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Why New Systems Fail: Revised Edition: An Insider’s Guide to Successful IT Projects

Book Description

What does a Fortune 500 company implementing a multimillion dollar "off the shelf" system have in common with a 150 person firm building its own system? In each case, the organization failed to activate and utilize its system as initially conceived by senior management. These two organizations are hardly alone. On the contrary, more than three in five new systems fail. Many miss their deadlines. Others exceed their initial budgets, often by ghastly amounts. Even systems activated on time and under budget often fail to produce their expected results and almost immediately experience major problems. While these prospects are grim, there is at least some good news: This doesn't have to be the case. Organizations simply need the necessary framework to minimize the chance of system failure at three key points: before, during, and after system implementations. Why New Systems Fail provides such a framework with specific tools, tips, and questions from the perspective of a seasoned, independent consultant with more than a decade of related experience. The book examines in great detail the root causes of system failures. Case studies, examples, and lessons from actual system implementations are presented in an informative, straightforward, and very readable manner. More than a theoretical or technical text, the book offers pragmatic advice for organizations both deploying new systems and maintaining existing ones.

Table of Contents

  1. Copyright
  2. Foreword
  3. Acknowledgments
  4. About the Author
  5. List of Figures
  6. List of Tables
  7. Preface
  8. 1. Introduction
    1. Book Layout
    2. Fantasy World: The Theoretical System Implementation
    3. The Anatomy of a Typical System Failure
    4. The Four Major Types of System Failures
      1. The Unmitigated Disaster
      2. The Big Failure
      3. The Mild Failure
      4. The Forthcoming Failure
    5. Consequences of a Typical System Failure
    6. The Expectations Gap
    7. Risks for Mature Organizations
    8. A Balanced Approach: Theory, Case Studies, and Examples
    9. Who Should Read This Book?
    10. Topics
    11. Avoiding Death Marches
    12. So, Why Do New Systems Fail?
    13. Summary
    14. Endnotes
  9. I. Deciding to Take the Plunge
    1. 2. Why Organizations Maintain Legacy Systems
      1. The Technology Adoption Life Cycle
      2. Legacy Systems
      3. Eight Reasons That Organizations Maintain Legacy Systems
        1. Living in Oblivion
        2. If It Ain’t Broke, Don’t Fix It
        3. The Cost of Action
        4. All Functions Are Not Created Equal
        5. Fear of the Unknown
        6. Fear of the Known: Horror Stories and Risk Aversion
        7. Insufficient Time and People
        8. Change Agents and Executive Turnover
      4. Summary
      5. Endnotes
    2. 3. Why Organizations Implement New Systems
      1. The Costs of Inertia
      2. Accounting Advantages/Capitalization
      3. Organizational Growth
      4. Acquisition
      5. Business Imperative
      6. Desire for Consolidation and Simplicity
      7. Cost-Effectiveness
      8. System Envy
      9. Vendor Dissatisfaction
      10. Summary
      11. Endnotes
    3. 4. The Replacement System
      1. Replacement Options
        1. Option 1. Internal Development and Ownership
        2. Option 2. Contracting an ISV
        3. Option 3. One Vendor
        4. Option 4. Multiple Vendors and the Best of Breed Approach
        5. Option 5. SaaS
        6. Option 6. OSS
      2. Considerations
        1. Size of Organization
        2. Number of Expected Annual Transactions
        3. Budget
        4. Control
        5. Timeline
        6. Security Concerns
      3. Summary
      4. Endnotes
  10. II. System Selection
    1. 5. The Sounds of Salesmen
      1. Disclaimer
      2. Tools of the Trade
        1. Add-Ons
        2. E-Mail Notification
        3. Database Triggers and Notifications
