Top 10 Technology Disasters

Posted on : 30-04-2014 | By : jo.rose | In : Cyber Security

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Back in 2012 we wrote about Black Swans as related to IT projects (particularly those designated with the grand moniker of “Global”). The term was coined by the author and scholar Nassim Nicholas Taleb to:

“…describe high-impact events that are rare and unpredictable but in retrospect seem not so improbable.”

The report today on the events leading to the Co-operative Bank’s capital shortfall from Sir Christopher Kelly certainly makes for interesting, and cautionary reading.

Whilst much of the report delves into deficiencies in Governance, Risk, the Britannia Merger, relationship with the regulator, PPI mis-selling and the like, there is also a significant section dedicated to a botched IT Replatforming which, over a period of around 7 years, left a £300m write-off. Black Swan? Perhaps.

Either way, before the project was eventually canned the costs had ballooned to a potential £950m (£663m as re-scoped before the CBG Board eventually lost patience).

Kelly concluded with:

“It is critical for an organisation to understand the extent to which it is capable of managing large-scale change programmes. It is important to be realistic about the scale of projects undertaken, and the burden this places on the organisation. It is necessary to understand what good looks like, using best practices and experience from outside. It is essential to heed warnings and act upon them.”

The full report can be downloaded here, so you can make up your own view. Definitely recommended reading.

So, what about other IT Project disasters. Well, the landscape is littered with similar examples, but we’ve selected out Top 10 (that we can safely talk about…we think… ;-).

  1. Obamacare – one of the most recent. The website was a shambles when launched in October, with US citizens resorting to phone lines and post.
  2. The Child Support Agency (EDS) – costs said to have been in the region of £1bn for a system that managed to overpay almost 2 million people and underpay 700k, ultimately assisting in the demise of the CSA.
  3. Passport System 1999 (Siemens) – an insufficiently tested, resourced and with poorly trained staff left half a million Brits without passports and many missing holidays.
  4. FoxMeyer Corp – a bungled ERP system implementation in 1996 actually help take FoxMeyer into bankruptcy (with $1bn in lawsuits issued against SAP and Anderson Consulting).
  5. Sainsbury’s Warehouse Automation – installed in 2003 the barcode based fulfilment system was supposed to streamline its operations for pretty much the whole of London and the Southeast. However, it immediately ran into technical issues and was eventually scrapped (but after 4 years!…)
  6. US Airforce ERP (CSC) – now, imagine spending $1bn on an ERP system and getting nothing? Well, that’s the outcome of the project started in 1995 and hit with software, contractual and infrastructure issues throughout.
  7. NHS patient record system (CSC) – the abandoned IT system, originally estimated at £6.4bn, stands at somewhere around £10bn. Described as “the biggest IT failure ever seen”
  8. Hershey SAP – back in 1999 Hershey’s stock dropped 8% after problems implementing a combination of SAP ERP, Siebel CRM and supply chain software firm Manugistics caused it to miss key product delivery deadlines for Halloween.
  9. Canada’s Gun Registration System (EDS/SHL) – back in 1997 a relatively modest IT project at $199m started but by 2001 was running at $688m, including $300m for support (admittedly, not helped by political changes).
  10. RBS integration of Natwest – whilst we have concentrated on projects, the recent IT debacles and the fact that what was largely a systems led integration was described by the Harvard Business Review in 2003 with the line “…The acquisition is remarkable for how successful it was” means it had to make it in.