If you could give all of your employees any information they need any time they need it, you could transform your business and change the rules on your competition. You could:
- Maximize revenue at every customer contact
- Achieve unprecedented business efficiency
- Deliver products and services, so innovative, your competition couldn't touch them
- Enjoy the miracle of triple profits
It's Difficult Even Making a Profit
In the business world, however, that has been just a dream. It's almost a miracle how companies even make a profit. When information, the very lifeblood of business, is held captive, hogtied and strangled by the process we count on to deliver it, or own information technology (IT) process.
Because Information is so costly and Risky
Would it surprise you to know, just keepiang your old legacy software working devours 80% of your IT budget? Of course, I don't know your numbers. But, according to the Gartner Group, that's our national average.
And would it surprise you to know, according to the Standish Group, who's tracked this for over 20 years, through 40,000 projects, when we try to create new software, we fail two out of three times? Actually, two failures out of every three attempts was our best year, 2003. All others were worse, some much worse.
Failure is so Financially Devastating
Over the past 40 years, I have seen hundreds of failures. Some of the colossal ones, you may even enjoy reading about:
- Ford Motor Company has a messy patchwork of purchasing systems that just limp along, doing a poor job, and costing millions every year just to keep working. So, they decided to replace'em all with a single new solution. They began development in 2000 and cancelled six years later, over budget by $200 million.
- Giant British food retailer J Sainsbury. With visions of merchandise deliveries orchestrated with precise timing, they invested in a new supply chain management system. Timing was anything but precise. In October 2005, with merchandise stuck in warehouses and market share slipping, they cancelled the whole thing, wrote off $526 million, and hired 3000 clerks to stock shelves manually.
- This is a classic; do you remember the FoxMeyer Drug Company? They bought ERP software from the number one vendor, SAP. They configured it and put it in production with high expectations. That move led to the collapse of the entire company. In December 1995, FoxMeyer was a $5 billion-a-year company. It was later sold for a mere $80 million.
I hope you feel better that your not the only one with information issues. Everybody has them. They are frustrating and, even worse, financially devastating.
Even Successful Projects Miss the Mark
Our friends at the Standish Group further report; of the new software projects that actually make it into production:
- 82% took longer than planned.
- 43% cost more than budgeted.
You might be thinking, "Ok, so it cost more than expected and takes longer than planned. I'm kind of used to that. At least I have the solution." Not exactly. Of the list of software features and functions deemed "required", only about half make it into the final solution. Half! Now that is a back breaker.
It's Always Been That Way With No Improvement Expected
And there's no help coming from new technology. Java, .net, XML and forty years of other buzzwords haven't made a twit of difference. We still fail two out of three times in our best year.
It's Just Nuts. Our Process is Broken
Would you agree this is nuts, something is seriously wrong?
- Software quality so bad; it devours 80% of our IT budget just to keep it running.
- Replacement so costly and risky we don't even want to think about it.
Whether we like it or not, the information age puts us all in the information manufacturing business but our manufacturing process is broken.
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