In 2003, the Department of Health and Human Services in Victoria, Australia, initiated a AU$323 million project to develop HealthSMART, an integrated IT system that would deliver resource management, a medical imaging archive, and centralized patient and financial management across ten health care service providers in half of the state. The system aimed to bring efficiency to health care and benefit patients and service users.

HealthSMART promised implementation of its deliverables by 2007 and purchased a base system from an American organization that was intended to meet local requirements. However, upon commencement of the project, the scope of the IT system that had been brought in from the United States proved inadequate.

This meant that customizing it for local requirements was ineffective, and further financial investment had to be made to reprogram the base system.

A myriad other problems soon followed. Each health care service had individual business needs from the system that were not considered central to the project and were therefore overlooked, and end users were not managed appropriately as high-priority stakeholders.

Managers were also unable to hire people to fill important roles. One of the major criticisms of this project was that it often focused too much on short-term wins and disregarded the bigger picture. For example, in 2011, the department announced that the financial and patient management part of the system had been built within budget. However, this was a misleading claim: due to lack of funds for implementation, the system could only be rolled out in four out of ten local services. Once implemented, doctors complained of incorrect terminology and out-of-date medical information.

The absence of detailed project planning was fundamental to the project’s failure and resulted in costs overrunning by AU$140 million. The project was finally brought to a close at the end of June 2012 after the Department of Health refused to provide any more investment.

The issues with HealthSMART are not unique to Australia, and parallels of this kind of development can be found across the globe. Projects that are funded by state governments are often subject to external audits to ensure value for public money and to learn valuable lessons for the future. HealthSMART is an unfortunate illustration of how poor planning can harm a project rather than lead it to success.

Questions

1. Imagine that you are the project manager of the HealthSMART program. What factors should be considered at the start of the project to ensure that the project is successful?

2. Now imagine that you are auditing the project several years after it has started. What would you advise the project manager to do to improve the situation?