Poor Business Needs and Requirements Analysis

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Research/Background/Overview/Summary

Electronic Data Systems Corp. (EDS) was a computer software and services company based in Plano, TX, which was acquired by HP Enterprise Services in 2009. In October 2000 EDS was awarded the Navy/Marine Corps Intranet (NMCI) contract, which was worth $9 billion. At the time, it was the largest ever IT contract outsourced from the government. EDS was tasked with creating a Navy/Marine Corp Intranet which would more efficiently pull together disparate systems, improving communications and data exchange domestically and internationally. This intranet would connect 345,000 computers, increasing security, improving efficiency and standardizing operations. According to Center for Technology and National Security Policy, "The scale of NMCI as an information network is second only to the internet itself, clearly an enormous effort." (http://www.dtic.mil/dtic/tr/fulltext/u2/a473186.pdf page 4)

Analysis

Estimation of Costs and Budget
It is agreed by all parties that the NMCI project was plagued with issues from the onset. There were several major issues that were identified, some bigger than others, but most problems were due to one thing: lack of proper business analysis and needs during the negotiation phase of the project. In March 2000, the GAO issued a report concluding that "the Navy has developed and issued its request for proposals without developing a formal analysis of program alternatives and completing a business case analysis, to determine an appropriate acquisition strategy for the proposed Intranet" (http://dtic.mil/get-tr-doc/pdf?AD=ADA473186).
This lack of planning and analysis lead to many surprises along the way for both parties. This is fair enough, since both parties are to blame. Unfortunately, this also resulted in a waste of taxpayer money. This was already not a favored project on Capitol Hill for several reasons, including the large cost of such an endeavor and the eventual loss of government jobs due to increased efficiencies. So, missed targets and failure to comply with Service Level Agreements (SLAs) garnered even more bad press.
One of the biggest surprises EDS discovered early on in the implementation was the number of legacy systems they were expected to convert and integrate into the new system. EDS was expecting to convert 3,000 legacy systems, but that turned to 100,000 systems very quickly. Although EDS tried to work with the Navy to whittle down the 100,000 into a smaller subset for easier management of the project, they had little success doing so. Therefore they were always behind schedule. This was painful for EDS not only due to their reputation being tarnished, but also because they only received payment upon delivery and setup of computers, not when those computers were purchased. In addition, there was a period of 18 months were the Navy ordered a stoppage of payments until certain issues were resolved. EDS didn't expect or budget for either of these ...