This is a list of notable custom software projects which have significantly failed to achieve some or all of their objectives, either temporarily or permanently, and/or have suffered from significant cost overruns.
Note that failed projects, and projects running over budget, are not necessarily the sole fault of the employees or businesses creating the software. In some cases, problems may be due partly to problems with the purchasing organisation, including poor requirements, over-ambitious requirements, unnecessary requirements, poor contract drafting, poor contract management, poor end-user training, or poor operational management.
Permanent failures Because software, unlike a major civil engineering construction project, is often easy and cheap to change after it has been constructed, a piece of custom software that fails to deliver on its objectives may sometimes be modified over time in such a way that it later succeeds—and/or business processes or end-user mindsets may change to accommodate the software. However, sometimes, for various reasons, neither approach succeeds (or is even tried), and this may be considered as another level of failure—a permanent failure.
Started Terminated System name Type of system Country or region Type of purchaserProblemsCost (expected) Outsourced or in-house?Outcome 1980s 1993 TAURUS Electronic trading platform (London) Stock exchange Scope creep, cost overrun. The project was never completed. £75m ? Cancelled 1982 1994 FAA Advanced Automation System Air Traffic Control Federal Aviation Administration Cost overruns, underestimation of ATC complexity, delays, non-incremental change. existing system. $3–6b ? Scrapped 1984 1990 RISP Integrated computer services (Wessex) Wessex Health Authority Scope creep, cost overrun. The project was never completed. £63m (£29m) ? Cancelled 1994 1999 INCIS Crime information New Zealand Police Frequently changing development staff, hardware, software and scope. approx NZD$110m Outsourced to IBM NZ Cancelled, then hardware partially reused 1997 2000 Bolit Customer service, finance and administration system Patent and Registration Office Too complicated, bad functioning, cost overrun. The project was after completion never used, the agency still today does not have a working IT system. SEK 300m ($35m) Outsourced Scrapped 1999 2006 CSIO Portal Common technological platform for brokers and insurers to improve workflow efficiency Centre for Study of Insurance Operations Low user adoption, conflict between insurers, new technology, lack of funding ~$15 million CAD Outsourced to IBM Abandoned 2000 2009 Customer Account Data Engine System for handling tax records and processing tax returns, replacement for the Individual Master File and others Internal Revenue Service Low user adoption, performance issues, scope creep, never replaced IMF and other mainframe software, some dating back to the Kennedy Administration ~US$500 million Outsourced to IBM, Northrop Grumman and others Abandoned, intended to be replaced by CADE 2 2002 2011 NHS Connecting for Health Electronic care records Central government Beset by delays and ballooning costs, and the software part of it was never finished. The government was also criticised for not demonstrating value for money. Although the contracts were drafted to ensure that the contractors would be forced to bear a significant portion of the cost of the project going wrong if it did go wrong, in reality this did not always happen. The NPfIT was described by Members of Parliament as one of the "worst and most expensive contracting fiascos" ever. £12bn (£2.3bn) Outsourced Discontinued, but some parts continued 2005 2012 Expeditionary Combat Support System Military Enterprise Resource Planning Air force No significant capabilities ready on time; would have cost $1.1bn more just to get to 1/4 of the original scope. $1.1bn Outsourced – including requirements Cancelled 2007 2012 Police case management Police Did not work properly, technical problems with contractor. DKK 500m ($70m) Outsourced Cancelled 2007 2014 e-Borders Advanced passenger information programme UK Border Agency A series of delays. over £412m (£742m) Outsourced Cancelled 2007 2010 Försäkringskassan SAP Dental health service system Social Insurance Agency Not fit for purpose, multiple delays, cost overrun. SEK 10bn ($1.18bn) Outsourced, then insourced Cancelled 2008 2013 Digital Media Initiative Digital production, media asset management Public service broadcaster By 2013, the project was judged to be obsolete (as much cheaper commercial off the shelf alternatives by then existed) and was scrapped by BBC management. The Director-General of the BBC said it had been a huge waste of money. more than £98m (£81.7m) Outsourced, then insourced, then outsourced againCancelled 2009 2013 The Surrey Integrated Reporting Enterprise Network (SIREN) Crime & criminal intelligence logging system (Surrey) Police Force Not fit for purpose £14.8m Outsourced Scrapped 2011 2014 Pust Siebel Police case management Police Poor functioning, inefficient in work environments. SEK 300m ($35m) Outsourced Scrapped 2012 2014 Cover Oregon Healthcare exchange website State government Site was never able to accept online enrollments, so users were instructed to mail in paper enrollments instead. approx $200m Outsourced Cancelled, then client and supplier both sued each other 2017 2023 Distributed Ledger Technology (generic name) Electronic trading platform Australian Stock Exchange System was too complex and only 60% completed $AU 170m expended Outsourced Cancelled
