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 27th, 2009

CRM failure: An ounce of prevention

Posted by Michael Krigsman @ 6:28 am

Categories: CIO issues, CRM, Devil's Triangle, Enterprise 2.0, IT issues, Implementation, Project failures, Project strategy

Tags: CRM, Advertising & Promotion, Customer Relationship Management (CRM), Enterprise Software, Marketing, Software, Michael Krigsman

This week I spoke at the CRM Evolution 2009 conference held in New York City. It’s a premier event in the CRM world, bringing together buyers, practitioners, vendors, analysts, and journalists.

My presentation explains underlying reasons why CRM projects do not achieve expected results and describes how to overcome these problems. I spoke at length about harnessing the “wisdom of crowds,” or collective intelligence, to improve software implementations.

Finally, the presentation explores risks inherent in the new world of Enterprise 2.0 and Social CRM.

Take a look and let me know what you think!

April 27th, 2009

SAP Americas' president, Rob Enslin, on avoiding IT failure [podcast]

Posted by Michael Krigsman @ 7:27 am

Categories: CIO issues, Devil's Triangle, Governance, IT issues, Implementation, Interview, Podcast, Project strategy, Project success, SAP, Uncategorized

Tags: Project, Podcast, Information Technology, Customer, SAP AG, Strategy, Management, Michael Krigsman

As one of the largest enterprise vendors, SAP holds a unique position to influence the outcome of software implementations around the globe. To understand SAP’s significance in global IT projects, look no further than a statistic tossed out earlier this year by Executive Board member Jim Hagemann Snabe: “Seventy percent of world financial transactions touch an SAP system and sixty-five percent of world chocolate is produced with SAP systems.”

Given this, I welcomed SAP’s invitation to this discuss the important IT success and failures topic with Rob Enslin, president of SAP Americas. Rob is responsible for all of SAP’s operating activities in this region and has worked at SAP for 16 years. His background includes senior positions in consulting, finance, and account management.

Our conversation covered a range of issues including the IT Devil’s Triangle, why projects fail, and how organizations can run successful implementations. Although I’ve summarized key points below, to really understand Rob’s views, I strongly urge you to listen to the podcast. To hear it, simply click the player at the top of this post.

Please offer advice to help customers successfully navigate IT Devil’s Triangle relationships?

It’s important to get the personal goals and agendas of each participating organization quickly out of the way, to focus everyone on defining success for the customer. Document the specific role of each participant, determine how decisions will be made, and document who will be responsible for making them. The project steering committee should include executives with P&L responsibility from the participating organizations. These steps will focus the participants to make operational decisions based on achieving customer success.

How can customers ensure that system integrators work for the project’s benefit?

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March 18th, 2009

IDC: Escaping failure in the cloud

Posted by Michael Krigsman @ 8:59 am

Categories: CIO issues, IT issues, Implementation, Research and statistics, SaaS, PaaS, and SOA

Tags: Software, Failure, International Data Corp., Tools & Techniques, Cloud Computing, Management, Michael Krigsman

At yesterday’s Directions09 conference in Boston, IDC’s Chief Analyst, Frank Gens, described the benefits of cloud computing. His remarks included one point that is directly relevant to IT failures.

As you see in the slide, potential cloud buyers are interested in faster, easier software deployments:

This key point gives us a clear indication about market sentiment in relation to IT implementation failures.

THE PROJECT FAILURES ANALYSIS

In a sense, project failures are implementation failures. Once software is up and running at the go-live point, we might say the project is successful. From that standpoint, this IDC research confirms that potential cloud buyers want to escape the stranglehold of long, expensive implementations.

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February 25th, 2009

San Diego fires Axon over ERP implementation problems

Posted by Michael Krigsman @ 10:58 am

Categories: CIO issues, Consulting, Devil's Triangle, Government projects, IT issues, Implementation, Oracle, Politics, Project failures, SAP, Uncategorized, Vendor relationships

Tags: San Diego, SAP AG, ERP, Axon, System Integrator, Tools & Techniques, Project Management, Workforce Management, Advertising & Promotion, Outsourcing

The city of San Diego, CA terminated its software implementation contract with services provider, Axon, citing “systematically deficient project management practices.” The project is running $11 million (27 percent) over-budget to date, a number which will likely increase.

San Diego’s termination memo highlights key Axon governance and implementation process deficiencies. Tom Fleming, president of San Diego Data Processing Corporation (DPC), a municipal IT contracting agency, wrote the document:

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February 3rd, 2009

A tale of consulting arrogance

Posted by Michael Krigsman @ 6:40 am

Categories: CIO issues, Consulting, Devil's Triangle, IT issues, Implementation

Tags: Consultant, Healthcare, Enterprise Software, Software, Michael Krigsman

The role of third-party consultants on IT projects is tricky. On one hand, they bring valuable expertise and specialized knowledge that many organizations can’t afford to hire as full-time employees. At the same time, some consultants are disruptive, following their own agenda instead of doing what’s right for the client.