        4. Improved Reporting Solutions
        5. Form Design Tools
      3. Software Tiers and Costs
        1. Finding the Right Tier
        2. A Useful Analogy
      4. A Note on SaaS and Tiers
      5. System Convergence and the Software Industry
      6. Type of Industry: Does It Matter?
      7. Should an Organization Rent or Buy?
      8. Contract Language and Distant Early Warnings
      9. A Pound of Salt
      10. A Note on Fields
      11. Summary
      12. Endnotes
    2. 6. Business Processes
      1. The Chicken and Egg Question
      2. The Symbiotic Relationship Between Business Processes and Systems
        1. A Broken Annual Process
        2. A Broken Process
        3. A Suboptimal Process
      3. The Limits of Reengineering
      4. Summary
      5. Endnotes
    3. 7. Support for the New System
      1. Types of Support
        1. Support from the Vendor
        2. Support from a Vendor-Sanctioned Partner
        3. Support from a Third Party
        4. Informal Support Mechanisms
      2. Vendor Agreements
      3. Recent Vendor Tactics
      4. Summary
      5. Endnotes
    4. 8. Selecting Consultants
      1. Pre-System Selection
      2. Implementation Consulting
      3. Type of Consulting Engagements: Fixed Bid Versus Time and Materials
      4. Two Warnings
        1. Consultant Temperament: Be Aware of the Path of Least Resistance
        2. Cost: Be Aware of the Lowest Number
        3. Which Type of Contract Is Best?
      5. Types of Consulting Arrangements
        1. Traditional Consulting
        2. Milestone Consulting
        3. Multiple Consulting Partners
        4. Rapid Deployment
        5. Creative Arrangements
        6. Which Is Best?
      6. Types of SIs
        1. The Software Vendor
        2. Large Firms
        3. Boutique Firms
        4. Independent Consultants
        5. Which Type of SI Is Best?
      7. Client Questions
      8. Questions for the SI
      9. Summary
  11. III. The System Implementation
    1. 9. Implementation Strategies and Phases
      1. Implementation Strategies
        1. The Full-Blown Implementation
        2. The Staggered or Phased Implementation
          1. Phased Approach, Version 1
          2. Phased Approach, Version 2
          3. Phased Approach, Version 2a
          4. Which Strategy Is Best?
      2. Implementation Phases
        1. Project Planning
          1. Phase Objectives
          2. How Long Should Project Planning Take?
        2. Application Exploration
          1. Phase Objectives
          2. How Long Should AE Take?
        3. System Design
        4. Customizations
          1. Cautionary Tales
          2. Security Design
          3. Phase Objectives
          4. How Long Should System Design Take?
        5. System Testing
          1. Phase Objectives
          2. How Long Should System Testing Take?
        6. System Activation/“Go-Live”
          1. Phase Objectives
          2. How Long Should System Activation Take?
      3. Costanza Medical Case Study: A Flexible Client and a True Consulting Partner
        1. Background
        2. A Potential Showstopper
        3. Outcomes and Lessons
      4. Summary
      5. Endnotes
    2. 10. The Group Responsibility Matrix
      1. A Guide, Not Gospel
      2. Communication
      3. Involvement, Collaboration, and Backup
      4. Potential Red Flags
      5. Clarifying Roles and Contract Language
      6. Summary
    3. 11. Setup Issues
      1. Portnoy Case Study: A Square Peg and a Round Hole
        1. Background
        2. Implementation Issues
        3. People Issues
        4. Outcomes and Lessons
      2. Lifeson Case Study: Replicating the Old in the New
        1. Background
        2. Implementation Issues
        3. A Campaign of Misinformation Leads to Successful Internal Sabotage
        4. Outcomes and Lessons
      3. Comparison of the Two Case Studies
      4. Death by Architecture
      5. Summary
      6. Endnotes
    4. 12. Testing Issues
      1. Data Issues: Snakes in the Woodwork
        1. Getting at the Legacy Data
