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Links
to previous articles
at end of article
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I
have come to understand that many executives and business people do NOT
know how to recognize business information system project
failure. In fact, many people with partially failed solutions
actually think they are successful!
With most technology that we use in business we
expect and receive high levels of reliability and functionality
and high quality outcomes result from their application -- think
aircraft, motor cars, computers,
etc.
Accordingly this should be the criteria for rating the value and
success of business information system projects. Refer to the
discussion “Attributes of a HIGH VALUE solution
” for a discussion of what a
system at the top right of the scale below comprises. THIS is
the benchmark for failure and, in terms of that benchmark the vast
majority
of business systems implementations (all the way down the curve to
the bottom) are, at a significant level, failures. One
report suggests that "19 out of 20 ERP implementations do NOT deliver
what was
promised".
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This
is over and above the extreme failures discussed in the Failure Catalogue
.
So, HOW DO you recognize a failed business information system?
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1. Project aborted
The
project was aborted before go-live. Frequently because
the project should NOT have been undertaken in the first place e.g.
replace systems that do NOT need replacing.
OR the project was so badly conceived and managed that it had to end,
or there was a lack of executive involvement and the system is totally
misaligned with the core objectives of the business.
You might even have had a good project that was aborted for the wrong
reasons such as a new executive who could not be bothered to do the
hard work to evaluate the truth about the project.
Clearly this IS failure.
Sometimes such projects can be recovered.
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2. Catastrophic business damage
Catastrophic
business damage that causes massive disruption e.g. Bridgestone
– Tires stacked in the car park; BMW
-- months long wait
for spare parts, etc.
OR in the extreme case put the organization out of business – see for
example the FoxMeyer
Drugs Bankruptcy
Problem is, as with Fox Meyer, it seems hard to prove whether it was
the business system that caused the failure or something else.
Well, actually, NOT so.
Once you understand the true
causes of failure
, things like mythology,
lack of executive custody, lack of strategic alignment, lack of
precision configuration, failure to address the soft issues, lack of an
engineering approach (rigor, precision) and furthermore, understand
that technology is less than 3%, that’s right 3%, of
what causes failure, it becomes apparent that if a company puts in a
new system and goes bankrupt or gets into serious difficulty it is
almost certain that the existence of the systems project and all the
ancillary and associated factors WAS responsible for the failure.
A
systems project places HUGE stress on a business and this stress is
entirely people driven and impacts on people. There is a HUGE
need to understand the entire holistic picture of what is required to
prevent failure and what is required to achieve success, see the
section of the website on the
REAL Issues for more information.
Accordingly, I submit that unless there is a massive unrelated upheaval
in the market place, if a company goes bankrupt or close to bankrupt
shortly after putting in a new system then the new system has
failed. After all, a well-run project should produce an
outcome that IMPROVES profitability and competitiveness.
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3. Runs with kludges and lots of spreadsheets
(well, sort of)
The
above two items are relatively easy to recognize although
frequently masked by other factors. It IS clearly possible to
massively damage a business and in the extreme case cause it to wipe
out.
BUT other failures are less obvious.
Consider – the system runs, sort of, with any number of kludges
including unnecessary add-on software, quick and dirty Microsoft Access
and other software and MASSES OF SPREADSHEETS, other tasks are
performed semi-manually or entirely manually.
Tasks take unnecessarily long times or require extra staff, there is
gross inefficiency.
This is a form of failure that is common to the majority of business
information system implementations.
I
have come across massive installations where almost nothing is done in
the core system but management actually think that they have something
of value and the software company uses the client for advertising
purposes.
Are people lying?
Or are they just so dumbed down in terms of their expectations that
they actually think their hugely inefficient monster IS doing something
of value?
How honest are YOU being about YOUR system?
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4. Executives and managers cannot get the
information they need, WHEN they need it OR at all
Management
and executives cannot get the information they need WHEN
they need it OR at all.
Reports do NOT correlate.
Simple information requests take days or weeks to answer. And
then further time is required to drill down and / or the results are
questionable.
Overall executive and management efficiency and effectiveness is
compromised.
That is failure.
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5. The monthly board pack takes weeks to
produce and drill down is manual
The
monthly management and board packs take days or weeks to prepare
and require highly qualified and expensive staff to sit for days or
weeks every month preparing the pack in Excel or some fancy and costly
other tool and the final result is NOT entirely trusted.
Drill down is time consuming and questionable.
