Does Not Compute

The New York Times
January 22, 2005

Does Not Compute
By NICHOLAS G. CARR

Carlisle, Mass. — THE Federal Bureau of Investigation has officially entered what computer professionals call "software hell." After spending $170 million to create a program that would give agents ready access to information on suspected terrorists, the bureau admitted last week that it's not even close to having a working system. In fact, it may have to start from scratch.

Shocking? Not at all. A look at the private sector reveals that software debacles are routine. And the more ambitious the project, the higher the odds of disappointment. It may not be much consolation to taxpayers, but the F.B.I. has a lot of company. Software hell is a very crowded place.

Consider Ford Motor Company's ambitious effort to write new software for buying supplies. Begun in 2000, the goal of the project, code-named Everest, was to replace Ford's patchwork of internal purchasing systems with a uniform system that would run over the Internet. The new software was supposed to reduce paperwork, speed orders and slash costs. But the effort sank under its own complexity. When it was rolled out for testing in North America, suppliers rebelled; according to Automotive News, many found the new software to be slower and more cumbersome than the programs it was intended to replace. Last August, Ford abandoned Everest amid reports that the project was as much as $200 million over budget.

A McDonald's program called Innovate was even more ambitious - and expensive. Started in 1999 with a budget of $1 billion, the network sought to automate pretty much the entire fast-food empire. Software systems would collect information from every restaurant - the number of burgers sold, the speed of customer service, even the temperature of the oil in the French fry vats - and deliver it in a neat bundle to the company's executives, who would be able to adjust operations moment by moment.

Or so it was promised. Despite the grand goals, the project went nowhere. In late 2002, McDonald's killed it, writing off the $170 million that had already been spent.

Research by the Standish Group, a software research and consulting firm, illustrates the troubled fates of most big software initiatives. In 1994, researchers found, only 16 percent were completed on time, on budget and fulfilling the original specifications. Nearly a third were canceled outright, and the remainder fell short of their objectives. More than half of the cost overruns amounted to at least 50 percent of the original budget. Of the projects that went off schedule, almost half took more than twice as long as originally planned. A follow-up survey in 2003, however, showed that corporate software projects were doing better; researchers found that the percentage of successful projects had risen to 34 percent.

What happened between 1994 and 2003? The Internet boom went bust. Stung by wasted investments in complicated software systems, business executives began taking a more skeptical view of such projects. They scaled back their expectations, pursuing more modest software enhancements with narrower goals - and far higher chances of success.

Equally important, they stopped trying to be creative. Rather than try to customize their software, they began looking for cheaper, off-the-shelf programs that would get the job done with a minimum of fuss. When necessary, they changed their own procedures to fit the available software. Old, generic technology may not be glamorous, but it has an important advantage: it works.

It may well turn out that the F.B.I.'s biggest problem was its desire to be innovative - to build a new wheel rather than use an old one within easy reach. When it comes to developing software today, innovation should be a last resort, not a first instinct.

Nicholas G. Carr is the author of "Does IT Matter? Information Technology and the Corrosion of Competitive Advantage."