Temporary issues and budget overruns StartedSystem nameType of systemCountry or regionType of purchaserProblemsCost (expected)Outsourced or in-house?1992LASCADComputer-aided dispatch for emergency ambulances (London)Central governmentAmbulance delays and other problems were caused by the introduction of the system. More than 30 people may have died as a result, making it the largest computer-related disaster until the downing of Boeing 737 MAX planes in 2019. The Chief of the London Ambulance Service resigned as a result of the problems and the adverse publicity.£1.5mOutsourced2002Smart Systems for Health / eHealth OntarioElectronic health recordOntario, CanadaProvincial governmenteHealth Ontario is a group of projects that replaced a previous failed project, Smart Systems for Health, which "spent $650 million but failed to produce anything of lasting value." However, in 2009 the CEO of the eHealth Ontario agency resigned, followed by the government minister responsible for overseeing the agency, after a scandal over excessive payments to consultants. In the next audit in 2016, the Auditor General of Ontario noted that 14 years after Smart Systems for Health was started, not all of the eHealth projects were complete, and it was impossible to even determine if they were overbudget because the government had never originally put a budget on them.Can$8bn (unknown)In-house, but with heavy use of consultants2013HealthCare.govHealthcare exchange websiteFederal governmentBy some estimates, only 1% of people managed to successfully enroll with the site in its first week of operation. Alt URL On October 20, 2013, President Barack Obama remarked, "There's no sugar coating: the website has been too slow, people have been getting stuck during the application process and I think it's fair to say that nobody's more frustrated by that than I am."$1.5bn ($93.7m)Outsourced2013Queensland Health Payroll SystemPayroll systemState governmentThe Queensland Health Payroll System was launched in 2010 in what could be considered one of the most spectacularly over budget projects in Australian history, coming in at over 200 times the original budget. In spite of promises that the new system would be fully automated, the new system required a considerable amount of manual operation.$AUD 1.2bn ($6m)Outsourced
Projects with ongoing problems Until the significant problems with these projects are resolved, or the projects cancelled, it is not yet possible to classify them into one of the above categories.
Started System name Type of system Country or region Type of purchaserProblemsCost (expected) Outsourced or in-house? 2013 Canada.ca Government website portal Central government Original plan was to consolidate 1,500 Canadian government websites into a single portal on a single platform. In over three years, only 10,000 webpages of a total 17 million have successfully been migrated. $9.4 million + $28 million (ongoing) Outsourced platform and proprietary software 2007 PRIO Logistic and financial system Armed Forces Parts of the system was put into use in 2009, with reports of big usability issues following. In 2012 troubles with supply of spare parts was reported, causing multiple Gripen fighter jets to be put out of service. The air force was operating at a 70% capacity, another area was reported to operate at a 3% capacity with half of the staff not able to work at all. It would take up to a year to restore capacity. At this point the cost to scrap the project and develop a new one was estimated to be SEK 11bn ($1.3bn). Not seen as an alternative, the development continued and the original budget of SEK 2.4bn was increased to 4bn. In 2015 the project was still on its way to be fully implemented. SEK 4bn ($470m) (ongoing) Technical aspects outsourced 2013 Universal Credit Welfare payments system consolidation Central government The schedule has slipped, with the final delivery date now expected to be 2021, although the system is gradually being introduced. In 2013, only one of four planned pilot sites went live on the originally scheduled date, and the pilot was restricted to extremely simple cases. £12.8bn (estimated) (£2.2bn) Outsourced 2010 Standard Business Reporting (Australian Taxation Office) Electronic Reporting to Government Statutory authority 6 years after program started in 2010, approximately $800m to $1bn has been spent in total. A significant portion of this spend was composed of contracting fees to IBM and Fujitsu. As of early 2016, business take up of electronic reporting was 2-3%. Program has also suffered from significant scope creep and confused objectives. It is likely that choice of XBRL as the reporting format is the main driver behind low take-up (due to its obscurity and high implementation cost relative to other technical standards). ~$1bn to date (ongoing) Technical aspects outsourced
See also Software crisis Vaporware Agile software development Government waste
References
External links The Risks Digest
Best Practices and Measures for Success of your ERP IT Software Projects