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ECT News Community   »   CRM Buyer Talkback   »   Re: Failed Oracle ERP Project Leads to Legal Spat

Re: Failed Oracle ERP Project Leads to Legal Spat
Posted by: Erika Morphy 2011-07-27 09:00:33
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A legal dispute between Oracle and erstwhile client Montclair State University illustrates that despite the steady evolution of ERP technology and implementation methodologies, these projects can still turn ugly. The two have filed suits against each other over a failed project, called the "Bell Tower Initiative." Montclair has accused Oracle of violating the terms of its agreement to build a new Web portal for the school. It claims that Oracle's gross negligence resulted in project cost overruns of some $20 million.

Outsourcing is not a substitute for inhouse competence
Posted by: MargaretBartley 2011-07-27 09:35:34 In reply to: Erika Morphy
As a full-cycle developer with several decades of experience, I have seen this situation many times. Contracting agencies love naive customers. A company comes in with a low-ball bid on a complex project, knowing that never in the history of the planet has a client been able to completely and accurately spec out a project.

Then the contracting company charges through the nose for the inevitable change-orders.

It's an old game that is still going on.

What poorly-managed businesses still do not seem to get, after all these years, is that outsourcing is not a substitute for having technical competence in house.

Over the past twenty years, I have seen large businesses and governments lay off and fire their skilled IT staff, thinking they can be replaced by contractors.
But IT is more than just bits, bytes, and coding.
In many businesses, the IT staff is the repository of the business logic of the computer system.

In more than one company, I've asked managers how they verify that the data coming from the computer is accurate, and they shrug their shoulders - it's ITs responsibility. In large and medium-sized companies and agencies, it is very unusual, in fact, I would say I have never seen a situation where there was even one person not in the IT department who knew what every piece of data was supposed to represent, and how they all fit together.

And then the IT department gets laid off, the job is outsourced, and that institutional knowledge is lost. The contractors are desperately trying to understand how it all fits together. The documentation is out of date, or missing. A small piece of information, like "We need sub-categories of race, in addtion to the eight categories" discovered half-way through the development cycle can throw a monkey-wrench into the whole project.

I discovered early on, when I was developing an RFP for my own company, that I needed almost the same level of expertise to select and hire a consultant as I would need to do the work myself.

The supervising manager, when told that the project is past due, and over budget, needs to be able to assess if the problem is
a) the original scope and delivery schedule were unrealistic and need to be renegotiated or
b) the team doing the work is incompetent, and will never get it done right or
c) it really is just a little behind, and will come in as promised in the new schedule.
This requires a level of technical competence not usually found in the bureaucrats or budget analysts given these projects.

All companies with complex IT projects need to have at least one highly skilled employee who understands not only the business needs, but also understands the technology. Modern computer systems have a great many features built-in, that come with no extra charge. I've seen clients insist upon search procedures that have to be written from scratch, because the original specs were written by someone who did not know to take advantage of the free, built-in search features of the database they were using.

The contracting companies are well aware of these issues, and take advantage of the naive customers, who do not fully understand how to manage IT projects, or even how to competently use a computer system. I applaud the efforts to make these contracting companies accountable so that hopefully they will be more cautious in the future.

On the other hand, there really is no excuse for a company managing contracts worth millions of dollars to not provide a career path for its staff that produces competent managers with the necessary institutional knowledge and technical skills to manage those projects.
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