October 21st, 2009

Gartner Magic Quadrant lawsuit: Sour grapes or real gripes?

Posted by Michael Krigsman @ 9:48 am

Categories: CIO issues, Project strategy, Research and statistics, Vendor relationships

Tags: Lawsuit, Quadrant, Analyst, Gartner Inc., Michael Krigsman

Industry analyst firm, Gartner, is the target of a lawsuit from software vendor, ZL Technologies, challenging the “legitimacy” of Gartner’s Magic Quadrant rating system. The suit has brought forth an array of divergent opinions.

Background. As one of the top analyst firms, with revenue in excess of a billion dollars, Gartner’s opinions and recommendations carry substantial weight with technology buyers and influencers.

On a special website page devoted to the lawsuit, ZL Technologies claims that Gartner’s Magic Quadrant does not present a fair and accurate portrayal of the software market. The company says:

Gartner’s use of their proprietary “Magic Quadrant” is misleading and favors large vendors with large sales and marketing budgets over smaller innovators such as ZL that have developed higher performing products.

Here is the original legal filing:

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October 12th, 2009

Oracle's integration strategy: Customer trade-offs

Posted by Michael Krigsman @ 9:16 pm

Categories: CIO issues, IT issues, Oracle, Vendor relationships

Tags: Strategy, Car, Oracle Corp., Michael Krigsman

Oracle’s dual Presidents, Charles Phillips and Safra Catz, today opened the company’s OpenWorld conference, which is taking place this week in San Francisco. Their keynote speech emphasized Oracle’s efforts to integrate its diverse product line in a bid to make life simpler for customers.

Catz opened her part of the keynote by explaining what she called the “back story” behind Oracle’s acquisition strategy. She did this with a humorous look at what would happen if we bought cars the way we buy enterprise technology.

In such world, Catz said we would go online to buy thousands of disconnected parts from many vendors, which our children would assemble into a completed car because the parts would not come with instructions. Just as we finished assembling the car, she continued, a light would go on indicating that an upgrade or patch is required. Catz said, “We would then do it all again.”

Catz used this car assembly story as a metaphor for product complexity in the enterprise. According to Catz and Phillips, Oracle reduces this complexity by bringing together under one roof infrastructure, hardware, and database products that are “engineered to work together.”

This diagram expresses Oracle’s end-to-end vision:

Regarding the “open” tag line on the slide, Catz said, “We are slavishly devoted to open standards.” Wow, that’s a pretty strong statement.

THE PROJECT FAILURES ANALYSIS

From a project failures perspective, important truths lie beneath the cute story about assembling cars at home from parts purchased online. As Catz correctly points out, many organizations purchase enterprise technology in pieces from multiple vendors, which can make the selection and implementation process time-consuming and expensive for the customer, relative to buying from a single vendor.

I discussed these points during a follow-on conversation with Paco Aubrejuan, Oracle’s Vice President of PeopleSoft Enterprise, who explained the benefits of single-vendor integration:

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October 8th, 2009

Workday, SaaS, and failure: 'A matter of trust'

Posted by Michael Krigsman @ 6:00 pm

Categories: CIO issues, Cultural issues, End-user impact, Failure 2.0, IT issues, Project failures, Project success, SaaS, PaaS, and SOA, Vendor relationships

Tags: Customer, Workday, Outage, Naomi Bloom, Andrew McCarthy, Manjit, Manufacturing, Michael Krigsman

Software as a service (SaaS) vendor, Workday, which sells human resources applications, recently had a 15-hour outage, during which time its system was unavailable to customers. In an unusual twist, this post is about success and not failure.

Background. The story begins when I heard about the outage through an anonymous source. To learn more, I sent out this Twitter message:

Naomi Bloom, a top HR technology and service delivery expert, responded:

Following Naomi’s suggestion, I checked Workday’s blog for details:

[T]he network attached storage (NAS) device that stores operating system files for our production servers detected a corrupted node within a backup RAID array. Rather than simply log the error, which is what it is supposed to do, the NAS took itself off-line. It is ironic that the redundant backup to a system with built-in redundancy caused the failure.

This type of error should not have caused the array to go offline, but it did. The most important result is that our failover plans worked as expected. Within hours, all customers were live in our secondary datacenter with all their data intact.

Workday gets in touch. Two days later, Workday’s Communications Director, Andrew McCarthy, sent me an unsolicited invitation to discuss the outage, even though I previously never had contact with the company.

