Having previously discussed the Top 10 ways to guarantee failure in IS, I will now discuss where and how corporate companies have made their mistakes:
1. Company: AMR Corp., Budget Rent A Car Corp., Hilton Hotels., Marriott International Inc.
Project: “Confirm” reservation system for hotel and rental car bookings.
Failure: “Confirm” missed its project deadline by 2 years, having invested $125 in the development. AMR sued its three partners and Marriott later countersued. AMR was awarded a $109 million write-off.
2. Company:Snap-On Inc.
Project: Conversion of a new order-entry system designed by Baan Co.
Failure: After 3 years of design and implementation system was installed. $50 million was lost in sales in the first half following year, orders were delayed and stock was miscounted. Franchises became frustrated because they couldn’t operate the new system and turned to its competitors. Company profits sank by 22% in comparison to the previous year.
3. Company:Fox-Meyer Corp.
Project: SAP ERP System.
Failure: The installation of an Enterprise Resource Planning (ERP) system in 1996 drove this pharmaceutical company into bankruptcy.
4. Company:W.W.Grainger Inc.
Project:SAP ERP System.
Failure: Grainger spent $9 million on Systems Applications and Products (SAP) software and services in 1998. Enterprise Resource and Planning (ERP) system overcounted stock and had numerous crashes which led the company to loose $19 million in sales and $23 million in profits.
5. Company:Greyhound Lines Inc.
Project:“Trips” reservation and bus-dispatch system.
Failure: Greyhound spent $6 million in the 1990’s building “Trips”. Failed in 1993 when installed as Greyhound had offered sale prices on bus fares. To avoid having to use the system agents wrote bus tickets by hand, while queues of customers waited in line and missed mulitple buses. There was a $61.4 million loss in the first half of 1994.
It is clearly evident that each of these companies have experienced Failures in IS.