Executives are flying by the seat of their pants to a fair degree.
THAT is failure.
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6. The audit takes MUCH longer than it should
This
may seemingly be a small point but, in fact, it is a pointer to
much wider problems – the audit takes MUCH longer than your gut feel
says it should and you cannot establish why or how to curtail it,
because it REALLY does take that long and the auditors may even have to
take write-offs in order to fit your budget.
A
well running system should be quick and easy to audit.
A
system that takes long periods of time to audit is a system that is
inefficient to run generally, where there is little ownership of data,
where reports are unreliable and not trusted, etc.
This is a form of failure!
Remarkably the audit in most organizations could be shortened
dramatically coupled to a dramatic increase in management information
and management effectiveness. A system that is easy to use
and is well used is easy to audit, see the V3
case study
.
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7. The organization is fat and inefficient
This
point flows from the previous points – the organization is fat and
inefficient because “THE System” is fat and inefficient.
An inefficient business is frequently a pointer to an inefficient
system in the same way that a lean, effective and profitable business
is a pointer to an effective and efficient system – interesting that
there are lean, effective and profitable businesses running so-called
“legacy” or “obsolete” software and there are fat and inefficient
businesses running the latest and greatest systems.
An inefficient organization and associated system IS a form of failure!
Effective systems are the consequence of rigor and discipline, of
understanding of business and system fundamentals and applying systems
in ways that work effectively and add considerable value, even at the
most mundane levels. This applies to even the most elementary
principles such as all staff who use computers being taught to touch
type at 60 words per minute with 99% accuracy resulting in the data
being neat, clean, orderly, reliable and trusted. See the
article on “How
to recognize a high value business information solution
”.
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8. Your business system support bill is WAY
bigger than reasonable
Your
support bill to the implementers is WAY beyond what you consider
reasonable.
Or your IT support team is way bigger than seems reasonable.
BUT NO ONE can tell you what to do in order to curtail these costs
because the people REALLY are there and busy for that many days a month!
Badly designed, badly configured and badly implemented systems really
are huge consumers of expensive implementer and IT staff
manpower. This is primarily driven by “sloppy configuration”
as opposed to “precision
configuration
”
A
form of failure!
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9. The “old guard” say the old system was
better (and they are correct)
Many
of your “old guard” say that the old system was better, some have
resigned in frustration.
None of them have anything good to say about the system maintaining,
often with good cause, that the previous legacy system was easier and
leaner to use and gave the same or better results.
Fact of the matter is that the business grew and prospered with the OLD
system, something that techno-sales people and tech-lovers lose sight
of. In fact the OLD system helped the business to make the
profits that PAID for the new system!
Many modern system implementations are so poor that the old legacy
systems that truly were VERY basic but got the core job done WERE more
efficient and more effective because they were built in partnership
with the business to old fashioned rigorous software development
standards by dedicated and disciplined professionals, and were far
better aligned with the essence
of the business
.
This MAY be just unwarranted nostalgia in some organizations but, quite
frequently, the old system WAS more effective because there is a
massive overload of unnecessary functionality and gimmickry that weighs
down the new system. Process
obsession and other operational level micro-management at the
expense of the strategic
essence
of the
organization frequently drives this sort of overload.
This, again, can be an indication of failure.
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10. You just KNOW you have been ripped off
And
then there is that nagging feeling that you HAVE been ripped off,
that the huge sums you paid really are NOT justified, that the new
system IS massively inefficient, that you really DO struggle to get the
answers, that profitability has been detrimented, that the old system
was really NOT that bad after all.
And there is reluctance to talk about it because it reflects badly on
management, and you do NOT want the shareholders to know, and, after
all, it is fairly easy to keep it quiet because most people do NOT know
where to look to identify failure.
And most people’s expectations have been dumbed down by several decades
of mediocre outcomes that nobody believes the promises of the sales
people and even if you DID believe them you are NOT surprised when they
do NOT materialize, after all, why were you so foolish to believe them?
Could YOU undergo a comprehensive lie detector test about your system,
say NOTHING but good things about it and come through with a clean
score – NO LIES?
That is the acid test of a successful system, a system that has ALL
the attributes of a high value solution
, widely recognized by shareholders,
executives and management. A system that people speak highly
of, on AND OFF the record!
