Wednesday, August 24, 2011

In This Issue

Outmoded project management practices are much more damaging that most people realize. Here is a 5M IT project failure that turned into a 200M writeoff for the company. Board members take notice.


Why Your IT Project May Be Riskier Than You Think

by Bent Flyvbjerg and Alexander Budzier, Harvard Business Review, Sep 2011
To top managers at Levi Strauss, revamping the information technology system seemed like a good idea. The company had come a long way since its founding in the 19th century by a German-born dry-goods salesman: In 2003 it was a global corporation, with operations in more than 110 countries. But its IT network was antiquated, a balkanized mix of incompatible country-specific computer systems. So executives decided to migrate to a single SAP system and hired a team of Deloitte consultants to lead the effort. The risks seemed small: The proposed budget was less than $5 million. But very quickly all hell broke loose. One major customer, Walmart, required that the system interface with its supply chain management system, creating additional hurdles. Insufficient procedures for financial reporting and internal controls nearly forced Levi Strauss to restate quarterly and annual results. During the switchover, it was unable to fill orders and had to close its three U.S. distribution centers for a week. In the second quarter of 2008, the company took a $192.5 million charge against earnings to compensate for the botched project—and its chief information officer, David Bergen, was forced to resign. Read more ...

1 comment:

Rich III said...

Jeff,

Do you have any recommendations for on site SCRUM training? Rally Software offers some training but it is pricey. $17,950 for two days of training for up to 20 folks. That is about $1200 per hour for two days.

Let me know.

Thank you.

Rich
rwatson@enterprisebank.com