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Malcolm Thatcher reveals ‘insider’ perspective about IT failures

Malcolm Thatcher reveals ‘insider’ perspective about IT failures

‘Whether in the private or public sector, we don’t do big IT implementations well.’

Malcolm Thatcher

Malcolm Thatcher

The biggest failing of the IT industry is the fact there’s not enough focus on “people and business change,” according to former interim CIO/CEO of eHealth Queensland, Dr Malcolm Thatcher.

That’s one of the lessons learned by the former Queensland health executive, who’s now on the other side of the fence and able to reveal insights and key learnings about his time in government and industry.

Thatcher has been in IT for 35 years, with a range of roles including chief health information officer for Queensland Health; interim CEO and CIO; as well as executive director, information and infrastructure and CIO for Mater Health Services.

Since leaving Queensland Health in February 2017, Thatcher has focused on completing a book, based on his PHD research and industry knowledge, titled Digital Governance Handbook for CEOs and Governing Boards.”

“It tries to provide competencies to board members, in particular, who often don’t know the questions to ask or are afraid to ask for fear of looking foolish. So it is trying to raise the competencies around digital investment, and what questions they should be asking to make sure their organisations are on track to deliver value on those investments.”

He has a chapter in the book that highlights a case study on a notable IT disaster. “Funnily enough, I chose the Queensland Health payroll system for that case study. I was an expert witness at the commission inquiry so I have quite an in-depth knowledge of the inquiry process and all of the evidence,” he said.

“There is nothing in that case study that is not in the public domain. But I give my own insights into what I feel contributed to the failure and how that failure could have been avoided.”

He told CIO Australia the payroll failings included: “a false sense of urgency; the project was poorly scoped; there was unclear accountability and poor governance which resulted in the warning signs of pending disaster being ignored.” 

No doubt, the Queensland Health Payroll system debacle was widely reported on at the time and will be remembered as one of the most disastrous IT projects in Australian history.

A Royal Commission of Inquiry detailed the disaster that was the Queensland Health payroll upgrade. Essentially, the Queensland government had to pay costs to IBM Australia after failing in a bid to recoup losses from the $1.2 billion health payroll disaster.

Looking back over his time at Queensland Health and highlighting some of the failures in the industry overall, Thatcher said issues arising from a lack of focus on ‘people change management’ is a classic contributing factor.

“I have been in IT now for 35 years and certainly seen a lot of change. I often thought that the challenges in IT were very much around the technology and the incredible pace of technology and issues with new technologies - whether it is equipment or poor integration, poor vendor support or factory changes. But but when I reflect on those challenges, I think they will always exist, and still exist today. Not a lot has changed unfortunately.

“But the bigger challenge is around people and change. As human beings we try to avoid change as much as we can. The biggest issues that we grapple with today are people issues,” he said, indicating organisational and institutional behaviour should be key areas of focus.

“Particularly in acute healthcare, what drives conditions and behaviours around IT adoption? In my experience, whether you're leading eHealth Queensland, with 1,300 staff, you should never underestimate the people issues that you’re going to deal with. And when you’re implementing technology into the business, hopefully to deliver value for business change, the people issues are typically the ones that are not well dealt with.”

In the case of the IT disaster that was the Queensland Payroll health system, he said one of the contributing factors was the fact the customer didn’t properly articulate what they wanted as an outcome from the system.

“It is all very easy in traditional IT procurement to be thinking about the functions and the checklist, and you can tender out. Vendors will spend a lot of money trying to comply with that checklist, but it doesn’t really talk to what outcomes - and inputs and outcomes are often quite different.”

Instead, Thatcher said the industry needs to step up and change the way it thinks about IT and business outcomes - and weave it more into the conversation.

“The things I was trying to drive at Queensland Health was a co-design procurement methodology, whereby we didn’t talk in our tender documents so much about what inputs we wanted or what functions we wanted (or capability), but we talked much more about outcomes. What outcomes did we want? And we invited the industry and the vendor community to partner with us to actually design them to actually get those outcomes.”