The note caught me off-guard because it’s the first and only time a vendor has reached out to me proactively following a failure. I’ve written almost 750 blog posts related to IT failure, and Andrew’s invitation is unique in my experience. Here’s the full text of that email:

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September 24th, 2009

Pay to play: The vendor / analyst mating dance

Posted by Michael Krigsman @ 10:12 am

Categories: CIO issues, Consulting, Devil's Triangle, IT issues, Vendor relationships

Tags: Analyst, Games, Enterprise Software, Personal Technology, Software, Michael Krigsman

Certain elements of the enterprise software ecosystem contribute directly to failed IT projects. For example, I have written extensively about the Devil’s Triangle, which describes conflicting relationships among enterprise buyers, technology vendors, and system integrators.

• Related: Exploring the Devil’s Triangle

Industry analysts can also contribute to failures by creating mismatched expectations between customers and vendors. This happens when analysts slant coverage toward a specific vendor in hopes of later securing a lucrative consulting contract or retainer.

I put together a diagram to illustrate:

CMS Watch founder, Tony Byrne, details the process in a blog post titled The vendor-analyst echo chamber game. Here’s a quote:

[S]oftware vendors typically don’t spend money with analyst firms to bribe them outright. Rather, they purchase attention through which they can try to get an analyst to define the marketplace and customer challenges according to that particular vendor’s approach.

It’s the vendor-analyst echo chamber game, designed to manufacture artificial demand.

Although the diagram describes a fundamental conflict of interest, many analysts have integrity beyond reproach. The best analysts play an important role in helping buyers make wise strategic decisions. Those excellent folks provide substantial value and contribute to project success by aligning expectations between technology buyers and sellers.

What do you think about this issue? Please share your thoughts.

September 9th, 2009

6 dirty tricks from enterprise vendors

Posted by Michael Krigsman @ 8:04 am

Categories: CIO issues, IT issues, Vendor relationships

Tags: Customer, Enterprise Software, Software, Michael Krigsman

Enterprise software vendors sometimes play unpleasant games to sell their products. InfoWorld describes these tricks in a story called, Dirty Vendor Tricks, written by veteran journalist Dan Tynan, who has covered many stories of IT failure.

• Related: Ugly enterprise software sales tactics

Here’s Dan’s list of six tricks enterprise vendors use against customers, but the descriptions are mine:

1. The magic demo. Using presentation slides and canned demonstrations, the vendor claims to solve the customer’s most challenging problems. It’s all good, except when there is no real product to back up the promises.
2. Underbid, then overcharge. A beautiful trick often played elegantly by consulting companies and system integrators. These folks neglect to inform the customer that the initial software purchase price does not include much higher associated costs for equipment and implementation services.
3. The customer headlock. One of the cleverest tricks in the book, this one uses high switching costs to lock-in customers. The time, cost, and hassle of swapping enterprise systems mean vendors have their customers by the… well, you know what.

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September 7th, 2009

Exploring the Devil's Triangle

Posted by Michael Krigsman @ 12:16 pm

Categories: CIO issues, Consulting, Devil's Triangle, Governance, IT issues, Implementation, Project strategy, Vendor relationships

Tags: Software, Consultant, Software Company, Customer, Triangle, Devil, System Integrator, Tools & Techniques, Management, Michael Krigsman

The Devil’s Triangle describes a basic set of dysfunctional relationships that push many projects toward failure. Although I’ve written about many facets of this important topic previously, today’s post summarizes the issue succinctly.

Three parties participate in virtually every major software deployment: the customer, system integrator or consultant, and the software vendor. Since each of these groups has its own definition of success, conflicts of interest rather than efficient and coordinated effort afflict many projects.

The Devil’s Triangle explains how economic pressures can drive software vendors and system integrators to act in ways that do not serve customer interests. It also offers insight into the ways some enterprise software customers damage their own projects.

Devil’s Triangle relationships are a short sighted and self-interested way of life for too many participants in the enterprise technology landscape.

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August 7th, 2009

Five reasons to fire your system integrator

Posted by Michael Krigsman @ 7:24 am

Categories: CIO issues, Consulting, IT issues, Project management, Vendor relationships

Tags: Consultant, System Integrator, Remote Access, Blogging, Outsourcing, Internet, It Operations, Business Operations, Outsourcing & Subcontracting, Michael Krigsman

Today’s post is written by guest blogger, Phil Simon, an independent systems consultant and author of the excellent book Why New Systems Fail.

Although consultants make easy scapegoats when projects go wrong, there are definitely times when you should replace the incumbent.

