Abstract

The Queensland Health implementation project and the Victoria's HealthSMART Electronic Health Record System are
the two most famous failed IT projects in the Southern Hemisphere, each consuming $ 1.25 billion AUD and $ 566
million AUD. Both projects are huge information system projects led by the government, with huge budgets, and both
ended disastrously after the time exceeded severe expectations, achieving unsatisfactory results. This article attempts to
find the common causes of their failures by analyzing these two cases, and summarizes how to avoid causing the same
failure results again.

Introduction
In 2003, in order to create a comprehensive Victoria-wide electronic health record system (EHR) which could combine
financial systems with a patient record management system, the Victorian Government launched a program to provide
the state's medical IT infrastructure Facilities are modernized. Initially, the HealthSMART project has a budget of $ 323
million AUD and a completion date is expected to be June 2007. However, by the end of 2007, costs are expected to
have risen to $ 427 million. 57% of the funds have been invested, but only 24% of the projects have been completed,
meanwhile, the completion date has been postponed to 2009. By the end of 2010, the completion date had been
postponed to 2012, and the project costs continued to increase. At least an additional $ 100 million was needed to
complete the project. after persuaded by the Australian Medical Association Victoria and others, the government
decided to stick with it. Until the beginning of 2012, a total of $ 566 million AUD has been invested, but the work of
EHR is still far away. So on May 18, 2012, the Victorian government abandoned the HealthSMART system (Carlyon,
2012). Subsequently, the Minister of Health announced the allocation of $ 100 million to set up an expert group to
advise on the best way to upgrade hospital's ICT system in Victoria (The age, 2012).
Almost at the same time, still in Australia, another big IS project, led by the Queensland Health, failed spectacularly.
The failure of the Queensland Health implementation project in Australia is one of the most famous IS failure cases in
the southern hemisphere. Its implementation was delayed by 18 months from the original plan, and the expenditure
exceeded the budget by 300%. In addition, the salary calculation of doctors and nurses and several stuffs is wrong.
According to KPMG estimates in 2012, the total cost of the project including implementation, stabilization and
maintenance is approximately $ 1.25 billion AUD (AAP, 2012). The failure of the project has led to a series of serious
stuff turnover including the resignation of the Minister of Health, and industrial strikes( Ludlow, 2012). The Queensland
Government has launched the highest judicial form of investigation in Australia (Royal Commission) to investigate the
reasons for the failure. According to the report of the Auditor General and Royal Commission reports, the project has
the following problems:
Under-estimation of Project Scope & Complexity: Due to the QLD health payroll system contains a large workforce
and multiple employment agreements and awards, which makes it very complicated, it is necessary to carefully consider
the customization of the human resources system. However, the main contractor IBM used the same SAP HR system as
the Queensland Housing with almost no replacement, and made a simple replacement for the previous LATTICE
system. In fact, QLD Health ’s requirements are much more complex than Queensland Housing, which has only 1,300
employees and an employment award, while QLD Health has 78,000 employees and more complex rewards.
Additionally, the business rules of LATTICE and SAP HR are very different.
Poor Governance: Corp Tech, IBM and QLD Health, those key agencies didn’t have clear governance structure of the
system implementation, which lead to confusion over authority and responsibilities of each party. The owner of the
system, Corp Tech, had some tension with QLD Health, whose the owner of data.
Poor User Involvement & Buy-in: In this project, the identity of the client is confusing. The system user, QLD Health
didn’t give explicit authorization to the key project deliverables which are signed between Corp Tech and IBM.
Ill-defined Project Scope: The ‘project scope was not formally agreed to by QLD Health, and negotiations over the
scope occurred throughout the project, resulting in over 47 change requests’ (page 21). The lack of regular review of the
business lead to subsequent difficulties with implementation and system testing. From the beginning of the project, the
lack of consensus among all key stakeholders finally lead to a surge in costs and delays in implementation.
Poor Project Management: ‘No specific project management methodology was applied throughout the life of the
project’ (page 3). The pre-implementation system and process testing failed to detect significant implementation risks.
In addition, before implementation, some key business readiness activities and practices have not been fully developed.
Mad Rush to Go Live: ‘SAP recommended a full parallel pay run comparison’ between the old and the new system
prior to Go-Live’ (page 29), while the Project Board didn’t accept this recommendation because of the huge size and
complexity of this task. Instead, user acceptance testing for a sample of 10% of employees and 60% of functionality of
the new system was done as parallel payroll testing.
Poor Risk Management: There was lack of contingency planning for business cut-over. The code fixes were migrated to
the production environment before the business cut-over which is considered not good practice owing to the increasing
risk of unstable live system.