        2. Assessing the Quality of the Legacy Data
        3. Mapping the Legacy Data: Bridging Old to New
        4. Loading and Testing Legacy Data: The Inevitability of Errors
        5. Manually Entering Legacy Data: The Final Option
      2. Security Issues
      3. Software Issues
        1. Advice for Logging a Call to Support
        2. The Challenge of Replication
      4. Summary
      5. Endnotes
    5. 13. People Issues, Roles, and Responsibilities
      1. Project Managers
        1. Is a Consultant Project Manager Truly Necessary?
        2. Multiple Project Managers
        3. Problem Project Managers
          1. The Yes-Man
          2. The Micromanager
          3. The Procrastinator
          4. The Know-It-All
          5. The Pollyanna
          6. The Pessimist
      2. External Consultants
      3. My Simple View of the World: Four Types of End Users
        1. Willing and Able (WAA)
        2. Willing but Not Able (WBNA)
        3. Able but Not Willing (ABNW)
        4. Neither Willing Nor Able (NWNA)
      4. Client Responsibilities
      5. Sufficient Human Capital
        1. Dealing with Problem Clients
        2. Carrots
        3. Sticks
        4. Outright Removal
      6. Training
        1. Types of Classes: Public Versus Private
        2. Purpose
        3. Timing
        4. Specific Classes
      7. Elton Case Study: The Stubborn Client
        1. Background
        2. Implementation Challenges and a Largely Unwilling Staff
        3. Outcomes and Lessons
      8. The Practice Mentality
        1. Lacking a Sense of Urgency
        2. Pretending That Tomorrow Will Never Come
        3. Assuming That Others Will Bail Them Out
        4. Ignoring Warning Signs
      9. Summary
    6. 14. Reports and Interfaces
      1. Reporting Challenges
        1. Traditional Organizational Roles
        2. Different Systems Represent Data in Different Ways
        3. Time Constraints
        4. The Functional-Technical Disconnect
        5. Insufficient, Incomplete, or Inaccurate Reporting Specifications
        6. Overreliance on Custom Reports
        7. Inefficient Reports
        8. Managing End-User Expectations
      2. Entity Relationship Diagrams
      3. Interface Issues
        1. Interface Tools for Clients
        2. Issues and Limitations
      4. Summary
    7. 15. Documentation Issues
      1. Types of Required Documentation
        1. Delays from Previous Phases and the Need to Catch Up
        2. Just Do It: Wishful Thinking and the Limitations of Multitasking
      2. Wilson Case Study: Good Design but Lack of Resources
        1. Background
        2. Impetus for Change
        3. Implementation Challenges
        4. Inadequate Staffing and Acceptance of the New System
        5. Data Challenges
        6. An Unresponsive Senior Management
        7. An Overreliance on Consultants Due to Inadequate Internal Staffing
        8. The Go-Live Decision
        9. Outcomes and Lessons
      3. Julian Case Study: Building Its Own System
        1. Background
        2. Data and Business Process Issues
        3. Reporting Issues
        4. Lack of Documentation and Knowledge Transfer
        5. Outcomes and Lessons
      4. Summary
  12. IV. The Brave New World of Post-Production Life
    1. 16. Ongoing System Maintenance
      1. Reporting and Interface Issues Revisited
      2. Database Views
      3. Data Areas
      4. Upgrades
      5. Customizations Revisited
      6. Patches
      7. Backup and Disaster Recovery
      8. Summary
      9. Endnotes
    2. 17. Operational Changes and Risks
      1. Key Employee Movement
        1. Internal Movement
        2. External Movement
        3. External Labor Market
      2. Change in Major Business Process
      3. Enterprise Risk Management
      4. Acquisitions
        1. Complete Integration
        2. Partial Integration
        3. Zero Integration
      5. Decommissioned Applications
      6. Errors and the Dangers of Automation
      7. Merger and Acquisition Activity
      8. Vendor Divorce
      9. Summary
      10. Endnotes
