previous articles at the end of this
Bridgestone are suing IBM for $600 million following a
catastrophic systems implementation failure that did huge damage to the business
-- unable to process orders, stock piling up, losing customers, -- the
business information systems nightmare of every CEO.
This article examines the REAL reasons these things happen and
how to prevent them by analysing the key elements of the Bridgestone -- IBM
situation and explaining how to prevent them occurring in your project.
Issues discussed include the viability of old software,
valid governance for projects of this nature, the need for a tough and
robust procurement approach and resulting contract, the Business Process
myth and why the Business Process approach is dangerous, the need for
a rigorous "engineering" approach, the critical need for a Business
Simulation Laboratory, the benefits of tough certificates and the
non-negotiable need to provide a roll-back capability in the event of
It is concluded that both parties made mistakes, that the
mistakes are common place and, in reality, part of the established order and
that there is a need for a radically different approach -- this approach is
outlined in the article.
Bridgestone sues IBM for $600 million after suffering
massive damages -- tires stacked in the parking lot, hiring a third party warehouse
to store stock, unable to fulfil orders, lost customers --THE business
information systems nightmare of any CEO.
The system cost over $75 million and went
live in January, 2012. It immediately experienced "system-wide
failures" for three months, Bridgestone alleges:
"Tires which should have been
delivered to fill customer orders --piled up in distribution centres, smaller
warehouses, and trailers parked in parking lots. Ultimately,
[Bridgestone] was forced to lease an enormous amount [of] public
warehouse space at great expense."
The complaint also says:
"IBM's defective system lost or deleted
scheduled customer orders, would not process orders, duplicated, or
partially processed orders and, for those limited orders that were
processed, did not complete critical corresponding business
But IBM says the problems were caused by
Bridgestone. The company failed to do its part so that IBM could build
the system on time and on budget. IBM sent this statement to the
Google "Bridgestone sues IBM for $600 million" in quotes so you get an exact match -- 4,560 results!
This is big news.
It MIGHT be THE event that redefines the business information systems
in the way that dramatic construction engineering failures a century
earlier redefined the construction industry .
Why do these things happen?
is that failure is rife -- see my "Failure
Catalogue", failure that involves mainstream firms
like Bridgestone, BMW,
BBC, etc as clients and IBM,
, etc as service providers.
In fact the indications are that the failures are getting bigger, more frequent and more damaging.
is NO real indication that anyone has an answer to THE CRITICAL QUESTION
-- "how do we prevent our organization getting hit by such a
This article seeks to answer that question from a very
different point of view -- a point of view that I term "the
Before you ask what an engineer has to do with an industry that is the
preserve of accountants and MBA graduates I ask you to note that ALL
significant engineering structures are designed using computer based
systems that are far more complex than business information systems and
which are required to operate at exceptionally high levels of
reliability. Engineering MORE than accounting drove the creation
of high performance computers over the last fifty years.
article is a summary, the
full article is available on my website
and will also be emailed to you progressively in the days ahead.
Failure is rife
Fundamentally, failure has been rife for decades but the big
implementers and the NOT so big implementers continue to focus on
getting better and better at what they are doing seemingly oblivious to
the principle that "if you do what you have always done you will get what you have always got".
A DIFFERENT approach
This article seeks to present a DRASTICALLY different, and I contend,
BETTER way of looking at this sort of situation directed at enabling
you, as an executive of a company faced with the prospect of replacing
your systems, or sitting with a project that is failing or a system that
is under performing, to take DIFFERENT decisions to your counterparts
in Bridgestone, BMW, The BBC, etc.
I have been investigating failures and sub-optimal outcomes of business
information system projects since 1989, speaking about the reasons they
happen since 1992 and learned a large amount to the point where I am
now in a position to actively publish what I have learned after
undergoing an intense and lengthy process of discovery, inquiry,
analysis, practical application and refinement.
Following are the points that stand out for me about the Bridgestone situation:
1. COBOL -- NOT a valid reason
The project commenced with a fundamentally unsound, supposedly
technical, motivation -- existing systems were written in COBOL, COBOL
was "obsolete" and therefore needed to be replaced.
Firstly there are still a large number of organizations running COBOL,
secondly, as a programming language it is entirely possible to maintain
COBOL applications for the long term.