Discussion
The failure of these two cases clearly shows that failure to start a large-scale information system project
indiscriminately can have disastrous consequences for the organization adopting the project. We can deeply understand
the complexity of industry management, systems and relationships.
There are many reasons for the failure of these two projects, most can be attributed to poor project management. The
contractor despised the complexity of information system projects and handled the relationship between stakeholders
poorly. The complexity of large-scale IS implementation projects can be summarized as the following:
(1) The complexity of government projects .
(2) The complexity of the system itself.
(3) The complexity of the client-consultant relationship.
The IS implementation projects are both organizational projects and technical projects. It is usually associated with a
large amount of business process reengineering and is full of complexity (Eden & Sedera, 2014). The complexity of the
client-consultant relationship includes the interactions between customers, consultants, and suppliers, as well as the
need for project governance and effective communication.
Therefore, adopting organizations must：
(1) Clearly define the roles, responsibilities and contracts of stakeholders in order to avoiding insufficient
communication and misunderstandings.
(2) When facing complex relationships with multiple clients, before communicating with the main contractor, clients
need to clarify their requirements and ensure that each stakeholder has the same understanding of the goal. Serious and
active communication is the prerequisite for the success of a project.
(3) Before implementing the project, completing Parallel system testing to evaluate the condition of the system.
(4) Adopting appropriate project management methods. In the project of QLD health, IBM recklessly adopted the same
method as Queensland Housing, while the reality of complex workforce relationships exceeded the capability of the
method, leading to disastrous results
(5) Before the new system is not completed, the legacy system should be maintained and planned as necessary. to
prevent the lack of support by the legacy system vendor before the new system is put into use.

Conclusion
The two IT projects discussed in this article caused huge economic losses to the country due to various mistakes and
errors in the implementation process. As a result, our society is increasingly dependent and looking forward to the
possibility of integrating more huge, more expensive and more integrated IT projects. Like electricity, water,
transportation, and other critical parts of our infrastructure, IT is fast becoming intrinsic to our daily existence.
(Charette, 2005). Taxpayers will eventually pay for these failures, perhaps leading to unprecedented losses. Through the
analysis of failure cases, we can not only save high expenditures and waste, but also avoid dangerous lifestyles,
especially when implementing public health projects which are intervened by government.
Carlyon, P 2012, ‘Government dumps hospital IT system; The State Government has dumped the
hospital IT system HealthSMART after a $500 million cost blowout’, ABC Premium News, .

AAP Bulletin Wire 2012, ‘Vic govt scraps $500m e-health project’,
The Age 2012, ‘Davis kills IT system’, .
Charette, Robert N. 2005, ‘Why software fails.’, IEEE Spectrum, vol. 42, no. 9.
Charette RN. Troubled HealthSMART System Finally Cancelled in Victoria Australia. IEEE
Spectrum Inside Technology, 2012.
Ludlow, M 2012, ‘THE cost of Queensland Health's’, North Queensland Register (Townsville,
Australia), p. 5, .
Queensland. Department of Justice and Attorney-General, & Chesterman, R. (2013). Queensland
Health Payroll System Commission of Inquiry: Report.
Eden, R. and Sedera, D., 2014. The largest admitted IT project failure in the Southern
Hemisphere: a teaching case. In Proceedings of the 35th International Conference on Information
Systems: Building a Better World Through Information Systems. AISeL.