In 2004, Deloitte Consulting was awarded a $55 million contract to implement an SAP payroll system for the Los Angeles Unified School District. In January 2007, the system went live and immediately started experiencing problems. Some staff were overpaid while others appeared to disappear completely from payroll master files. Hardware would randomly shut down and software would lock users out for no apparent reason.
Lack of communication is one way projects fail.
Courtesy of dilbert.com
Due to the width and breadth of the problems, the school district began to point fingers at Deloitte blaming them for the failures. In response Deloitte began pointing them right back at the school district. It took over a year and an additional $40 million to iron out all of the bugs in the software and get the payroll running smoothly.
Various postmortems have attempted to pinpoint exactly where the project went wrong. Based on LA Times interviews with current and former officials, it appears be attributable to the following:
- Data Conversion – Legacy data was difficult to map, convert, and migrate.
- Dysfunctional Leadership – Executive sponsors were not actively engaged in the project
- Poor Training – At go live, at least 60 school clerks were not properly trained on the system.
Another spectacular project failure occurred in 2005 when Waste Management, Inc. attempted to implement SAP’s ERP system. The project was supposed to be 18 months, but actually never went live. Due to project failures, in 2008, Waste Management sued SAP for $1 billion in damages (which were eventually dropped down to $80 million through mediation.)
Postmortems on this project conclude that the following could have been more effective :
- Defined business requirements – In response to the lawsuits, SAP claimed that Waste Management did not provide timely business requirements.
- Employee Empowerment – The Waste Management employees assigned to the project were not empowered to make decisions.
Some projects don’t just fail, they fail spectacularly!
Although it is not mentioned anywhere, it would be interesting to determine what type of project management software supported both of these project implementations. Could some of the problems have been averted if the company was using online project management software?
At Bi101, we believe that if the projects had been supported by an online project management software like OpenAir, the following benefits would have been gained:
- Increase Client Involvement – Both Deloitte and SAP probably provided their customers with regular project updates, which is nice, but means the client was engaged for maybe one hour a week. But with online project management software, clients can gain access to detailed project status reports. This increases their engagement and helps them feel more involved in the project. SAP could have really used this on their Waste Management ERP project.
- Real Time Updates – Another nice feature of online status reports is that they are updated in real time. With real time updates, managers know immediately whether something is working or not. This could have been helpful on the LA Unified project to track whether all of the training had been performed.
Managers will be engaged, if we let them Courtesy of dilbert.com
Online project management software does not guarantee a perfect project. But it does provide a tool that can be used to reduce project risk by facilitating increased client engagement and consistent updates. If you would like to learn more about the power of OpenAir, please contact us.
[subscribe2]