There was therefore NO technical need for Bridgestone to change, they
should ONLY have changed as part of a clearly thought through strategic
initiative to add value conceived and driven by the business.
more discussion on why OLD systems ARE viable and also
relating to COBOL please see the article "Old
Software IS Viable
", there is a piece
on COBOL lower down the page.
The balance of this article is based on the assumption that you DO have
a sound business case for moving to new technology and want to do this
with minimum risk and maximum value add.
2. Governance -- the BIGGEST single cause of failure
OK, so Bridgestone decided for good or bad reasons to change.
clearly a major governance problem, the CIO
was replaced SIX TIMES in two years during the
Inspecting the "Bridgestone
USA Executive Bios
" page we find that there is NO Chief Information Officer on the Executive team.
some digging on Google I
was unable to festablish who the CIO reported to but it seems clear
that the Chief Information Officer was NOT really a "Chief" -- effectively
just the IT Manager.
For a project as far reaching as the Bridgestone "Order to Cash"
project the CEO is the ONLY person in the organization who can take
custody of the project and the person managing the project should report
directly to the CEO with an executive mandate.
This is the ONLY way to make this sort of project work:
Make the CEO responsible -- see my material on "Executive
" for guidance;
Appoint a highly experienced expert to run the project
on behalf of the client and have that person report VERY
closely to the CEO in an Interim Executive capacity with
a VERY tough mandate to act on behalf of the CEO and a
strong contract for the duration of the project
-- see my article on "The
Art of Project Leadership
" for some suggestions;
c. and ... see the sections that follow.
3. Procurement --- securing a robust, tough and enforceable contract
Studying Bridgestone's complaint there was clearly a major deficiency in their procurement approach.
It is vital that a project such as theirs is initiated with a very
formal tender process against extremely detailed and very robust
documents prepared by the client team with assistance from a business
systems procurement expert and client legal advisors in order to create a
framework for a robust contract.
For procurement to lay a foundation for a successful project:
a. It is vital that the CEO has first appointed their tough interim
executive Project Leader / Project Director, someone with a large amount
of procurement experience;
b. It is also vital that the procurement takes place against a tough and comprehensive procurement pack;
c. with at least three to five bidders;
d. with a tough multi-stage adjudication procedure;
e. resulting in a tough contract.
the discussion of the requirements for such a procurement
approach on my website
Such a contract must lock the contractor into a fixed price for a clearly defined business outcome.
It must contractually bind provably competent contractor personnel individually to the project for the duration.
Please read the material
on my website
for more information.
4. The Business Process Myth -- irrelevant, distracting and DANGEROUS
major contributing factor:
The project name "Order to Cash" speaks volumes.
This was clearly a "Business Process" orientated project.
How do I know that?
Firstly the whole industry does it that way.
Secondly "Order to Cash" is a classic example of the nonsensical
gobbledegook that Business Process proponents use to describe things.
"Order to Cash" is a substitute for -- order processing, works
orders, warehousing, logistics, invoicing, credit control, ... or whatever
Bridgestone exactly DID commission.
Fundamentally a Business Process
centric approach to a project of this nature is a waste
of time and money -- see my article "Business
Process -- Irrelevant, Distracting and Dangerous
" to understand why I say this.
things that matter are the software functionality on a
module by module basis correlated to the business
-- business function by business function coupled with the
configuration of the system and particularly the
validation data and master classification lists, see my
Alternative to Business Process -- the RIGHT
" for a discussion
of the correct approach.
Fundamentally, what is required is:
a. Discovery of the strategic essence of the business -- why it exists and HOW it thrives;
b. High level functional definition of the components of the business;
c. Definition of the key functional elements from a strategic essence perspective;
d. Relate this to typical software modules available in the market place;
e. High level specification of system requirements on a module by module basis;
f. Tough procurement as discussed above;
g. Determine what capabilities are to be delivered with standard
software, what requires customization and what requires custom
development -- determined by strategic essence;
h. Detailed development of a comprehensive suite of representative configuration and master data;
i. Specify and build software as required;
k. Test, refine, test, finalize, accept;
l. Laboratory program as discussed below including management prescribe workflow (aka process);
m. Deploy and commission;
There is much on my website relating to this approach.
It is probable that IF Bridgestone had followed this approach there would have been MUCH less custom development.
