Marin County v. Deloitte

There is a lawsuit that is attracting a lot of attention among the tech systems integrators and their customers. In County of Marin v. Deloitte Consulting LLP, the County alleges fraud on part of Deloitte for misrepresenting their team resources as experienced professionals and/or experts in the SAP Public Sector implementation. The County even goes as far to say that Deloitte used this contract to provide on-the-job training for some team members. Deloitte was hired in 2005 and after all these years the ERP system is still a mess, according to the lawsuit.

Deloitte fired back with a claim alleging “breach of agreement and unpaid invoices.”

Michael Krigsman has a good writeup on ZDnet. Here’s my take stemming from my own CTI project experiences…

Integrators LOVE public sector projects

Government and municipal customers are often considered the cash cows for systems integrators and vendors. Lots of milking and lots of expensive CYA. The truth is, a public sector customer is often overstaffed, bureaucratic, and loaded with taxpayer money (okay, maybe not with the recent economic turmoil). It gets even worse if there are union workers involved. Sadly that is just the nature of government. Vendors realize this and will certainly exploit it to maximize profit and margins.

Because of the inefficient nature of government, it will take more dollars to get things done. That’s just the way it is. For each layer of management approval required for project changes, dollars are going down the drain. For each hour that’s required for reviews by everyone and their bosses, and as hours turn into days with no decision in sight, money is being thrown out the window. Public sector employees are also very risk-averse and resistant to change. They prefer to avoid accountability for fear of embarrassment, but usually when something bad happens they will just pour more money into the problem rather than admit fault.

That’s perfectly fine with SIs. In fact, SIs count on it.

I’m willing to bet that Marin County never really took control of the project. I bet the County just wanted to hire somebody to take care of everything, i.e. pay somebody (Deloitte) to make the problem (the SAP project) go away.

It cannot work that way. The customer has a duty to keep SIs on their toes. I’m not saying to constantly ask for status meetings or watch over their shoulders, but to convey the expectation that all parties will be accountable for their end of the deal.

Even better, the public sector customer can disrupt the stereotype by being flexible and open to accept better processes, new organizational changes, and being a good steward of taxpayer money. That ought to shock the integrator.

Technical complexity requires simplifying everything else

The more complex the system, the better it is to streamline and simplify everything around it. That means cut down on paperwork, flatten the team organization, and streamline the processes.

Who wants to deal with a five-day waiting period before a firewall port can be opened? Who wants to get that phone call from AP about a missing $1 receipt for that Coke you got at the vending machine? Is it really necessary to ask for VP-level approval for taking just a few days off?

Having to deal with crap (yes, that’s a technical term) like that only puts additional burden onto the team which I’m sure is already inundated with technical challenges and deadlines.

Technical ability doesn’t guarantee success, integrity does

Yeah, yeah, yeah. I know what you’re thinking: Eugene is high on crack. But I firmly believe that many issues and problems facing troubled IT projects are results of dishonesty and unethical behavior, applicable to both the SI and the customer.

Technical problems are almost always solvable in today’s environment. Perhaps it’ll take some more time and money and manpower, but it shall not hinder the ultimate success of the project.

Big SIs will lie to make more money; small SIs will lie to survive. It’s that simple. If you work for an SI then you should do everything in your power to maintain your professionalism and integrity. It will pay off in your long term career.

What gets the project in trouble and pushes it to the edge of failure? Dishonesty about team resources, dishonesty about expenses, dishonesty about existing IT systems, dishonesty about payments, etc.

Closely watched lawsuit

The outcome of this lawsuit could have far reaching effects. Just think of the number of IT projects that aren’t deemed a success. Add on to the fact that many SIs today rely on outsourced resources (some even offshore) which definitely complicates matters.

What’s your take on this litigation?


One thought on “Marin County v. Deloitte

  1. I’m a Marin resident and an expert on this type of litigation, having done it for over 25 years.  The problem is that the County is making very extreme pseudo-criminal claims instead of straight-ahed “we paid a lot of money for something that does not work at all as promiised.”

    Your comments in the column are well taken.


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