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Do YOU have a high value solution or, if you
are honest, is your system a failure? (or at least NOT a success)
If
you answered “yes” to one or more of the above points then get in touch
with me to arrange a diagnostic Pulse
Measurement
investigation to evaluate the health of
your system, diagnose what is wrong and prescribe the appropriate
treatment to remediate it – it MIGHT be easier than you think!
Yours faithfully,
Dr James
Robertson
James A Robertson and Associates Limited
Assisting clients to thrive through
effective and efficient application of Business Information Systems
eMail : James@James-A-Robertson-Associates.eu
Website : http://www.James-A-Robertson-Associates.eu
Linked In: http://uk.linkedin.com/in/DrJamesARobertsonERPDoctor
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Services I offer
James A Robertson and
Associates offer a range of services directed at enabling clients
to diagnose the causes of poor system value delivery and
take remedial measures to achieve increased levels of system effectiveness and efficiency and consequent
increase in value yield
This includes a range of in-house presentations on
topics such as "Why your ERP is NOT delivering and HOW to FIX it", "IT
in Strategic and Competitive Management", "The Critical Factors for IT
and ERP investment success" and "Lessons from the Bridgestone – IBM
case documents".
All of these can be delivered as one hour
presentations, half day executive briefings or full day master
classes. They can also be presented in standard format or
tailored to your organization through a series of executive interviews
I also offer short, sharp diagnostic interventions
to determine why your business system, department or project is NOT
delivering or is stalled, including easy to understand actionable
advice on how to turn the situation around
I will give you an independent evaluation of the
health of your existing systems and give guidance on whether they
REALLY need to be replaced or not and, in many cases, advise how to
greatly extend the life and sustainability of those systems
Please
click here to email me for more information
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Articles published so far in the article series
to which this email refers:
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Strategically Enriching your Business
Information Systems
Discussion
of practical specific measures that can be taken in order to
greatly improve the information yield of business information systems
at both the operational and executive strategic level. A
number of simple steps that can be taken immediately and more complex
measures that can be taken over time.
This thread is discussing increasing business system and data warehouse
value yield using techniques that lead to significantly improved
business intelligence capability, including support for the ability to
“obtain answers to questions we had not previously thought to
ask”. This builds on the content in the Strategic Essence and
Real Issues threads. Articles to date include:
1:
Introduction
2:
Principles of Data Engineering
3:
Steps in Applying these Recommendations
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Robust Business Information Systems Procurement
In
order to fully apply the methods and principles discussed in the
threads above with regard to new systems it is vital that a robust and
effective approach to procurement is applied. This requires a
tough procurement approach directed at achieving a tough business
outcome orientated project that ensures a high value outcome.
This thread discusses the components of such a procurement
approach. The individual documents and processes that make up
the approach are outlined. Thereafter the components are
discussed in more detail. Articles to date include:
1:
Introduction
2:
Bill of Services, Laboratory, Go-live Certificate, etc
3:
Executive Engagement, Bid Compliance, Adjudication and other matters
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Critical Lessons from Real Life Business
Information Systems Failures
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Important Principles in Assessing the Health of
your Business Information Systems
A
series of articles on important principles that you can use to better
understand the health of your business information systems and how to
improve their strategic and operational value yield to your
organization. Articles to date include:
1:
How do you recognize a HIGH VALUE Business Information System Solution?
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Information Available on the Website
Please
browse my website for more information
The home page, http://www.James-A-Robertson-and-Associates.eu
will give
you a good overview of what I am advocating and help you to navigate
the entire site.
The Table
of Contents
lists all the webpages on the site, there is a
lot of deep content that is NOT immediately visible.
The Article
Catalogue
contains well over 150 articles on diverse topics.
The Article
Keyword Cloud
provides alphabetic keywords linking to many
of the articles
The Conference
page
lists around 90 conference presentations, nearly
all different with around 40 of the presentations live on the site for
you to view and download -- email me if there is a presentation you
would like to view that is not on the site.
If you would like to know more about me there is detailed
information on the website and further detailed information
on LinkedIn
Visit the Testimonials
page to hear and read what clients and others
have to say about me
Visit the Failure
Catalogue to get a realistic perspective of the severity of
the problems with the business information systems implementation
industry. There is also a description of what I mean by the
word Failure
in this context
The page on The
Critical Human Foundation
will give you some idea of
the full diversity of the matters that I take into account in advising
my clients
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Please contact me for more information
I
look forward to discussing how I can assist you to unlock the FULL
value of your Business Information Systems investment, no matter which
software you have, how old it is or how dissatisfied you are with it
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