Top 10 Project Pitfalls You Can AvoidBy Baselinemag | Posted 2006-09-01 Email Print
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Learn from the past. We've compiled a list of the errors companies have made in their major information-technology projects, culled from more than 220 case studies Baseline has presented in the last five years.
No. 1: A project's scope is too monolithic and gargantuan.In 2001, McDonald's planned to spend $1 billion over five years to tie all of its operations into a real-time digital network. Eventually, executives in company headquarters would have been able to see how soda dispensers and frying machines in every store were performing, at any moment. But after just two years, the fast-food giant threw in the towel.
- See: McDonald's: McBusted
No. 2: Processes and technology aren't synched up.BearingPoint, the consulting firm and systems integrator, failed to report earnings for almost 18 months. What happened? A "perfect storm" of external events, internal missteps and bad timing wreaked havoc as BearingPoint tried to unify its financial reporting systems. The biggest disconnect, according to former BearingPoint CIO Thomas Wilde, was that the financial processes BearingPoint had employed in moving to a new system didn't align with the software.
- See: How BearingPoint Lost Its Way
No. 3: Poor data quality leads to increased costs.Companies without proper information management and control spend 10% or more of their operating revenue on fixing problems that stem from bad data, says Larry English, president of Information Impact, a consulting company that specializes in data quality. Data broker ChoicePoint, which was fooled into selling private information to Nigerian criminals last year, didn't know how many of the 17 billion records it stored had inaccuracies—or what it was costing.
- See: ChoicePoint: Blur
No. 4: A project is slowed down because it requires approval across multiple divisions.More than five years ago, Nestlé set out to standardize how it operates around the world with a single system to predict demand, purchase supplies, collect payments from customers and market its products. But getting more than 40 managers to buy into the global standardization project was no easy sell.
- See: Nestlé Pieces Together Its Global Supply Chain
No. 5: Managers don't take advantage of information systems to make quick business decisions.Toy maker Mattel had all of the business intelligence, market research software and human procedures in place to tell it that MGA Entertainment's Bratz dolls would threaten Barbie's dominance in the doll market. But Mattel didn't act quickly or aggressively enough to cut the pouty-lipped hip-hop dolls off at the knees.
- See: Mattel: How Barbie Lost Her Groove
No. 6: Poor design results in data-entry errors.A new prescription-ordering system at Cincinnati Children's Hospital gave a doctor ordering a mild pain reliever the choice to order the medication in pill or liquid form. The physician mistakenly hit "tablets" instead of "milliliters" when clicking off dosage options, ignored subsequent warnings to reconsider, and ended up prescribing 325 tablets of Tylenol to be administered to a child. The amount of Tylenol ordered was a potentially harmful dose, but was so out-of-bounds that a pharmacist easily caught the error.
- See: Cincinnati Children's Hospital: Shots in the Dark
No. 7: Aging, disparate systems can become impossible to keep fully integrated.As of Sept. 30, 2005, the U.S. Army claimed $1.5 million in overpayments to 1,300 soldiers killed or injured while fighting in Iraq and Afghanistan, according to a Government Accountability Office report. One problem: The Army lacks a single integrated pay and personnel system, instead relying on 30 legacy applications.
- See: The Army's Pay Misstep
No. 8: A system is rushed into production too quickly, resulting in duplication of effort and bugs.The FBI's half-billion-dollar Trilogy project, which was supposed to have given the agency a brand-new case management system, was more than $200 million over budget. "One of the things … that I think backfired on us was to push hard after 9/11 to get the technology on as fast as possible without fully understanding the detrimental side effects of pushing too hard," FBI Director Robert Mueller told a Senate Appropriations subcommittee this year.
- See: FBI: Cold Case Files
No. 9: Access rights to existing systems are undocumented.NASA's 80,000 workers are actually a minority of the computer users with an account on some space agency system. There are also the scientists who log in remotely from universities around the world, as well as corporations and foreign space agencies that partner with NASA on specific projects. Because the creation of these accounts wasn't tracked systematically, NASA last year was able to offer only a "best guess" at the total number of users: about 275,000.
- See: NASA Struggles to Fix Network Security Holes
No. 10: A system's interface is hard to use.After Bank of America required online customers to use a new log-in mechanism to thwart phishing, calls to the bank's service centers climbed by 25%. "The average consumer does not have a clue how the Internet works," Katherine Claypool, Bank of America's senior vice president of e-commerce customer support solutions, told attendees at a banking industry conference.
- See: Bank of America Seeks Anti-Fraud Anodyne