More Related Content Similar to IT Failure and Waste (20) More from Michael Krigsman (9) IT Failure and Waste1. Michael Krigsman
Asuret, Inc.
IT waste:
617-905-5950
mkrigsman@asuret.com A world-class problem
© Copyright 2009 Asuret Inc. All rights reserved.
2. Failure is common:
30-70% of projects are
late, over-budget, or
don’t meet plan.
© Copyright 2009 Asuret Inc. All rights reserved.
3. Total failure worldwide:
maybe $6 trillion (SWAG*)
*silly wild-ass guess
http://blogs.zdnet.com/projectfailures/?p=6142
© Copyright 2009 Asuret Inc. All rights reserved.
4. Many of us
ignore the warning signs
© Copyright 2009 Asuret Inc. All rights reserved.
5. So What?
“That’s the IT Department’s
problem, not mine.”
© Copyright 2009 Asuret Inc. All rights reserved.
6. Nightmare
S c e na rio
Levis can’t fill orders
for one week = 98%
decline in quarterly
profits
http://blogs.zdnet.com/projectfailures/?p=917
http://blogs.zdnet.com/projectfailures/?p=935
© Copyright 2009 Asuret Inc. All rights reserved. Image © LS&CO
8. Business vulnerabilities, not technology,
cause the problems
Project
Management
Executive Change
Sponsorship Management
Stakeholder Third-Party
Involvement Relationships
IT
Business
Case Project Resource
Availability
Success
© Copyright 2009 Asuret Inc. All rights reserved.
9. Managing pain was part of the plan.
Adrian Sannier
University Technology Officer, ASU
(Wall Street Journal, 9/25/07)
© Copyright 2009 Asuret Inc. All rights reserved.
10. Guns at Arizona State University
Expected: $70M; Plan: $30M
Typical schedule: 4 yrs; Plan: 1.5 years
Software vendor: Oracle
Project goal: Replace payroll system
Failure: Incorrect paychecks cause severe morale
problems, including need for armed guards on payday
Causes:
Complexity of university payroll
Primary project strategy: maintain schedule at all cost
Accepting high error rate, with plan to fix over time
http://blogs.zdnet.com/projectfailures/?p=412
http://blogs.zdnet.com/projectfailures/?p=418
© Copyright 2009 Asuret Inc. All rights reserved.
12. ALF blames IBM for bankruptcy
Cost: Unknown, but IBM listed as $5.5M creditor
Goal: Outsource ERP to IBM (financials, inventory, etc.)
Background: ALF spun out of Freightliner
Failure: Software problems interfere with inventory
tracking and other issues, causing late deliveries,
customer service issues, and quality control
Result: Bankruptcy filing
Causes:
ALF distracted by deteriorating relationship with Freightliner, problems
with constructing new facility, and economic downturn
Poor project planning and oversight by IBM
http://blogs.zdnet.com/projectfailures/?p=583
© Copyright 2009 Asuret Inc. All rights reserved.
13. [W]hen you’re marching through hell,
just keep marching.
Charles Burbridge
LAUSD’s CFO
(LA Times, 3/19/07)
© Copyright 2009 Asuret Inc. All rights reserved.
14. LAUSD payroll broken: teachers suffer
Budget: $95M; Expected: $135M
System integrator: Deloitte Consulting
Software vendor: SAP
Goal: Replace payroll system
Failure: Teachers not paid
Causes:
University payroll is inherently complex
Roll out and testing were likely flawed (Union: system not
run in parallel)
Complicated work rules
Deloitte did not press LAUSD for complete information
SAP did not want to interfere with Deloitte’s account
http://blogs.zdnet.com/projectfailures/?p=130
http://blogs.zdnet.com/projectfailures/?p=436
http://blogs.zdnet.com/projectfailures/?p=576 © Copyright 2009 Asuret Inc. All rights reserved.
15. Devil’s Triangle relationships
Conflicts of interest are embedded in the structure of the
industry (customer gets fleeced)
Interlocking and conflicting agendas
Customer
System integrator (consultants)
Technology vendor
Confused buyers
Silos and internal conflicts
Wacky system integrators
Customer success vs. consulting revenue
Schizophrenic software vendors
Loyalties split between customers and integrators
© Copyright 2009 Asuret Inc. All rights reserved.
