Skip Links

The scariest software project horror stories of 2012

Billions of dollars were wasted and tempers ran hot as multiple projects hit the skids this year

By Chris Kanaracus, IDG News Service
December 10, 2012 05:14 PM ET

IDG News Service - Sure, plenty of enterprise software projects go just fine and end up giving customers all the things vendors promise: lower operating costs, streamlined operations and happier users.

Unfortunately, some still end up in ruins, leaving customers out huge sums of money, churning up lawsuits, damaging careers and destroying relationships.

ROUNDUP: Worst security snafus of 2012

On the bright side, when examined these failures can reflect some important lessons for both vendors and customers to take to heart. Here's a look at some of 2012's scariest software project disasters.

U.S. Air Force pulls plug on ERP project after blowing through $1 billion

In November, reports emerged that the U.S. Air Force had decided to scrap a major ERP (enterprise resource planning) software project called the Expeditionary Combat Support System after it racked up US$1 billion in expenses but failed to create "any significant military capability."

ECSS was supposed to replace more than 200 legacy systems. The project dated to 2005 and used Oracle software, but its ballooning costs clearly suggest that Air Force officials and systems contractor CSC conducted an overwhelming amount of additional custom coding and integration work.

An Air Force spokesman said the project would require another $1.1 billion just to complete one-fourth of the original scope, and that wouldn't be complete until 2020.

Watchdog agency's report suggests ongoing U.S. military ERP projects are failures in motion

The U.S. Government Accountability Office released a report in March that found many ongoing ERP projects by the nation's military are drastically behind schedule and over budget.

One such project, the Marine Corps' Global Combat Support System, is projected to cost nearly 10 times its original budget and was supposed to be fully deployed in November 2009, according to the GAO. Its expected cost has reached $1.1 billion, up from an initial $126 million, the GAO said at the time.

Another ERP project at the Navy was begun in 2003 and planned for completion in fiscal 2011, but that schedule has slipped to August 2013, with costs expected to be $2.7 billion instead of $1.9 billion.

"It's so bad that maybe the government should give up the ghost on trying to do anything and simply accept that multibillion failures are a permanent part of the landscape," said analyst Michael Krigsman, CEO of consulting firm Asuret and an expert on IT project failures, in a recent interview.

"The big question is how does it happen?" Krigsman added. "Where are the controls? Why does it keep happening and when is it going to stop. Is government IT totally out of control?"

California courts throw huge software project on scrap heap

A project that was intended to modernize case management for California's court system was scrapped in March, despite the fact that officials deemed the software developed so far was viable. The problem? Not enough money to continue rolling out.

California spent more than $300 million to develop a number of versions of the case management system. However, it would require another $343 million to implement and support the system in 11 courts through fiscal year 2020-2021, according to an independent audit.

Some earlier versions of the system are in place at certain courts, but they aren't able to handle all case types.

In part, the decision to pull the project's plug can be attributed to the severe financial pressures California has faced in recent years. But even if it had been completed, the system may have become outdated quickly, according to a 2011 report by the state's auditor.

"We have a perfect storm of the right hand not talking to the left," Krigsman said. "A classic example of needless waste."

Manufacturer sues IBM over SAP project 'disaster'

Also in November, chemical products maker Avantor Performance Materials lodged a suit against IBM, alleging that Big Blue officials lied about the suitability of an SAP-based software package it sells in order to land Avantor as a client.

As it turned out, the Express Life Sciences Solution was "woefully unsuited" for Avantor and the ensuing software project took the company to a "near standstill," according to its lawsuit.

In fact, IBM workers told Avantor that the project was the worst they'd ever seen, Avantor alleges.

Other allegations have a familiar ring to them, having been cited by other plantiffs in various ERP lawsuits. One is that IBM allegedly staffed the project with "incompetent and reckless" workers who made scads of errors. IBM also cut corners in order to reach a go-live date sooner rather than later, a move that resulted in "disaster," according to Avantor.

In a statement, IBM called Avantor's complaints "exaggerated and misguided," and said it plans a vigorous defense.

Woodward's finances get dinged due to ERP problems

ERP projects are supposed to save companies money in the long run. But in some instances, they can hurt the bottom line.

In July, aerospace and energy system components manufacturer Woodward said its third-quarter profit and revenue had taken a significant hit partly due to "ERP system-related issues that have been addressed."

While analysts on average had predicted $0.60 per share and roughly $491 million in revenue, profit instead was $0.40 per share in the quarter and revenue totated $460 million, according to Woodward's announcement at the time.

The exact nature of the ERP system difficulties, as well as the brand of software being used, wasn't made clear.

"A lot of times it has to do with some type of change management issue, either that or poor testing," Krigsman said.

Companies may also have other underlying financial problems but instead decide to "point the finger at the ERP implementation because they figure it's not as bad," he added.

Our Commenting Policies
Latest News
rssRss Feed
View more Latest News