This approach focuses attention in terms of deliverables on the
two things that ALWAYS remain at the end of the project, the software
and the configuration. The Business Simulation Laboratory,
described below, provides the mechanism to integrate this into the business
and ensure that people are fully trained -- the third component that
remains. The procurement approach should ensure that a rigorous
project method that enforces the above points is followed.
5. Absence of engineering rigor -- sloppy projects and sloppy solutions
It is clearly apparent from the Bridgestone pleadings that IBM ran
a sloppy project. I do NOT say IBM AND Bridgestone, I say IBM -- they
CLAIM to be the experts.
Bridgestone in their pleadings make it clear that they appointed IBM as
trusted advisors, as experts, as a leading brand in the field with a
high level of confidence and trust that IBM would do right by them.
IBM failed outright and even allowed Bridgestone to go live despite
acknowledging there were problems. There is a point at which a
responsible consultant stands firm and REFUSES to allow the client to go
live or, at the very least requires the CEO to sign a TOUGH indemnity
advocating a level of rigour, precision, accountability,
etc that is far beyond ANYTHING that occurs in the
business information systems industry, see my article on
Engineering Approach to Business Information Systems
" for a discussion of the
characteristics of this thing that I refer to as "The Engineering Approach" it is a
culture, a way of thinking, a way of doing that is unique to people who
have made it their life long goal to create things of lasting value from
nothing, these people are engineers and they know that without intense
rigour and discipline bridges do NOT stand up!
So, you need a Project Leader who understands these principles and you
need to find a contractor who understands them as well. And then
you need to apply them rigorously and conscientiously.
6. Lack of formal Business Simulation Laboratory testing
Another very obvious element of the Bridgestone complaint and IBM's
response is that there WERE known problems BEFORE going live!
BUT I.T. PROJECTS ARE LIKE THAT YOU SAY?
There is NO reason for them to be.
They are a field of engineering endeavour like any other, failure is
inevitable UNTIL you eliminate every possible cause of failure from the
Engineers are schooled with exposure to failure and how to prevent
it. The bulk of the undergraduate university curriculum for
engineers relates to preventing failure and the construction of large
buildings and other engineering structures is ALWAYS coupled to
engineering laboratories that constantly test representative samples of
material to destruction in order to provide required quality control.
LOOKS different, it is a room with
tables and computers and a data projector or two but the principle of
its design and application is the same. The most experienced
personnel of the client organization systematically work with small
quantities of carefully selected representative data to do everything
possible to cause the system to fail.
The dictum is"break it until you cannot break it any more".
ONLY once this state has been achieved can the software then be fully
configured and again tested, the workflow (that is process) dictated by
management and configured, the reports, models (data warehouse), alerts,
etc defined, built and tested and training material developed.
The training material should preferably be interactive.
Once ALL of the above has taken place and the system / systems have
been manifestly proven to be ROBUST and reliable and ALL components are
working THEN and ONLY then are ALL staff brought into the laboratory
environment to be trained in SIMULATED live operations.
Should IBM have done this?
Were they negligent that they did not?
Well, YES BUT, there are very few people in the industry who know to do this let alone know HOW to do this.
far as I am concerned there is NO alternative to the Business
and a rigorous and robust testing program managed
by a tough no nonsense senior person who will brook NO arguments for
7. NO certification
There is an extension to the previous point, something that, on its
own might have greatly reduced the risk of going live prematurely and
that is a robust and tough "Readiness to Commission" Certificate or "Go-Live"
Once ALL staff are trained in the Laboratory, THEN the entire project
team are required to progressively sign a tough formal certificate of
"Readiness to Commission".
The value of such a certificate is that it forces people to think.
The psychology of how one manages people on these projects is
of paramount importance. The psychology of a tough certificate
with wording that clearly holds the people signing accountable cannot
be under estimated -- it forces people to think very carefully before
putting their signatures on such a document.
And THAT is EXACTLY what you want.
Make it DIFFICULT TO SIGN and easy NOT to sign.
8. NO roll-back plan
Beyond that note that Bridgestone did NOT have a roll-back plan.
They were apparently unable to roll back to the old systems. That
is an act of gross negligence that needs to be laid equally at the door
of IBM and the CIO / IT Manager.
This should be NON-NEGOTIABLE!
