Queensland Health Payroll Project: A Case Study of Project Failure

This case study analyzes the catastrophic failure of the Queensland Health Payroll (QHP) project, a large-scale IT project undertaken by Queensland Health and IBM. The report delves into the key issues that led to the project's demise, including incorrect scope identification, stakeholder management problems, communication breakdowns, and underestimation of project complexities. It examines the failures in the early implementation phase, such as issues with cost and schedule estimations, poorly defined business requirements, and questionable procurement processes. The study further explores the reasons behind the significant cost overruns and schedule delays, highlighting inappropriate business requirement identification and the impact of change requests. It also discusses the early project delivery methods, which lacked proper planning, documentation, and communication. The case study concludes by offering recommendations for project managers, emphasizing the need for effective governance, proper scope identification, robust system testing, and active identification of critical business processes to ensure successful project implementation and avoid similar failures in the future.

Running head: QHP
Project Program Delivery System: Queensland Health Payroll Project
Name of Student
Name of University
Author Note

1
QHP
Table of Contents
Introduction..........................................................................................................................2
1. Main Issues with QHP Project.........................................................................................2
2. Failures with Early Implementation of QHP...................................................................3
3. Reasons of Cost Overrun and Schedule Delays..............................................................4
4. Early Delivery Method for QHP Project.........................................................................4
5. Changes in Recent Project Delivery................................................................................5
6. Recommendations as a Project Manager.........................................................................6
Conclusion...........................................................................................................................7
References............................................................................................................................8

2
QHP
Introduction
Queensland Health had decided to upgrade its obsolete payroll system and provided the
contract of the same to IBM. The project was complex and IBM had previously not handled any
project of such a large size. Several issues crept into the project right from the start leading to the
project experiencing scope creep, cost overrun and incontrollable delays (Thite and Sandhu
2014). This is the main reason why this project is considered to be a typical case of failure. The
report categorizes the key issues and the causes of catastrophe of the Queensland Health Payroll
(QHP) project. The early implementation of this project failed due to several reasons, which are
highlighted in the study. The report provides recommendations which could have eliminated the
chances of project failure.
1. Main Issues with QHP Project
The catastrophe of the QHP project is mainly because of presence of several management
issues within the team and with the process of project execution. The main issues with this
project are indicated as follows-
Rush to Scope: The QHP project undertaken by IBM was quite complex. Yet IBM spent
only two months on identification of the scope of the project (Eden and Sedera 2014.). This rush
to scope resulted in incorrect scope identification leading to project failure. The incorrect scope
identification resulted in occurrence of scope creep.
Stakeholders’ Issues: Right from the start of the project, stakeholders’ issues were
observed in the project. There were too many stakeholders involved with the project and all the
stakeholders had different expectations and therefore, management of the stakeholders’
expectations became a significant issue.

3
QHP
Communication Issue: Another significant issue that added to the catastrophe of the
project is the communication issue (Paterno and Zhao 2018). The project team lacked proper
communication with the project manager or the stakeholder that further contributed to the key
causes of project failure.
Underestimation of Project Complexities: IBM was unsuccessful to understand the key
neds of the payroll project leading to a number of change requests during the execution of the
project. The underestimation of the project complexities resulted in cost overrun and delays in
the set schedule of the project.
2. Failures with Early Implementation of QHP
The early implementation of the QHP project was not effectively planned that contributes
to the key reasons of project failure (Herniter and Maasberg 2018). Apart from that, there are
certain other factors that contributed to project failure.
There were issues with estimation of the cost and schedule requirement of the QHP
project. Queensland Health had agreed on a seven month time frame chosen for execution of the
project by CorpTech and IBM. The payroll system was supposed to process a pay for 80,000
employees with 24,000 different combination of pay (Gaikema et al. 2019). Implementation of
this system in a time of seven months was next to impossible and this was one of key failures
with early execution of QHP.
The early implementation of the QHP project was further based on poorly defined
business requirements and therefore, a need of several change requests were observed during the
employment phase of the project.

4
QHP
The procurement process followed during the early execution of the QHP project was
questionable as well (Paver and Duffield 2019.). The decision of appointing IBM as a prime
contractor added to the major problems that are faced in execution of the project.
The system thus prepared failed the critical user acceptance testing (Hmelak 2014).
However, the project team did not address the issue, which further contributed to the system
creating huge issue in processing the payments of thousands of workers.
3. Reasons of Cost Overrun and Schedule Delays
The QHP project faced certain serious issues of cost issues and delays in schedule. There
are several motives of cost-overrun and schedule delays that affected the normal implementation
of the project. The key reason of cost overrun was inappropriate identification of the business
requirement of the project (Asgarkhani et al. 2017). Ineffective identification of the business
requirement gave rise to the need of several change requests in the project which contributed to
both schedule delays and increase in the cost. The key cause of increase in the project cost was
abrupt changes that the project faced during its time of implementation.
Requesting a change and approval of the change is a time consuming process and hence
the QHP project suffered uncontrollable project delay due to the presence of a number of change
requests in the project. Furthermore, the state government did not take appropriate measures in
controlling or eliminating the issues persisting in the project, leading to project failure. There
were issues with the procurement process and there were confusion regarding the roles and
responsibilities of the team members (Glass 2013). The project would not have faced these
significant schedule and cost issues if the project was managed in an effective manner.
4. Early Delivery Method for QHP Project

