In a Globe and Mail story, Kirk Makin reports that the Ontario government settled a lawsuit for $63 million over a software project gone horribly wrong. The lawsuit was brought by EDS Canada Ltd and a number of other companies after the government decided to cancel the Integrated Justice Project (IJP), a project meant to move the province’s entire judicial system onto computers, because it had run over budget:
The death knell came in late 2002, when then-provincial-auditor Erik Peters said the original cost estimate of the project had ballooned to more than $350-million from $180-million. He said that even if the IJP were completed, the prospective savings would be no higher than $250-million.
When the project was cancelled it had burned through $200 million. So why didn’t the government continue the project in the hope of recouping the $250 million it expected to save for the project? Derek Freeman, a Toronto lawyer with “inside knowledge of the IJP” provides a clue:
Mr. Freeman recalled that when the project began, the original private-sector partners got carried away and failed to convey how difficult it would be to translate their plans into a system-wide network.
It sounds to me like the private-sector partners failed to convey the difficulty because they were unaware of it themselves.
This is a classic problem in software. Estimates are often off by a factor of two or more because developers, when they first encounter a problem, haven’t acquainted themselves with its many intricacies.
The $350 million estimate to which the project ballooned was probably optimistic.