On the implementation front, Thatcher said it all boils down to ‘proving and delivering’ outcomes.

“When you’re implementing a new piece of technology, whether it is cloud or SaaS or a new ERP system or HR system, you really need to focus on what the new business processes look like from end-to-end. And you have to fully describe those.

"The software is just the enabler on those, and you want the software to be the enabler, but you really have to design what it’s going to look like. What outcomes do we want for our customers or stakeholders? And I don’t think we do enough of that in the industry.”

Asked what executives should make a priority when considering transformational change, Thatcher said complex organisations, entities like Queensland Health, for example, need to do an IT asset risk assessment from the outset that will reveal and unlock current and future asset value.

“When I think about big enterprise, and the complexity of big enterprise, Queensland Health is a good example. It is all very easy if you have a new CEO or executive or a new board coming in and saying, ‘We want to go cloud everything. We want to throw the baby out with the bathwater and we want to be agile.’

“But the challenge is, ultimately in big enterprise, so much of your ability to deliver processes and services is dependent on infrastructure and capability you already have. And for those organisations contemplating moving to SaaS or PaaS, they really have to think about the integration and the probability issues of what they already have. Because a lot of what they currently have could actually be very valuable to where they want to be.”

In looking to move to contemporary platforms, he said there’s a lot of value that’s already sitting in any given organisation that's on tap.

“My advice is you need to look to the disrupting technologies, like mobile and mobility and look at how you can create new value for your customers and stakeholders, but don’t throw the baby out with the bathwater. Look at what you’ve got and how you can exploit what you’ve got and get better value through your staff, which creates stability within the organisation so they don’t feel like their whole world is about to change.

"Leverage what you’ve got, but still integrate the new platforms, which is the more pragmatic approach and you’ll take the organisation and the staff with you better on that journey.”

Additionally, he said government needs to start listening to consumers and use technology to creatively ramp up customer engagement.

“The big difference that we’ve seen in the last couple of years is the role of the consumer. Social media has shown the consumer is a very powerful voice in the value chain of any industry and in government they need to start listening and engaging consumers,” he said, explaining the way forward is through consumer centred design.

‘I challenge any government around Australia to be able to say, ‘yes we actively engage consumers in the way in which we design solutions for our customers and consumers.’ I don’t think it happens very much in government. That to me is where the next big leap in value will happen - where the consumer gets to the technology in terms of what you’re delivering, whether it be in an agile approach or traditional approach.”

He suggested organisations consider a “digital governance manifest checklist" - a checklist of digital governance artefacts that governing boards need to be able to check off as they progress their digital governance maturity journey.

Things to consider include: digital strategy; digital governance structures; digital investment prioritisation; digital assets risk management; digital investment management; benefits management; policies and procedures; and IT performance.

Mission to educate

Thatcher said he felt compelled to spread the word about the ‘do’s and don’t’s’ of leading transformational change.

“I feel this need to try to make an impact to help stop this incredible waste of money that happens. I’ve seen it far too often, whether in the private or public sector. We don’t do big IT implementations well.”

As such, his upcoming book introduces 23 governance controls for board members to aspire towards for their organisation. “It provides a checklist and the ten questions that you should always ask,” Thatcher said.

“Ideally, I’d like to focus on the book and do some consulting work around educating CEOs, executive teams and boards around making sure that they try to minimise the number of failures. Unfortunately, there are so many failures, and not just in Australia, but globally.

“As someone who is a career technologist and in senior leadership roles, I feel almost compelled to bring that knowledge to bear to try and stop this terrible waste of money, resource and energy. I’m trying to get organisations to think about  the risk that they create when they undertake digital investment, and how to manage that risk well.”

Asked whether he’d consider taking on another CIO role down the track, Thatcher said “never say never.”

“My think my CIO days may be over - maybe, but never say never, of course. Some really interesting opportunity might come up. But I’ve been a CIO for 14 years and I think I’m ready for something a little bit different.”

He said he’s pondering moving into more traditional consulting roles, and even a corporate leadership role. “I think moving into more of corporate services or a CEO type role is probably where I’d prefer to move.”

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