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"But the project hasn't worked out as planned. It's running over budget, and an internal state document written in October warns of a "significant risk" that it won't meet the agency's requirements."

This is typical of what our entire industry has been seeing from most of the low-budget offshoring of high-tech projects. Very low initial bids followed by poor quality work that comes in late, if at all.

Quite a few CEO's are going to get burned because of this fact, too (especially as the global drop in the foreign exchange value of the Dollar destroys even the proposed financial savings angle).

If this saga was made into a porn video, it would be called "Fads Gone Wild" with gullible CEO's jumping from one naked fad to the next in some lame attempt to prove that they are hip and youthful.

Sigh...

"Fads Gone Wild" with gullible CEO's jumping from one naked fad to the next in some lame attempt to prove that they are hip and youthful.

Bingo! Every so many years the Finance Boys (junior G-men from the VC firms, etc. that they stick on your board) get caught up in one of these fads and there is no stopping them. These are guys who don't know anything, but who think they do because they talk to a lot of other people (who also don't know anything, but who think they do because they talk to a lot of other people). As soon as the dumb idea acquires a buzzword like "outsourcing" or "downsizing," the wind starts blowing through the heads of these guys and that's the only noise they make until they've wrecked a couple hundred companies.

It's been almost two years now since this fellow I know was bragging about how he had hired Ph.D. mathematicians from the Russian Academy of Sciences to do his new product. He was getting these geniuses for $25,000 a year and they were doing a bang-up job. Like I say, it's been two years... and he still doesn't have his product. In a competitive industry, being late is as good as being dead.

Bogus accounting savings alert

But the delay is costing the agency about $1.4 million in maintenance and support costs for running its health benefits applications on a system hosted by another state agency, said Neitzel. That's money the Washington State Health Care Authority didn't expect to be paying.

The agency might be paying that, but it's in-house "funny money" that probably represents very little extra expense to the state or to the taxpayers. Odds are, when they finally do pull this benefits application off that other system, the other system will cost no less to run. It will just have idle capacity.

Very low initial bids followed by poor quality work that comes in late, if at all.

That's been my experience.

Interestingly enough, we tried used Satyam last year, for a small Lotus Notes project, expected to take 6 months total. Same thing happened. Based on an initial low bid, they got the contract. But 6 months passed and all they had produced was a very unacceptable design doc. They spent the entire project budget just trying to figure out what they were supposed to build, and in the end failed at that.