Reconciling Innovation With Control: The Air Force's $1.3 Billion Lesson In Agile. High-frequency trading and the $440m mistake. 10 August 2012Last updated at 23:47 GMT By Tim Harford BBC Radio 4, More or Less Computers and clever maths enable traders to buy and sell in the blink of an eye.
But does high-frequency trading make matters worse when things go wrong? A strange thing happened earlier this month. The New York Stock Exchange launched a new electronic trading platform. A company called Knight Capital had created a new computer program to link up with the new platform in order to trade shares on it. "There was some problem with the program," says Felix Salmon, finance blogger for Reuters in New York. "We don't know exactly what. Oops. But high frequency trading is different. Humans still watch the systems, but the computers move far too quickly for us to react to everything they do - and at Knight Capital, the computer glitch meant the company was making trades it didn't intend to make. Now this isn't quite as insane as it sounds.
On 6 May 2010, the UK was preoccupied with a General Election. NHS pulls the plug on its £11bn IT system — www.independent.co.uk. * 29 October 2013: Jeremy Hunt lacked power to downgrade NHS services at Lewisham Hospital, Court of Appeal rules Instead, local health trusts and hospitals will be allowed to develop or buy individual computer systems to suit their needs – with a much smaller central server capable of "interrogating" them to provide centralised information on patient care.
News of the Government's plans comes as a damning report from a cross-party committee of MPs concludes that the £11.4bn programme had proved "beyond the capacity of the Department of Health to deliver". The Commons Public Accounts Committee (PAC) said that, while the intention of creating a centralised database of electronic patient records was a "worthwhile aim", a huge amount of money had been wasted. "The department has been unable to demonstrate what benefits have been delivered from the £2.7bn spent on the project so far," Margaret Hodge, chair of the PAC, said.
McKinsey Report Highlights Failure of Large Projects: why it is better to be small, particularly in IT. A recent set of studies published by McKinsey Quarterly provides further evidence that the bigger they are the harder they fall.
Given that the McKinsey Quarterly’s audience is predominantly business executives rather than IT professionals, it’s important that CIOs are aware of the findings and have a reasonable response. Large projects not only fail more often they deliver less. According to the McKinsey/Oxford study half of IT projects with budgets of over $15 million dollars run 45% over budget, are 7% behind schedule and deliver 56% less functionality than predicted. That means that: At least half the time — achieving at least $15 million in benefits, requires spending $59 million Obvious answers to an obvious question The report goes onto suggest four disciplines that McKinsey calls “value assurance” and contains something that CIOs already understand. Each of these ‘value assurance’ disciplines is self evident for large and complex projects. I believe they should. Half of ERP Projects Achieve Less Than Half of Projected Benefits CIO.com.
A report released this week highlights the challenge businesses face in making lengthy and expensive ERP projects worthwhile, with 50 per cent achieving less than 50 per cent of their projected benefits.
Panorama Consulting Solutions surveyed 246 enterprises from 64 countries during 2011 and found that companies do not take time to identify costs and potential cost savings, and therefore find it difficult to measure the overall financial impact.This equates to benefits not being realised. The report highlighted that 27 percent of respondents realised only 31-50 per cent of projected benefits; 17 percent realised 0-30 percent of projected benefits; 4 percent stated that they had not experienced any measurable benefits; and 2 percent said that they had not put a business case together. The availability of information was the main benefit noticed by organisations (75 percent), followed by increased interaction (60 percent) and improved lead times (38 percent). Government for years ‘did not know what it was spending on IT’ The government did not know until recently what it was spending with IT suppliers, according to a representative charged with managing spending.
Bill Crothers, a Crown Representative, told delegates at the Public Sector Efficiency Expo in London today that his role, also mirrored by eight other individuals, was created to pull government departments together as one customer and tackle the problem. "The government really did not know what it spent with suppliers," he said. "We had to ask the suppliers how much it was, and they told us. " Crothers said the problem was that individual departments had "some idea", but tallying the total across government was more difficult, as was being clear of each department's future obligations and net financial position with suppliers.
Additionally, he said, departments were signing contracts with suppliers, then being 'upsold' to larger, all-encompassing deals "that took no notice of sensible market prices".