Recently the Torfaen digital project hit the headlines after £250,000 was spent promoting a small government website which failed to launch, and was eventually described as ‘an embarrassment’, after being cancelled. This got us talking in the office about other projects that had failed to launch, and it turns out that there are many similar cases to Torfaen. This raises the big question, where does the money go on these big projects?
The Torfaen digital project aimed to “unleash the wealth of wisdom” of people in the Welsh county borough council of Torfaen, with the purpose of providing a hub to help grow the community. The idea was great, but the execution left a lot to be desired. The project was set up as the Wisdom Bank and received £250,000 from the Big Lottery Fund in Wales. Unfortunately, after two years it only had 340 users, and the management decided to pull the plug.
WHY DID IT FAIL?
The likely reason it failed was a lack of market research. The local government appeared to have just assumed that it was a good idea and that people would use it. However, with so many social channels open already, few of those online already will be tempted to join a government backed website to share information. Torfaen attempted to cover everything but succeeded in specialising in nothing.
As a council area, Torfaen is not big, with a population of only 91,000. From our experience, this is not a market big enough to grow a commercially successful community site. You need to target a market of millions to attract a healthy user-base, and even then, it takes time and effort to nourish and grow your online community.
WHAT COULD HAVE THEY DONE INSTEAD?
As it stands, the Wisdombank.org.uk website is not a complex site. Many similar community websites have been built on platforms such as WordPress which provide a similar functionality – such sites can be built for around £1,000, which once again raises the question of money.
Maybe much of the £250,000 was spent on marketing? Well, according to Majestic, Wisdombank.org.uk only has 45 backlinks from 5 different domains, which suggests that little effort was made to promote it online. One link is from Tofaen.gov.uk and the other links seem to be from reviews of the sites (and one criticism published last month).
Torfaen’s Wisdom Bank is not alone in wasting huge amounts of money on projects that are unviable or just never completed. Let’s take a look at a few.
BIGGEST TECH FAILURES TO LAUNCH
Government backed projects do seem to feature highly on Wikipedia’s page on “List of failed and overbudget custom software projects”. The Wessex Health Authority spent £63 million on RISP, a project to integrate computer services, before it was abandoned. One of the most famous UK failures was the NHS Connecting for Health project which burned through £12 billion of public funds before it was largely discontinued.
The UK Border Agency planned to create e-Borders, an “advanced passenger information programme”, but after spending £412 million, it was cancelled.
Of course, many private enterprises also fail to launch. During my time in London’s banking sector I worked on an IT project that was scrapped after three years, at a cost of over £2 million.
WHERE DOES THE MONEY GO?
Most of the money disappears into management costs. IT experts, coders and web developers do charge a high fee, but they are rarely responsible for the multi-million pound costs.
According to TheGuardian, the legal costs of the NHS failure amounted to £31.5 million, but a vast majority of the costs were in the £3.1bn contract with the IT systems group Computer Science Corporation.
With such massive projects as the NHS, it is easy to see how costs quickly mount up. Much of Torfaen’s Wisdom Bank bill was probably spent on dedicated management, who may well have been contracted in to run the project. Project managers for IT systems and web portals can charge around £300-£500 a day, which means just one contractor would cost around earning £300 a day would cost £144,000 over a two year period (based on 480 workdays).
While we do not know how Wisdom Bank was developed and marketed, from our experience we do know that it is possible to build, manage and promote a platform such as this for considerably less than £240,000!
DREADED PROJECT CREEP
To avoid running up huge costs and eventual failure, it is important to have a clear plan. Market research must be carried out in the first instance to determine if the idea really is viable – many great ideas turn out to be a quirky whim of one individual and not something that the market actually needs. If the idea is viable, careful planning is required to determine the total costs of development and launch.
Failure to launch is often the main reason projects fail – the platform is ready for the market, but the market is completely oblivious to its existence. In the run up to launch you need to conduct a well-planned marketing campaign, and any digital system must start focus on digital marketing. Internet users are very fickle today and also have a short attention span, so it is vital to build an engaged audience before launch.
We can learn a lot from how the film industry generates interest – teaser trailers are now a major feature in most film marketing campaigns. The idea is to provide just enough information to catch somebody’s attention and raise conversation. Teaser trailers are designed to get people talking, and this leads organic and viral marketing. A 30 second trailer may be shared and viewed by millions of people with no active marketing from the film studio.
Of course, this is a perfect scenario, few businesses have the funds or the skills to generate this type of interest (and their market is generally much smaller and less engaged with the product). But, we can learn from these ideas and develop a social media strategy, which combined with a PPC advertising campaign and some search engine optimization, it is possible to build an audience and position a product so that it is truly ready for launch.
In April we looked at how Transform is using the blogging community to generate interest in its products. This method can be very effective and it is not restricted to the beauty industry. Given a good budget, it is possible to very quickly reach out to a large part of your target market in a very short time. Maybe if WisdomBank had engaged with the larger tech community prior to launch it would not have been the failure that it became.