The subtitle of this post was going to be “Why you should never read the comments:
Late last week I read a well-written article about yet another IT project ending up in a legal dispute. I call this “Lawyers at 20-paces”. (https://www.itnews.com.au/news/brisbane-city-council-dumps-technologyone-469597)
Technology One is an Australian technology provider. It is in a legal dispute with Brisbane City Council, one of its customers. I happen to know a little about TechOne, as Technology One is often called. That is why when I read the article on the ITnews site, I went on and read the comments.
The comments had it all
- Rants about outsourcing
- The TechOne deal didn’t involve outsourcing, it was a contract software implementation.
- References to Monti Python
- · Comparisons to the Queensland Health/IBM debacle
- This time they pulled the plug before putting an incomplete product into service. What do you expect them to have done?
- A rant against neoconservative ideology
- Double huh?
In a past life, I dealt with Local Government frequently. It is an interesting market segment. You have a group of independent organisations that are all trying to do more or less the same thing. But, they are completely non-competitive with each other.
TechOne has been gaining ground in this area, and its modular product suite allowed it to displace competitors one-by-one, or to take a clean sweep of the council’s core IT. Brisbane City Council was an example of the second. There are operational differences between different councils, and in my experience, TechOne is customised for each customer. This is both an extra source of revenue for Techone but introduces risk. It has also limited adoption of the SaaS model, which is unfortunate.
This is a Big deal for both parties. The $50m that the council is seeking in damages is a big chunk of last year’s $249m revenue, and would completely wipe out the $41m profit. Brisbane City Council is a much larger operation, with a turnover of roughly 2 billion. A loss in the courts is hardly likely to bankrupt the organisation. It would probably result in some limits on services.
It is also significant for TechOne’s other customers. A loss that large would result in the company cutting costs and seeking more revenue. This would mean more money from its existing customers. There are other issues at play. There was an exception in some quarters that the features paid for my BCC were going form part of the next version. The cancellation of this contract puts this in doubt. TechOne is unlikely to be willing to fund that development themselves. Particularly not if a settlement or a loss at court pushed them into the red.
It has also raised questions about TechOne’s ability to deliver to other customer and scale as an organisation. Selecting a core business platform is a long term investment. Other organisations may be less willing to make that investment unless the courts decide in TechOne’s favour.
Finally, where is the insightful commentary? The local government sector is hardly small, surely someone with actual knowledge would comment on the article? Or is there a better forum?