less acceptable or tolerable for businesses — to understand why, see lesson #4.

#4 - There Are Some Really Big Business Consequences To Getting IT Wrong 

While HealthCare.gov eventually came on line and is now supporting enrollment for millions, the changing business consequences of IT failure are much more dire. Sure costs and schedule overruns are bad, but the really BIG consequences are the business continuity and strategic consequences that IT now has for every company. If a similar project literally shut down a business for 3 months, like enrollment was shut down, a company may never recover. Moreover, the strategic impact of a misaligned or mismanaged IT project can cripple companies like never before, making them or their business model irrelevant in a rapidly evolving IT driven world.   

Your company's future is dependent upon what you do with some significant technology developments taking place all around us today. Make the wrong calls or screw up a critical implementation to this degree and your future will be at stake.  

#3 - In Business, Screwed Up IT Projects Will Get C-Level People Fired

Despite the fact that heads did not roll for the failed HealthCare.gov implementation, the for-profit world won't be as forgiving. Boards, CEO's and CIO's will be held accountable as the "black swan" business implications of IT continue to grow into mutant proportions.  

HealthCare.gov publicly demonstrated what can go horribly wrong with today's IT—businesses, their leaders and their shareholders are now on notice.     

#2 - IT Projects Are Not Getting Any Easier

These projects are getting bigger and more complex and the risk profile of IT in business is changing dramatically. Information technology is rapidly evolving, complexity abounds with integrations everywhere,  third party dependency creates many new risks, security is an animal all to itself,  user requirements are rapidly evolving and fickle, dependency and pressure on the underlying infrastructure adds uncertainty and risk, etc. etc.  

The most public IT implementation failure of all time just illustrated how difficult IT has become, for all to see.     

#1 - IT Governance Matters

In early December ABC News reported:

A report released by the Department of Health and Human Services fingered “inadequate management oversight and coordination among technical teams” as primary factors in the roll-out mess.

That's IT governance 101.  

I've been writing and speaking about the value protection and creation opportunities that IT governance can bring to business for several years now. It seems like Boards and CEO's might be starting to wake up to the fact that they need IT executives in the corporate boardroom—although my honest assessment is that this is still not moving fast enough to keep pace with the rapidly changing IT landscape.   

An IT disaster of the magnitude of HealthCare.gov is out there in business, the project is probably already underway. The best CEO's and Boards will act now from an IT governance perspective, not when this lurking mutant black-swan finally forces them to.       

Here's to better corporate IT governance in 2014.  

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