No year in the IT industry would be complete without a number of high-profile ERP (enterprise resource planning) project failures, ones that burn through mountains of cash, bring company operations to a standstill, generate bad publicity for vendors, and toss careers in the trash.
There's no one reason why ERP projects run off the rails. In fact, you can equate a typical project to a three-legged stool, with the customer, vendor, and systems integrator each serving as a leg.
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Customers have to plan well, budget enough money for training, and evolve their usual way of working. Vendors must deliver software that functions properly and matches up well with a customer's business processes. And implementation teams have to set the right expectations, meet project milestones, and avoid waste.
If one or more of these legs doesn't hold up, things can get ugly.
Michael Krigsman, president and CEO of Asuret, a consulting firm focused on helping companies improve the outcome of IT projects, prefers to use the more ominous metaphor of "the Devil's Triangle" to describe the dynamics in play.
And he sees no immediate end to troubled projects. "There is no magic bullet. The magic bullet is to change human nature, to make us wise and all-seeing," he said.
But Krigsman sees "bright lights on the horizon," such as the gradual emergence of cloud-based ERP, which can take the complexity out of upgrades for customers, as well as packaged services offerings, where the job gets a fixed price tag instead of being billed by the hour. In addition, such services are often based on well-established processes that have worked for many other customers, Krigsman said.
"Where the gotcha comes in is when you're working with a fixed-price agreement and you ask them to do something different," Krigsman added. Then the job might revert to a standard, by-the-hour billing arrangement that can ratchet up costs. "That's why the customer has to exercise a greater level of discipline," he said.
All vendors want their customers to be successful, but they can do more to improve project outcomes, according to Krigsman. One way would be to tie part of a salesperson's compensation to project success. This way, a salesperson won't be able to simply disappear after the ink dries, and moreover, they might be less inclined to upsell a customer on marginally beneficial extras that could make the project unwieldy.
Someday, the bright lights Krigsman sees in the distance could be shining broadly over the IT industry. In the meantime, we have the status quo, where one study found that nearly 70 percent of the time, project success is "improbable."
Here's a look at some of the top ERP project boondoggles, flameouts, and failures of the year -- and these are just the ones that entered public view.
New York's CityTime 'disaster'
CityTime, an effort by New York City to modernize its payroll system, is more of an ERP "project failure of the decade" and then some, as it dates to 1998. But in recent weeks allegations of massive corruption and waste regarding the project have come to a boil.
It was originally budgeted at around $60 million, but has since ballooned to a colossal $700 million-plus, the New York Daily News reported recently.
