[ NNSquad ] Re: Worldwide cost of IT failures: $6.2 Trillion per Year? (yes, with a "T")

[Barry Gold <BarryDGold@ca.rr.com>]

Lauren Weinstein wrote:
> Worldwide cost of IT failures: $6.2 Trillion per Year? (yes, with a "T")
>
> http://bit.ly/8XMH1F  (ZDNet)

There are a couple of problems with that analysis.  The biggest one is 
the assumption that failures in the private sector are like those in the 
government sector.  But there are two major differences:

1. Government projects are more likely to fail.  They are done either by 
the lowest bidder (which often means the one who will cut the most 
corners) or by in-house staff, who usually have civil-service 
protections.  That is, if you fail, you don't lose your job.  At most, 
you may lose the opportunity for promotion to a management position, 
which most IT types don't want anyway.

2. When they fail, gov't projects fail later.  Most private businesses 
monitor their projects (including IT projects) fairly closely.  They are 
likely to be done in small stages of a few months at a time, with 
interaction with the user after each stage to make sure that you aren't 
designing/building a boat anchor.  Government jobs can go on for a year 
or more before any concrete results are expected.

So, the chance of failure is IMO lower in the private sector (including 
at least some NGOs) and the direct cost of failure is also lower.

The second problem is that the list of indirect costs used in the 
summary actually duplicates some costs.

So my guess is that the estimate is high.  But not all _that_ high. 
Probably a factor of 2, overall.  Possibly a factor of 4-5.  So, yes, 
he's probably at the right order of magnitude ($Trillions per year).