Analysis of Queensland Health Payroll Project Failure: A Case Study

This report provides a comprehensive analysis of the Queensland Health Payroll (QHP) project failure, a case study highlighting critical issues in project management. The QHP project, contracted to IBM, aimed to replace an outdated payroll system but suffered significant setbacks, including an 18-month delay and a 300% budget overrun. The report delves into three primary areas of failure: time management, scope management, and cost management. Time management issues stemmed from underestimation of project duration, leading to missed deadlines. Scope management problems arose from unclear project objectives and inadequate scope definition, contributing to delays and cost increases. Cost management issues included significant budget revisions and overspending, compounded by changes in business requirements. The analysis includes detailed discussions of each issue, exploring their impact on the project's overall outcome, and concludes with recommendations for improving project management practices, emphasizing the importance of accurate time estimation, clear scope definition, and effective cost control to prevent similar failures in future projects.

Running head: QHP
The Queensland Health Payroll Project
Name of Student
Name of University
Author Note

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Abstract
The failure and success of any undertaken project depend on the process in which a project is
being executed. In the following report, analysis of failure of Queensland Health Payroll project
is done. Several rationale for project failure could be identified, out of which the most significant
ones being the time management, scope management and cost management. The main issues of
project failure and the critical problems that were faced in the project are discussed in the report.
The report concludes with recommendations for effective project management. QHP project was
delivered 18 months behind schedule and went almost 300% over budget. It is a classic example
of project failure and therefore, this particular case is considered for analysis in this report.
Keywords: Scope, Time, Cost, Project Plan

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Table of Contents
1. Introduction......................................................................................................................4
2. Project Failure..................................................................................................................5
3. Project Issues...................................................................................................................6
4. Time management Issue..................................................................................................7
What was the issue?.........................................................................................................7
How was the Issue managed?..........................................................................................7
Success or Failure............................................................................................................8
Lesson Learnt...................................................................................................................8
5. Cost Management Issue...................................................................................................8
What was the issue?.........................................................................................................9
How was the Issue managed?..........................................................................................9
Success or Failure............................................................................................................9
Lesson Learnt...................................................................................................................9
6. Project Scope Management Issue..................................................................................10
What was the issue?.......................................................................................................10
How was the Issue managed?........................................................................................10
Success or Failure..........................................................................................................11
Lesson Learnt.................................................................................................................11

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7. Conclusion and Recommendations................................................................................11
References..........................................................................................................................13

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The Queensland Health Payroll Project
1. Introduction
Queensland health system is known for providing healthcare services (public) to the
Queensland province of Australia. The sector employs 65,000 workers in the health department
(Glass, 2013). With the increase in the size of the organization and increase in the number of
staffs, QHS needed replacement of their soon to be obsolete payroll system. In consideration to
this decision, the agency contracted with IBM for designing and implementing a new payroll
system within a budget of AU $6.9M. The system was set to be delivered by the year 2008.
However, the project could not be completed within the set deadline, and the set budget
and the project was delayed until 2012. From the start of the project, several factors were playing
against the successful finish of the said project. The ineffective calculation of the scope, time and
the budget of the project has contributed to the project failure.
The primary stage of a planned two-stage deployment process of the system for payroll
was released in 2010. The project aimed in replacement of the ageing ESP Kronos system and
the existing LATTICE payroll process (Manongdo, 2019). The outcome of this particular project
is spectacular in several aspects, starting from delayed delivery in the project by two years and
the project going over budget by 300%.
The report aims to discuss three main issues in project management that contributed to
the loss of the project. The report concludes with certain recommendations for improving the
performance of the project. In the following paragraphs, the failure of the project is discussed,
along with the main issues that resulted in project’s failure. The report will be discussing the
time issues, scope issues and the budget issues, in the following paragraphs.

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2. Project Failure
Increase in the complexity of a project adds up to the cause of the huge loss in the
project. The Queensland Health Payroll (QHP), project was of immense complexity as it had to
involve management of more than 24,000 different combinations of payments option and
withholdings of more than 80,000 workers (Eden & Sedera, 2014). Another important reason for
the failure was the improper scope and time estimation. IBM had agreed to deliver the project in
just seven months, yet it could not stick to the set deadline, and the project was subsequently
delayed. One of the main reasons behind improper scope identification was that only two months
were set aside in the project’s start to identify the scope, leading to issues in the identification of
the scope of the project. Thus, it can be said that lack of definite objectives added to the project’s
failure.

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Figure 1: The cause of QHP project Failure
(Source: Thite & Sandhu, 2014)
The short delivery time-frame further added to the cause of failure of the project. The
initially estimated duration of this payroll project was only eight months, which was quite less
considering the complexity of the project. The entire implementation strategy of the project was
faulty that led to the project’s failure
3. Project Issues

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The main issues that were identified in the project involve the issues in the management
of the time required to complete the project, issues in management of the scope and issues in
project budgeting (Thite & Sandhu, 2014). These issues are analyzed in the following section to
investigate the main cause of failure of this particular project.
4. Time management Issue
Time management is a crucial aspect of project management as it provides an ability to
organize and planning the time that is spent on different activities (Too & Weaver, 2014). The
benefit of time management involves increase in the effectiveness and productivity of the team
(Duffield & Whitty, 2015). The key aspect of managing a project involves effective planning,
setting up of project goals and prioritizing the project for better performance. Time management
is mostly necessary for planning and exercising effectiveness and productivity within the project
team.
What was the issue?
The main issue linked with the QHP project involves the issue of underestimation of the
time required to complete the project (Asgarkhani et al., 2017). The entire project was estimated
to be completed in 8 months which was not a feasible option. As a result of the improper time
estimation of the QHP project, the project was delivered 18 months behind the original schedule.
How was the Issue managed?
The project was running behind the schedule as the estimated duration for launch of the
live payroll system was only eight months. The first stage of the QHP project was implemented
in March 2010, by the prime contractor IBM. By that time, the project was delayed for over two