5
QHP
The previous delivery technique of the project was unplanned and lacked any structural
project implementation, which added to the catastrophe in the project. The implementation
process lacked proper documentation which was another significant issue linked with
development of the system. The project was tried to be implemented in a significantly
constricted time of seven months which further contributed to the failure (Grosser 2013.). The
project was deficient in proper business plan. The system was tried to be implemented without
proper understanding of the scope leading to incorrect requirement specification and delivery of
a faulty project plan.
The early project delivery method lacked proper communication and training. Along with
that, a poorly designed team structure added to the project failure. The project lacked proper
configuration and awareness from the team that further contributed to project failure. A waterfall
approach was followed in project execution leading to an adequate system testing. Testing is an
important need for software development process. In QHP project, testing was not effectively
performed which further contributed to project failure.
The early project implementation lacked effective process of project execution and
control. The project lacked presence of proper project management processes and rules of system
implementation that contributed to project failure.
5. Changes in Recent Project Delivery
The failure of the early delivery process of the QHP project showed the way of
improving the project delivery methods (Duffield and Whitty 2015). Certain changes were
brought about in the recent project delivery method to ensure successful project implementation.

6
QHP
The project could be completed only after correct requirements identification. Testing is
an effective process of software development and implementation. In the recent delivery method
a step by step project implementation method was followed, which further helped in elimination
of majority of the errors and issues from the project. ‘
The project was in need of proper governance. The lack of governace in the initial
implementation phase was a significant contributor to the reasons of project failure (Silva and
Rosemann 2012). In the recent project delivery method, along with a step wise project
implementation, effective project governance were enforced to ensure completion of the project.
6. Recommendations as a Project Manager
It is the accountability of the project manager to ensure effective project implementation.
If I were appointed as a project manager in execution of the project, I would have ensured the
use of an effective project management process in initiating and executing the project. The
recommendations for improving this project in its early stage of delivery is indicated as follows-
1. The project lacked effective governace, which is an important criteria of successful
project execution. Project governance is linked with management of the relationship with key
project stakeholders. Therefore, proper project governance is recommended for the execution of
this particular project.
2. A proper time was to be apportioned for understanding the scope of the project. Proper
identification of the project complexities would have contributed to effective management of the
same. Scope identification is an important consideration of project and therefore, proper scope
identification for complex projects like QHP is a necessity.

7
QHP
3. Implementation of any software project needs proper testing and therefore effective
system testing is a necessary consideration for QHP project. It is the accountability of a manager
to focus on testing the software developed prior to its release.
4. Activeness in identification of the critical business processes associated with the
system to be developed is essential to ensure successful project implementation. The QHP
project failed as the team was unable to identify the critical business needs.
Conclusion
The report gives an overview of the key concerns that resulted in the failure of QHP
project. The project which was supposed to be completed in 7 months took 5 years to complete.
The key problems that were identified in the project include the leadership issues, lack of proper
communication, improper scope identification and estimation and lack of experience. Certain
recommendations are provided in the report by analyzing the key causes of project failure. It is
the accountability of a manager to ensure effective communication flow among the project team
that further contributes to successful project execution. The report recognizes the issues linked
with the early delivery of the QHP project. The recommendations are based on the issues that are
faced in the project.

8
QHP
References
Asgarkhani, M., Cater-Steel, A., Toleman, M. and Ally, M., 2017, December. Failed IT projects:
Is poor IT governance to blame?. In Proceedings of the 28th Australasian Conference on
Information Systems (ACIS 2017). Australian Association for Information Systems.
Duffield, S. and Whitty, S.J., 2015. Developing a systemic lessons learned knowledge model for
organisational learning through projects. International journal of project management, 33(2),
pp.311-324.
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.
Gaikema, M., Donkersloot, M., Johnson, J. and Mulder, H., 2019. Increase the success of
Governmental IT-projects. Systemics, Cybernetics And Informatics, 17(1), pp.97-105.
Glass, R.L., 2013. The Queensland Health Payroll Debacle. Information Systems
Management, 30(1), pp.89-90.
Grosser, M., 2013. Legal lessons from the Queensland health payroll report. Government
News, 33(5), p.20.
Herniter, B. and Maasberg, M., 2018. IT Project Crisis and Escalation.
Hmelak, M., 2014. The IT Audit of the Republic of Slovenia's eHealth Project. International
Journal of Government Auditing, 41(3), p.12.

9
QHP
Paterno, P. and Zhao, S., 2018. Queensland Health: Australia's Healthcare IT
Catastrophe. Proceedings of the Northeast Business & Economics Association.
Paver, M. and Duffield, S., 2019. Project Management Lessons Learned “The Elephant in the
Room”. The Journal of Modern Project Management, 6(3).
Silva, A.R. and Rosemann, M., 2012, May. Integrating organisational design with IT design.
In International Conference on Design Science Research in Information Systems (pp. 271-286).
Springer, Berlin, Heidelberg.
Thite, M. and Sandhu, K., 2014. Where is my pay? Critical success factors of a payroll system–A
system life cycle approach. Australasian Journal of Information Systems, 18(2).