Thursday, October 17, 2013

NASDAQ weighs in on Apple Fail and Obamacare Fail Analogy

I'm not the only who gets the Apple Fail and Obamacare Fail Analogy.  This mornings NASDAQ Briefing had this commentary attached... Note that Apple spent $150,000,000 to develop the iPhone and the Federal Government is up to over $600,000,000 to setup a website to connect to insurance companies... Do you understand why it is a bad idea to continue to rely on the Federal Government to do things best left to the private sector?

Why Government Tech Is So Bad

Just before hobbled online, Kathleen Sebelius, secretary of health and human services, compared the federal health-care exchange to her iPad's new operating system.

If users found a few bugs in their iPads, she argued, most wouldn't consider them a complete disaster. Instead, they'd recognize that technology is complicated, that errors are common, and they'd wait for an update. Apple Inc., she added, has "a few more resources" than her department, so "hopefully [citizens will] give us the same slack they give Apple."

That argument is as clueless as it is misleading. While it's true that Apple is fantastically wealthy, its product-development costs aren't necessarily greater than those of the federal government. As Fred Vogelstein reports in his coming book, Apple spent about $150 million developing the iPhone. The health-insurance exchange--which, let's remember, is merely a website meant to connect citizens to insurance companies, something quite a bit less complex than Apple's groundbreaking miniature computer--so far has cost at least $360 million, and possibly as much as $600 million.

So how can the government spend so much more on technology and not get anywhere near equal results? That gets to the larger problem with Ms. Sebelius's iPad argument: When Apple royally screws up, the world doesn't cut it any "slack," and that's a good thing. Note what happened last fall, when Apple replaced Google Inc.'s maps app with its own half-baked version: iPhone users rebelled, the tech press went ape and, within a few days, Chief Executive Tim Cook apologized and eventually fired the company's mobile-software chief.

In consumer tech, performance matters. When things go wrong, customers balk, investors flee, and heads roll. In the government, despite several attempts at reform, few of these consequences seem to apply.

Isn't it time that changed? has been described as a failure by many experts, including supporters of the health law--is only the latest in a series of faulty, overpriced governmental tech launches during administrations of both parties.

It doesn't have to be this way. There's nothing inherent about the phrase "government technology" that should inspire a parade of incompetence; the tech needs of the feds don't have to be vastly more complicated, expensive or legally daunting than the rest of the world's. Instead, the problem is a lack of accountability. As Ms. Sebelius's comments underscore, there's an expectation, bolstered by the historical record, that the government can't do tech well, so we're all expected to forgive its glaring shortcomings.

The truth is that the government could revamp its tech house. For less money than we currently spend on IT, and with a smidgen of political will, we could remake the nation's IT infrastructure using off-the-shelf hardware and software and the best tech practices employed by the world's most admired tech companies. If we do so, dealing with the government--whether for health care, contracting, taxes, or for anything else--could really be as painless as buying a book from Amazon.

Though everything in Washington is partisan these days, this thing doesn't have to be. Both Democrats and Republicans ought to be able to get on board with tech reform; it would improve how we all interact with the government and make the whole system more efficient and affordable.

Tech companies, too, should fight for a new way. Today a small number of insiders are awarded the bulk of federal IT contracts. Reforming the way the government buys and uses tech would open up a vast market to companies such as Apple, Google, Inc., a host of upstarts that are currently revolutionizing every other corner of economic life.

When you examine the follies at the heart of, two important factors stand out, experts say. The first is personnel--like many government IT projects, this was implemented by people who don't understand IT. "There's a lack of technology leadership at the agency level, leading to an inability to execute," said Vivek Kundra, who was appointed the nation's first chief information officer by President Barack Obama in 2009 and who is now an executive at the cloud-services company Inc.

Mr. Kundra said that when he was the nation's CIO, the White House pushed a "cloud-first policy" that encouraged government agencies to avoid creating new server farms every time they had to build new websites, which is how the rest of the world works with tech. "It seems like with, a set of decisions were made at the agency level that aren't in line with how modern technology is deployed," Mr. Kundra said.

Why would the government implement the sort of tech infrastructure that no one else would consider? The answer is the mother all problems in government tech: "procurement." That's jargon for the broken process by which the government buys things.

Today, any company looking to work with the government must navigate an obstacle course of niggling, outdated regulations and arbitrary-seeming requirements. For instance, your technology must be Y2K-compliant just to get in the door. The process locks out all but a tiny handful of full-time contractors--companies who also happen to be big federal lobbyists. (Note how CGI Group Inc., which won the largest contract to build, lobbied on behalf of the health-care law.)

Clay Johnson, a former Presidential Innovation Scholar and the CEO of a reform-minded software company called Department of Better Technology, has written a seven-part manifesto on how to fix procurement, a prescription he says would go far in resolving most of the government's tech issues. His upshot: The government should strive to buy tech like the rest of the world does, opening itself up to vastly more vendors, and aligning price with performance. Logistically, none of the steps he outlines would be very difficult to accomplish. It would just require a full-court press from political leaders to make it happen.

These days, that sounds like reason enough for pessimism, though Mr. Johnson argues that government's tech issues are on the verge of reaching a tipping point that will force action.

"Long term, the government is not able to survive if it keeps using outdated technology, because the gap between last year's technology and this year's technology is always exponentially growing," he said. "You walk into the DMV and the person behind the desk has a CRT monitor and you have an iPhone--that leads to a gap to the perception of confidence. We need to fix that if we want the government to maintain some semblance of confidence, and competence."

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