Big consultancies linked to failing public IT projects

Independent IBRS research into 23 Australian public sector IT transformation projects links heavy reliance on large consulting firms to higher risks of delays, budget overruns and project failure.

The study examined major programmes that replaced or refreshed core business systems across state, federal and local government agencies, education institutions and government businesses. It focused on platforms such as finance, HR, payroll and student management-systems the report described as "the fundamental, non-negotiable engines of modern enterprise"-that agencies typically run for many years.

Across the projects assessed, IBRS found a strong correlation between using Tier 1 consultants for strategy and programme management and poorer delivery outcomes. It associated that approach with cost blowouts, extended timelines and a higher risk profile than alternative delivery models.

Delivery model

The research contrasted two broad execution patterns. In one, large consultancies led strategy and programme control. In the other, the public sector organisation and its chosen software supplier held primary accountability, with external advisers used only for discrete specialist tasks.

IBRS reported better outcomes when agencies built internal capability and maintained close working relationships with software vendors. Projects were more likely to succeed when consultancies were used selectively, and when the consultancy was smaller and specialist.

The report also flagged a mismatch between some consulting-led models and modern cloud deployment. "Tier 1 firms often rely on established, heavyweight frameworks and 'build and run' models that clash with the agility required for modern SaaS (software-as-a-service) implementations," it said.

It also pointed to organisational consequences when strategy and ownership sit outside the agency. "Furthermore, when strategy is outsourced, organisations often lack the internal ownership necessary to drive business process change," the report said.

Public sector risk

The findings come as governments continue to modernise core administrative platforms while trying to control delivery risk and ongoing operating costs. Large transformations often combine technology change with process redesign and workforce impacts. They also attract scrutiny from audit bodies and parliamentary committees when programmes run over time or exceed budgets.

The study did not name the individual projects analysed in the material released. However, it said the sample covered a mix of public sector organisations and core business systems across Australia. Because these platforms underpin day-to-day operations, the report noted, agencies can struggle to absorb disruption when programmes slip.

TechnologyOne, which commissioned the research, said the findings support a shift in how agencies approach programme governance and external support. The company supplies business software to the public sector and other sectors, and has long argued that cloud delivery offers a more predictable path for upgrades than heavily customised deployments.

Industry criticism

TechnologyOne chief executive Ed Chung criticised the role of the largest consultancies in government technology programmes and challenged the way risk is assessed at the start of projects.

"The Big 4 have built a mystique about themselves - especially in parts of the federal, state and local government - as the experts who can de-risk complicated IT projects," Chung said.

"This important study demonstrates what we have long known - they are the false prophets of the industry and are associated more with failure than success when it comes to modern core business systems," he said.

Chung urged agencies to reconsider how they define and manage risk based on the patterns identified in the projects reviewed. He also argued that consulting-driven models can separate advice from ownership, weakening accountability for outcomes.

"The old model of having giant, overseas owned consultants being paid to recommend and then implement software provided by overseas software giants who are their commercial partners is not only outdated, it is positively scandalous in 2026," Chung said.

The IBRS research adds to a growing debate over the role of large consultancies in public sector reform programmes, particularly where the same firms provide both advisory services and delivery support. It also sharpens a common procurement question: whether to invest in internal programme leadership and technical understanding, or buy it externally through long-term engagements.

As governments plan the next wave of core system replacements, the findings are likely to inform decisions about governance structures, the balance between internal capability and external partners, and when specialist consultancies should be engaged.