Here are five good reasons to get rid of your system integrator:

1. The consultants are difficult to work with. If their attitude isn’t helpful then antagonism arises and the project will suffer. However, don’t mistake “being difficult” with being honest.
2. The consultants are inexperienced. No consultant knows the answer to every client question. However, if their answer to the most basic questions is routinely “I’ll have to get back to you on that,” then show them the door. Be wary of SI’s that promise you rock stars but give you trainees.
3. The SI’s management is not responsive. Excessive turnaround time from the project or client manager exacerbates delays and causes problems. Give the consultants an opportunity to cure the problem, but if they don`t then cut the cord.
4. The SI churns your account. Don`t haggle over inconsequential sums, but overcharging is a cardinal sin. Do not ever accept an SI that works inefficiently just to rack up billable hours.
5. The SI’s travel expenses are unreasonably high. Travel is a necessary part of business, but excessive travel is bad news. In today`s economy, every consulting company should consider ways to reduce travel costs with remote access, collaboration software, and other tools.

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July 30th, 2009

Software pricing and the Devil's Triangle

Posted by Michael Krigsman @ 11:10 am

Categories: CIO issues, Cultural issues, Devil's Triangle, Governance, IT issues, Project strategy, Vendor relationships

Tags: Michael Krigsman

Conflicting and interlocking agendas between enterprise vendors and customers contribute to many failed projects. In an insightful blog post, long-time vendor executive, Dennis Moore, identifies an economic model to address this issue.

• Related: The Devil’s Triangle concept

Dennis’ model describes enterprise software pricing as a function of customer behavior. His initial post on the topic explains how software providers should view this aspect of the world:

Customers should also think about why vendors behave the way vendors do…. Is vendor behavior driven by customer behavior? 100 percent.

Still, many customers feel that they are being “taken advantage of” by vendors. From a vendor perspective, this is hard to understand…. Customers are able to network, demand references from vendors, and read industry news and analysis to understand what they’re getting into. And no customer should make a major purchase without undertaking such efforts.

The model discusses four dimensions driving enterprise software pricing:

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July 13th, 2009

Evaluating the enterprise software buyer's 'Bill of Rights'

Posted by Michael Krigsman @ 4:43 am

Categories: CIO issues, Devil's Triangle, IT issues, Research and statistics, Vendor relationships

Tags: Bill, Vendor, Customer, Life Cycle Horizon, Tools & Techniques, Enterprise Software, Management, Software, Michael Krigsman

Complicated relationships between enterprise software buyers and vendors contribute to late, over-budget, or otherwise painful IT projects. To help customers bring greater transparency to their relationship with software vendors, Forrester Research analyst, Ray Wang, has developed a detailed framework covering the ownership life cycle.

A document called An Enterprise Software Licensee’s Bill Of Rights, V2 describes this framework. Although the bill of rights does an excellent job explicitly highlighting issues that can become points of contention between software buyers and vendors, it does not address customer roles and responsibilities in achieving project success. This gap is significant, as I discuss below.

Software Ownership Life Cycle. The report defines a software ownership life cycle and provides a checklist of issues keyed to different life cycle phases.

The life cycle horizon extends out over a decade, accurately reflecting the long time spans over which some enterprise software contracts extend. One of its most valuable features is raising concerns about intangible considerations that don’t come into play until years after a large software contract is signed.

This graphic shows the life cycle:

Bill of Rights checklist. The bill of rights guides customers to raise key points when negotiating with vendors. The next diagram organizes this checklist by life cycle phase. The first step, general rules of engagement, outlines overall expectations of vendor conduct across the entire term of the software business relationship.

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June 15th, 2009

Pentagon kills $6.3 billion missile technology project

Posted by Michael Krigsman @ 6:06 pm

Categories: CIO issues, Governance, Government projects, Project failures, Vendor relationships

Tags: Northrop Grumman Corp., Pentagon, Government, Supply Chain, Vertical Industries, Business Operations, Michael Krigsman

The Pentagon canceled Northrop Grumman’s Kinetic Energy Interceptor program amid accusations by Defense Secretary, Robert Gates, that the system’s design would not accomplish key military objectives.

It’s not an IT failure, per se, but certainly a great example of poor fit-to-purpose between technology and business requirements, leading to project abandonment and failure. Northrop Grumman had completed approximately $1.2 billion of work at the time of cancellation.

The Pentagon said it terminated the project for the “convenience of the government” and not because of problems with Northrop.

Northrop Grumman describes the system:

KEI is the Ballistic Missile Defense System (BMDS) element that is being designed to destroy enemy ballistic missiles during their boost and early midcourse phases of flight. It is also the first ballistic missile defense weapon system to be developed without the constraints of the Anti-Ballistic Missile Treaty.

Reuters said Gates stopped the program because:

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