On successful completion of this unit, students should be able, at threshold level, to:
1. Process information with an accounting package.
2. Operate internal control in a computerised accounting environment.
3. Explain the activities involved in system implementation & management.
4. Evaluate information systems in a financial & management context.
5. Appreciate security and governance issues as they relate to information systems.
Public sector plays a very important role for the development of the nation. Public sector is the sector in which the general public has the interest in the working of the aforesaid sector. It means the sector in which the public has the substantial interest. Also these sectors are controlled and managed by the government with the separate statutes and laws. This report is being presented to the senior management regarding the effectiveness and the efficiency of the working of the public sector organization. There have been many cases where the projects undertaken by the public sector gets failed and that too with negligence of the public sector and many other reasons that will be discussed and detailed in this report.
The report has been framed with three aims. First aim is to identify the activities that are generally involved in the implementation of system to run the project efficiently and effectively. The second major aim is to evaluate the information system so developed within the organization in respect of the financial and management functions. The last aim is to assess and evaluate as to which methodology shall be implemented so as to ensure that there will be no failure and also there will not be any type of risk associated with the project.
The report will start with the detailed discussion of the National Program of IT and how the same have been different from the other projects which have been failed. National program for IT has included many outsourcing during the whole project and the report has laid down the major benefits that the outsourcing gives to the project and also the risks associated with the project. Thereafter, the reasons have been discussed as to why the public projects are being failed from the beginning of the year. Although there are lots of reasons but the major reasons have been cited and discussed in the heading. After mentioning the reasons and the risks, the steps were detailed as to how the risks that are associated with the project can be mitigated or reduced. In the next heading the framework of COBIT has been discussed and how the same framework can be applied in the given project so as to reduce the chances of the failure of the project and also the identified risks. Apart from the COBIT framework, other methodologies have been discussed as to how the same can also be applied to the given project. The report has then ended with the conclusion of the overall discussion and the recommendation thereon. With these aims and considerations the report has been divided into appropriate headings.
National Programe For It – Different Case
National program for IT has been formed basically for the health system of United Kingdom. Under the National program for IT, it has been decided to have the robust framework for National Health department. The program has been initiated at the central level which means from the political level and the top management of the company. The then health secretary of United Kingdom has taken the step to move forward with this program. Being the public sector project it has also ended up with the failure and has subsequently been stopped (Bajari, 2010 ; Kaplan, 2010).
In the given case study there have been mentioned two major reasons for the failure of the public sector project. One is the act of blaming others if the project does not go with the expected director or else if something goes wrong. And the second reason is the cost negotiation that the public sector undertakings usually do with the suppliers and the relevant contractors (Hagen, 2012). But the given national program for IT has been regarded as the different case because it has the reasons which are totally different from the other public sector projects. Secondly it has been initiated from the end of the politician and not the chairman or the management of the public sector undertakings. There are six major reasons for the failure out of which the outsourcing reason will discussed in the next heading of this report.
- Top down approach – It has been very well mentioned in the studies of the management that the projects which have the top down approach often gets failed. In the top down approach also politicians have their interest and the basic motive of the project could not have been passed on to the executor due to which the project has not been materialized. It has been difficult for the civil servants in this project as they are not clear as to what is required as the aims and the objectives has been with the top management and that too at the level of the cabinet.
- Poor Planning – National Program for IT has been failed badly only because of the fact that the interest of the stakeholders have not been included in the plan of this project. Many stakeholders including the doctors have been raising their interests as to how the project will be executed, what type of benefits will be extended to the doctors and patients, etc. There has been no clear plan even the stakeholders of the project does not have the enough information as to how the same shall be executed. If the same would have been done with proper plan and execution then it would not have been failed (Heeks, 2010).
- Hasty Judgments – The national program for IT as enabled by the politicians and the cabinet members, there has been the hasty decisions without proper planning. Contracts have been provided to the contractors on haste and immediate without defining the scope of the contract of the contractors. They have followed the way to do the paper work with the contractors before defining of the scope of the work of the contractors due to which the objects have been unclear and only the contracts have been awarded but the scope of work has been kept in abeyance.
- Process of Contracting – This is the one of the major reason of the failure. The process that has been adopted by the public sector to award the project is very rigid as it says that no negotiation will be done and the contract will be awarded only on the basis of the take it or leaves it. Along with this basis, the public sector has also mentioned that the contractors to whom the service contract will be awarded will be required to do the work on their own that is the payment will be given only when the final delivery of the service along with the goods will be delivered to the public sector (O'Toole, 2010). They have also included the harsh termination and liability provisions. It exhibits that the risk has been transferred to the service providers on a higher degree.
- Proper Accountability – In this program no responsibility and accountability has been defined and designed for the managers of the public sector. It has been mentioned in different sources that the good managers and other employees associated with the project had been continuously asking from themselves whether the action taken by them is correct or not and whether any adjustments are required in this case or not.
Although the national program for IT has been the public sector project but it has been the different from other projects.
Outsourscing – Benefits And Risks
Outsourcing is a situation and occurs when the company does not have the enough capacity to complete the project on its own or when there is cost saving in adopting this technique. Under outsourcing, the execution of works is transferred to others. In the case of the National Program for IT there has been the multi level outsourcing of contracts and which is considered as one of the major reasons for the failure of the project (Moloney, 2011).