  13. V. Maximizing the Chance of Success
    1. 18. Mid-Implementation Corrective Mechanisms
      1. Introduction
      2. Mid-Implementation Audits
      3. Adding Resources
      4. Replacing Individual Consultants
      5. Replacing the SI’s Project Manager
      6. “Losing” the Project Manager Altogether
      7. Changing SIs
      8. Sunk Costs and Avoiding the Point of No Return
      9. Moving Noncritical Items to Phase II
        1. What Type of Project Is It?
        2. Are Executives’ Incentives Aligned with Those of the Organization?
        3. What Are the Risks and Rewards of Keeping Nonessential Functionality?
      10. Killing the Project
      11. Petrucci Case Study: Trying to Boil the Ocean
        1. Background
        2. Implementation Issues
        3. A Vicious Cycle of Retesting and the Devil’s Triangle
        4. Systematic Chaos
        5. Misplaced Concerns
        6. Outcomes and Lessons
      12. Summary
      13. Endnotes
    2. 19. Audits
      1. The Need for an Organizational Readiness Assessment
        1. Data Readiness
        2. Business Practice Variation Within the Organization
        3. People and Organizational Readiness
        4. System Readiness
        5. Documentation
        6. Political Obstacles
      2. Mid-Implementation
      3. The Postmortem: A Unique Opportunity to Learn
      4. Managing and Auditing Data
      5. Summary
    3. 20. Contingency Planning
      1. A Margin for Error
        1. Challenges, Realities, and Aligning Interests
      2. A Contingency Fund
      3. Probabilities
      4. Summary
    4. 21. Employee- and Consultant-Based Strategies
      1. Finding and Retaining Hybrids
        1. Consultants
        2. Employees
          1. Applicant Questions
          2. Behavioral-Based Interviews
      2. Using Employee Retention Bonuses During an Implementation
      3. Preempting Key Employee Turnover
        1. Formal Training
        2. Compensation
        3. Strategic Input
      4. Immediately Removing or Redeploying Difficult Employees
      5. Emergency Triage: Send in “The Wolf”
      6. Summary
      7. Endnotes
    5. 22. Intelligent Expansion
      1. Types of Future Enhancements
        1. Enabling Additional Functionality Within a Module of an Existing System
        2. Enabling Entirely New Modules
        3. Integrating an Entirely Different System
      2. Tate Case Study: Building on a Poor Foundation
        1. Post-Go-Live Issues
        2. Misplaced Priorities and an Aversion to Change
        3. Outcomes and Lessons
      3. Summary
    6. 23. Conclusions and General Rules of Thumb
      1. Pre-Implementation
        1. Know Your Fields
        2. Consider All Alternatives
        3. Maximize Overlap of Client Constituencies from the Start
        4. Understand Trade-Offs in Advance
        5. Check the Engine and Tires Before Getting in the Car
        6. Don’t Reinvent the Wheel
        7. Keep It Simple, Stupid (KISS)
        8. Bigger Isn’t Necessarily Better
        9. Know Your Organization
        10. Take Vendor Promises with More Than a Grain of Salt
        11. Get Everything in Writing
        12. Find a Trusted Partner for Vendor Selection
        13. Don’t Skimp on Internal Staff
        14. Not All Consultants Are Created Equal
        15. Build In Buffers to Combat Potential Project Delays from the Onset
      2. Mid-Implementation
        1. Listen to Consultants and Allow Them to Freely Disagree
        2. Be Afraid: Data Conversion Is Almost Never Easy
        3. Allow Employees Sufficient Time to Play
        4. Replacing an SI Is Not an Elixir
        5. Consider Postponing Sites and Functionality
        6. Consider Euthanizing Lost Projects
      3. Post-Activation
        1. Expand Cautiously
        2. Audits Work
        3. Shore Up Documentation
        4. Employee Backup and Succession Planning
      4. Summary
      5. Endnotes
  14. Afterword
    1. The Arrival of Enterprise 2.0
    2. The Same Mistakes
    3. It’s the People, Not the Technology
  15. Bibliography
  16. Glossary of Commonly Used Terms