Look at this story from a blog in which someone chronicles his company’s ongoing enterprise software implementation:

At the beginning, we were quoted a set number of days consultancy work to do the implementation (370). In fact we are now well over 800 days, there are another 65 booked for the next 10 weeks, plus, it seems clear that we are still no closer to go-live than we were 5/6 months ago and we will need yet more people. In addition, during the work over the last 2 years, they keep insisting that certain things were not part of the “original blueprint” and that these items are part of a “second phase” of work. Well we certainly never agreed to any such “second phase”. I was told by the project manager quite confidently that we should expect to budget for at least another 70 - 100 days of consultancy work each year for the next 5 years.

Now, read the anonymous author’s tale of his consultants’ arrogant attitude:

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January 29th, 2009

6 hard-hitting tips to navigate ERP minefields

Posted by Michael Krigsman @ 1:31 pm

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

Tags: Partnership, ERP, Buyer, PROJECT FAILURES ANALYSIS Dennis, Business Structures, Enterprise Resource Planning (ERP), Enterprise Software, Finance, Software, Michael Krigsman

Fellow ZDNet blogger, Dennis Howlett, an accountant by profession and enterprise software stalwart if ever there was one, has turned his attention full-bore to IT failures.

In a post on the subject of failure, Dennis presents six important ideas to help technology buyers navigate the enterprise software minefield:

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November 18th, 2008

Texas gov. intercedes in failing IBM project

Posted by Michael Krigsman @ 7:19 am

Categories: CIO issues, Cultural issues, Devil's Triangle, Financial impact, Government projects, IT issues, Implementation, Politics, Project failures, Project strategy, Vendor relationships

Tags: Texas, IBM Corp., Advertising & Promotion, Marketing, Michael Krigsman, Agency, State, Backups, Outsourcing, It Operations

Texas Governor, Rick Perry, ordered state agencies to stop transferring data to IBM to prevent data loss on a failing project. Texas also fined IBM $900,000 for failing to meet data backup requirements specified in the state’s $863M outsourcing contract.

This backup situation represents only tip of the iceberg with lots more failure to come. Be forewarned: as they say, “You ain’t seen nothin’ yet.”

The Dallas Morning News reported:

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October 28th, 2008

Overstock.com accepts blame for ERP problems

Posted by Michael Krigsman @ 7:50 am

Categories: CIO issues, Financial impact, IT issues, Implementation, Oracle, Project failures

Tags: ERP, Overstock.com Inc., Enterprise Resource Planning (ERP), Retail, Enterprise Software, Software, Michael Krigsman, Financial, Financial Accounting, Finance

Online retailer, Overstock.com announced it will restate earnings, saying “fallout” from problems with a 2005 Oracle ERP implementation caused the problems.

In a letter to investors, CEO Patrick M. Byrne said:

Our 1st Commandment is “Maintain a bullet proof balance sheet,” But while the spirit is strong, the flesh made a mistake. The short version is: when we upgraded our system, we didn’t hook up some of the accounting wiring; however, we thought we had manual fixes in place. We’ve since found that these manual fixes missed a few of the unhooked wires.

Byrne added:

It also turned out there were errors cutting both ways which partially obscured the problem because we relied on reasonability testing to verify certain balances rather than a ground-up reconciliation. Now that we have found these errors, we have called a penalty on ourselves. The total effect of the errors over the five and a half year period (during which we generated nearly $3.5 billion in revenues) is a reduction in revenue of $12.9 million and a $10.3 million increase to cumulative net loss.

Overstock’s Senior Vice President of Finance, David K. Chidester, added more detail:

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October 20th, 2008

14 hidden enterprise software costs

Posted by Michael Krigsman @ 6:36 am

Categories: CIO issues, Documentation, Financial impact, IT issues, Implementation, Project strategy, Training, Vendor relationships

Tags: Project, Enterprise Software, Training, Over-budget IT Project, Workforce Management, Training And Certification, Human Resources, Michael Krigsman

Over-budget IT projects are common because inexperienced planners fail to account for unexpected downstream costs. By considering only explicit expenditures defined in contracts, these poor suckers make themselves sitting ducks for failure.

Non-obvious conditions often drive cost on large IT projects. Some of these conditions are beyond anyone’s control — for example, sudden changes in the economic environment can affect a company’s willingness to continue an ongoing project.

However, many project costs are reasonably predictable, even if they don’t explicitly appear on contracts when the project is started. ROI blogger, Rob Tyrie, describes 14 of these hidden, or indirect, costs:

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