Under the national program for IT, different service providers have been allocated and awarded different work so as to ensure that in case one service provider back out then other service provider can be engaged. It has been the good technique of work because of the following benefits:
- Low Cost – By providing and awarding the different projects to the different service providers, there will always be the cost saving. It will be less because of the increase in the negotiation power of the public sector which otherwise will be low as compared to the individual and single contract.
- Efficiency – There will be the high level of efficiency when there will be different service providers employed at one place. It is because each of them will try to work hard so as to complete the task in an efficient and timely manner. There will be less chances of the default and higher chances of having the work done with good quality. Again it is worth mentioned that there will always be the avoidance of overlapping of work if the clear scope is defined. One will always work better so as to avoid the chances of having the quality issues if any reported by the other service provider.
- Higher accountability – Each service provider will be accountable for each of his work and thus the degree of accountability of the service providers under the outsourcing arrangement will be high (Shareef, 2010).
Apart from the above benefits there has been the major risk associated with the outsourcing model. These are as follows:
- Monitoring risk – As the number of service providers employed in the premises will be high, there will be the chances that the close monitoring of the work of the service providers cannot be done and thus there will always be the high degree of monitoring risk.
- Overlapping Risk – If the scope of the work of the service providers will, not be defined in the proper manner then there will always be the chances of having the work being overlapped between two to three service providers which can further lead to confusion in implementation and thus lead to the closure of the project (Wilkin, 2012).
Major Reasons For Project Failure
Countries have faced the situations where the public sector projects have been failed. These have been failed either because of the lack of planning or lack of controlling, or lack of efficient personnel having specified experience, etc. In the given case study, the two major reasons have been pointed out due to which the public sector projects have been failed.
- Blaming Others – There has been trend in the public sector projects that the officers and the employees excuse themselves if anything goes wrong with the project. This tendency has led to the development of feeling of irresponsibility and unaccountability. Due to this tendency there has been the major shift of the projects from great success to big failures (Nisar, 2013).
- Negotiation with Supplier – Public sector undertakings always try to cut the cost of the product that is being supplied from the supplier of the services that is being provided by the service provider for the purpose of the project. Due to this negotiation, the supplier or the contractor completes his work but the quality of the material or the service that has been provided by them will be very low due to which at the end the projects gets failed and thus leading to the closure of the project.
The above two reasons have been regarded as the major reasons for the failure of the public sector projects.
Steps To Reduce The Risk Of Project Failure
In order to reduce the risk of getting the project failed at the end, following are the factors which will help the public sector undertakings:
- Proper Planning – Before starting of any project, there should be adequate planning of each and every task. For instance for the National Program for IT, if the cabinet members would have planned the scope of the work of the project in the clear and defined manner then there will be the less chances of getting the project failed. Planning shall be with utmost case as the success and failure of the project totally depends upon the planning (Huang, 2017).
- Scope of Work – The scope of work for the contractors shall be clearly defined instead of mentioning and detailing the same later on after awarding the respective contract to the contractor.
- Bottom up Approach – The project shall be detailed in the bottom up approach. It means to say that the plan shall move from the bottom level management to the top level management.
Application Of Cobit Methodology
The COBIT stands for Control Objectives for Information and Related Technologies. It aims at establishing the relationship with the Information technology processes and resources along with the strategy and the objective of the organization. COBIT helps in developing the framework wherein all the issues relating to information technology processes can be linked to the overall functioning of the company and thus helps in integrating all the efforts towards the accomplishment of common goals (Cereola, 2011).
COBIT framework provides the list of requirements which each and every company shall comply:
- Reliability of Information (Bartens, 2014 ; Bartens, 2017).
COBIT has also been regarded as the life cycle model where four steps have been mentioned (Mangalaraj, 2014; Preittigun, 2012). These are:
- Planning and organizing each and every task to be performed.
- Acquisition and implementation of the required technologies, processes and procedures
- Deliver the value to the customer and providing support thereon and
- Monitoring each and every task which is being performed or has been performed and evaluating the same against the set standards (De, 2013).
In the public sector projects, the model can be very easily implemented and if implemented then there will be the less chances of having the project failed.
There can be other methodologies which can be applied to the public sector projects. One of such other methodology has been listed below:
- ITIL – Information Technology Infrastructure Library (Cicmil, 2016). It helps in managing IT services throughout the life cycle of the company. It has provided the standard for the operation of the management of the company. It can be applied in the public sector project in the sense that the information technology process of the public sector goes through the five stages – understanding the role of financial importance in IT, designing IT services, changes in the process of services, properly running and IT department and lastly improving the services on continuous basis (De, 2016).
Conclusion And Recommendation
The report has been made only for the purpose of the senior management. Public sector projects have been in list of consecutive failures only due to the improper management of the project. Management takes into account all the functions which include planning, organizing, directing and controlling and so on. All the functions have not been followed in the proper way in the National Program for IT. And it is important to cite here that these functions have not even followed in any of the public sector projects. The other major reasons of the project failure are the costs negotiation with the supplier and the process of blaming others in order to escape from the responsibility of getting the project done. The reasons have been cited and discussed in detail in the report. Along with the reasons, the COBIT framework has been detailed which is considered as the best framework to execute any of the projects in the best possible manner with low cost and high benefits. In order to conclude the report, the public sector projects do gets failed because of lack of supervision and management and proper and adequate governance.
It is recommended that the public sector should focus on the timely and best delivery of the projects to the end user rather than blaming others for the failure of the projects.
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