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years. The issue could not be managed, as the project was 18 months late and almost 300% over
budget, affecting over 75000 employees (Glass, 2013). There were numerous issues with the
proposed payroll system. Several modifications were brought about in the payroll system later
on.
Success or Failure
The project team of IBM failed to understand the importance of time management while
executing this project resulting in the failure of the QHP project. In the end, the project was 18
months delayed, which was a result of ineffective time management.
Lesson Learnt
Time management provides an ability of organizing and planning of all the project
activities that are needed to be completed. While analyzing the case, it is found out that the risk
of project failure could have been reduced by a considerable amount if the time needed for the
project was not underestimated. Time of eight months was too short for completion of complex
QHP project.
5. Cost Management Issue
Cost management can be explained as a process of estimation of the total expenditure in a
project. The cost management framework in project management helps in calculating the project
plan. The QHP project went almost 300% over budget (Ratsiepe & Yazdanifard, 2011). The
control on the expenditure of the project could have been possible if a feasible cost management
plan was developed at the beginning. The main issues with the cost management plan of the
project are indicated in the following subsections.

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What was the issue?
The cost of the project was revised several times and went four times over budget of the
contract price. The change in the cost of the project was mainly because of the change in the
business requirement (Kogekar, 2013). The project failed as it took three times longer than the
original schedule that was estimated for the project. When the project wen live, it is found that it
was over budget by almost 300%. Furthermore, the system that was deployed was not properly
functional (Schwalbe, 2015). The business process of the system that was delivered was highly
manual that was incapable of performing the normal functionalities of the project.
How was the Issue managed?
The first phase of the project was delivered in the year 2010, and by that time, the project
was 300% over budget. The issue could not be managed as the business process that was
designed to deliver the payroll of all the staffs was manual, and it required to process almost
92,000 forms every fortnight, which was a significant issue. In rectification of the defective
system that was delivered, a total cost of $1.25 billion was required. However, with the
additional expenditure, the problems in the payroll system could be eliminated.
Success or Failure
Considering the fact that the project went over budget, it can be said that the entire
project was a failure. The QHP project neither could be finished within the allocated time and
budget nor could deliver the expected functionalities. Thus, the QHP project was a failure.
Lesson Learnt

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On analysis of the case of the QHP project, it is identified that cost management is an
important part of project management. A feasible cost management plan is needed to be prepared
for the execution of a project towards successful project completion (Heagney, 2016). The issues
in the cost management plan could have been addressed by developing a feasible cost
management plan at the project’s start.
6. Project Scope Management Issue
As indicated earlier, one significant cause of the failure of the QHP project was improper
scope identification. Only two months were allocated for identification of the scope of the
project, which in turn led to an uncontrollable delay in the project and project failure (Mir &
Pinnington, 2014). Management of any project’s scope is important as it enables the project
manager and the supervisors to allocate the right amount of work necessary for completion of a
project.
What was the issue?
From the start of implementing the project, it had an unclear scope that turned out to be
one of the highest contributors to the failure of the project (Marchewka, 2016). For a project
manager, it becomes a necessity to properly identify the project’s scope. Identification of the
scope of the work reflects the business requirements of a project (Harrison & Lock, 2017). Since
IBM was required to replace the existing payroll system, the project team needed to identify the
exact scope of the project. However, in this case, only two months were allocated for
identification of the scope, which was quite less in consideration of the complexity of the project.
How was the Issue managed?

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Poor project management and improper scope definition added to the failure of QHP
project. When the project was delivered, IBM, although defended that they had delivered a
quality work, the staffs identified seventy major faults, which were rectified by additional
expenditure.
Success or Failure
The project was a failure since scope management is considered to be a critical aspect of
managing a project. Since the scope of the QHP project could not be defined correctly, the entire
project failed. The risk of project failure could have been reduced if the scope of the project was
correctly identified.
Lesson Learnt
Project scope is an important tool for the project managers to identify the works to be
completed for execution of the project (Crawford, 2014). Therefore, scope management plan
plays a significant role in project execution and its success.
7. Conclusion and Recommendations
The report discusses the case of the Queensland Health Payroll (QHP) project. The report
analyses the various factors that contributed to failure of the QHP project. In the report, the three
project management issues are identified which were prominent in the chosen case. The report
identifies the main issues in the QHP project and examines the critical reasons for project failure.
Based on the analysis, certain recommendations can be made, which are indicated as follows-
1. It is crucial for the managers to possess the skill of effective time management to
contribute to successful project execution.

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2. Appropriate scope identification is required for better identification and management
of the risks in a project.

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References
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Information Systems: Building a Better World Through Information Systems. AISeL.
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Manongdo, R. (2019). Queensland Health Payroll System - a case study on Business Process
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https://www.academia.edu/8096282/Queensland_Health_Payroll_System

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