The failure ofWilliam Hill's Nextgen online betting
platform, which was developed in-house, raises questions about
whether IT directors should embark on business-critical software
development projects in-house or use third parties.
In a trading statement issued earlier in the month, the company
said it had decided to abandon its Nextgen project.
William Hill said that following an independent review of the
project in November 2007, the board, "decided to terminate the
NextGen technology programme and to implement an externally
developed third-party technology solution". The failed project will
cost William Hill £26m and the replacement system is expected to be
implemented by the end of the year.
The project's objectives were to move William Hill from legacy
IT on to a modern IT infrastructure using a Java-application
architecture based on Java, BEA Weblogic/Portal and Oracle. The
migration was designed to make William Hill more agile and enable
it to offer new services to its customers, which would
differentiate William Hill from its competitors.
With so much at stake, why did it fail?
Any IT director running or considering running a major software
development project should be aware of the limitations of internal
development work, said Gary Barnett, partner and chief technology
officer at analyst Bathwick Group, "There is a massive scale issue
between creating a relatively small in-house application that is
well-defined versus and creating an application that runs your
whole business."
The difference in scale makes enterprise-wide projects
exponentially more difficult to get right, according to
Barnett.
With this in mind, Barnett urged IT directors to consider
whether they would be prepared to invest in the level of
source-code management, project management methodology and skills
of a commercial enterprise software company. Without tight control,
Barnett said internal projects risked growing in complexity and
ultimately failing.
Neil Ward-Dutton, research director at IT advisory firm MWD,
said consumer-facing websites tended to be at the forefront of
using new technologies. "It can be quite easy to jump on the 'me
too' bandwaggon without looking at why customers need the new
functionality."
Online betting sites have a unique challenge. "They have to
handle a large volume of traffic and are handling people's money,
so site processing needs to be in real-time to avoid changing the
betting odds," Ward-Dutton said. "The transaction rates they have
to sustain is like a small financial market handling thousands of
transactions per second." At some of the sites Ward-Dutton has
looked, the IT team has needed to rewrite application servers to
make them more efficient and deploy in-memory databases to support
the peaks in betting traffic.
But all businesses should focus on tight software development.
It is not uncommon for IT directors to work with an external
consultant to fire fight when a project starts going wrong. The
experts agree that prevention is a better approach, and IT
directors should consider using such consultants to help them
establish basic software development project management.