17. Oak Park, IL: Complete abandonment
Cost: $2M
Time frame: complete abandonment after 5-year project
Software vendor: PeopleSoft
Project goal: Replace payroll and financials
Failure: Accounting and finance errors, such as vendors
paid twice
Causes:
Lack of Oak Park sophistication regarding enterprise software
process, scope, costs over time, management, and so on
Low-skill finance employees, lacking basic computer skills, did not
enter data into system
Insufficient change management and user training
http://blogs.zdnet.com/projectfailures/?p=1304
http://blogs.zdnet.com/projectfailures/?p=1358
© Copyright 2009 Asuret Inc. All rights reserved.
18. Project Ocean: Philadelphia’s biggest
and most complex IT system.
Kumar Kishinchand
Former City Water Commissioner
(Computer World, 8/10/06)
© Copyright 2009 Asuret Inc. All rights reserved.
19. Project Ocean: IT overrules experts
Budget: $9M; Actual: $18M
Schedule plan: 1.5 yrs; Actual: 3+ years
Software vendor: Oracle
Failure: Late, over-budget project
Causes:
Water billing is complex: off the shelf software requires customization
Oracle inexperienced: selected by IT department
Project manager / executive sponsor turnover
Finance dep’t in charge; Water dep’t was customer
Politics and empire-building
Separately: consultant billing irregularities
http://blogs.zdnet.com/projectfailures/?p=220
http://blogs.zdnet.com/projectfailures/?p=250
© Copyright 2009 Asuret Inc. All rights reserved.
20. Alignment mismatches drive poor decisions
Poor communication, agendas, and different measures of
success create alignment gaps:
Information silos
IT / lines of business
Internal / external groups
Distortions: poor judgment, politics,
and personal agendas
Extreme case: “Successful” process / failed outcome
© Copyright 2009 Asuret Inc. All rights reserved.
21. Management
pressure
and the IT divide
© Copyright 2009 Asuret Inc. All rights reserved.
23. J.Crew: Management overrules IT?
Cost: $3M plus lost sales and dissatisfied customers
Failure: Impaired ability to capture, process, ship, and
service orders
Causes:
Aggressive internal planning and schedule
Insufficient testing of new system before replacing old
Management accepted responsibility
Plausible scenario: management pressured IT to accept aggressive
schedule
http://blogs.zdnet.com/projectfailures/?p=1015
© Copyright 2009 Asuret Inc. All rights reserved.
27. Sweeping changes are needed
Detect weak signals
Early warning systems
Locate problems, amplify message, and communicate to management
Create feedback loops
Increase management awareness
Create a culture of continuous improvement
Management must listen and act
Distortions interfere with success
Denial is the handmaiden of failure
Political agendas push against success
Poor judgment is endemic in failure situations
Industry structure contributes to repeated failure
Devil’s Triangle
Analyst conflicts
© Copyright 2009 Asuret Inc. All rights reserved.
28. Detect weak signals
Work across departments to leverage the collective
intelligence and experience of all stakeholders.
© Copyright 2009 Asuret Inc. All rights reserved.
29. Facilitate consensus across silos
Use non-threatening techniques to:
Avoid bias
Remove emotion and political pressures
Create organizational consensus and enhance
collaboration
© Copyright 2009 Asuret Inc. All rights reserved.
32. Reveal mismatched expectations
Executive management view:
Business case has
high vulnerability
IT department view:
Business case has
low vulnerability
© Copyright 2009 Asuret Inc. All rights reserved.
33. Identify critics / champions
Analyze differences in stakeholder opinion across
the organization, helping management target areas
needing communication, training, and support.
Participant 10
Participant 11
Participant 12
Participant 1
Participant 2
Participant 3
Participant 4
Participant 5
Participant 6
Participant 7
Participant 8
Participant 9
Critic Champion
© Copyright 2009 Asuret Inc. All rights reserved.
34. Deliver comprehensive reporting
Suitable for Board, management, staff, and partners:
Identify critical health indicators
Highlight specific vulnerabilities
Target immediate and actionable next steps
© Copyright 2009 Asuret Inc. All rights reserved.
35. Trusted, objective advisor
Independent authority on IT success
Absolutely vendor-neutral
For more information contact:
Michael Krigsman, CEO
Email: mkrigsman@asuret.com
Web: http://asuret.com
Blog: http://blogs.zdnet.com/projectfailures
+ 1 (617) 905-5950
© Copyright 2009 Asuret Inc. All rights reserved.