From the documentation there are other factors.
Consideration of my factors relating
REAL Issues in Business Information Systems" -- the
factors causing failure and the Critical Factors for
Success (the subject of my book -- available on the
website together with the course
of the same name
) will give you many more
pointers to what went wrong and how YOU can avoid a similar catastrophic
outcome for your organization.
suggest for your consideration that there IS a better
way that will deliver MUCH better outcomes, see my
article on "What
does a HIGH VALUE Business Information System Solution
" for more ideas.
This outcome is one in which every aspect of the business
runs smoothly, efficiently and effectively. The systems "flow" with the
business and most activities take LESS time than they did previously.
Most importantly executives and managers have a wealth of strategic,
operational and tactical information available literally at the touch of
a button. Information that is of the highest quality and entirely
Executives and managers have time to be more creative and the business
is able to sustain greater production, sales, etc with existing
headcount or headcount has reduced by natural attrition over a
year or two.
The business is booming, it is growing faster than it did before, new customers, new products, new services.
All of this traceable back to the new systems that have been expertly
configured to EXACTLY model the real world in which the business
operates such that the systems are easy to use and FLOW with the
This is what IBM should have delivered to IBM and failed!
website contains considerable information in the form of
articles, white papers and presentations that discuss
what I recommend in considerable detail with information
that you can take on board and apply immediately, please
have a look -- the home page, http://www.James-A-Robertson-and-Associates.eu
will give you a good
overview of what I am advocating and help you to navigate the entire
site to locate information that you can apply immediately.
lists all the webpages on the site, there is a lot of deep content that is NOT immediately visible.
contains well over 150 articles on diverse topics.
provides alphabetic keywords linking to many of the articles
lists around 90 conference presentations, nearly
all different with around 40 of the presentations live on the site for
you to view and download -- email me if there is a presentation you
would like that is not on the site.
you would like to know more about me there is detailed
information on the website and further detailed
information on LinkedIn
page to hear and read what clients and others have to say about me
full version of this article is available
on the website
recent articles are listed after the signature in this
Diagnostic Pulse Measurement
I offer a concise diagnostic "Pulse
" light touch, high
impact investigation that in the space of a day to ten days for most
organizations, depending on size and problem complexity, will deliver
you a concise written report that will accurately diagnose what is wrong
with your current systems OR your project OR your IT Department and
prescribe meaningful and actionable treatment for the conditions I
identify. See special offer at the end of this email.
I look forward to being of assistance to you.
Dr James Robertson PrEng
James A Robertson and Associates Limited
Assisting clients to thrive through effective and efficient application of Business Information Systems
Mobile: +44 (0) 776-862-2875
Landline: +44 (0) 207-059-0007
Website : http://www.James-A-Robertson-Associates.eu
In : http://uk.linkedin.com/in/DrJamesARobertsonERPDoctor
Articles published so far in the article series to which this email refers:
Strategically Enriching your Business Information Systems
Discussion of practical specific measures that can be taken in order to
greatly improve the information yield of business information systems
at both the operational and executive strategic level. A number of
simple steps that can be taken immediately and more complex measures
that can be taken over time.
thread is discussing increasing business system and data
warehouse value yield using techniques that lead to
significantly improved business intelligence capability,
including support for the ability to "obtain answers to questions we had not
previously thought to ask
". This builds on the content in the Strategic Essence and Real
Issues threads. Articles to date include:
Principles of Data Engineering
Steps in Applying these Recommendations
Robust Business Information Systems Procurement
In order to fully apply the methods and principles discussed in the
threads above with regard to new systems it is vital that a robust and
effective approach to procurement is applied. This requires a
tough procurement approach directed at achieving a tough business
outcomes orientated project that ensures a high value outcome.
This thread discusses the components of such a procurement
approach. The individual documents and processes that make up the
approach are outlined. Thereafter the components are discussed in
more detail. Articles to date include:
Bill of Services, Laboratory, Go-live Certificate,
Executive Engagement, Bid Compliance, Adjudication and
Special Offer -- Diagnostic Pulse Measurement
would like to present you with a special offer for my
intense executive level diagnostic service which I term
" because it is quick, concise and delivers high
value diagnostic and treatment information with regard
business related information systems concern or problem including sub-optimal system operation,
stalled and failing projects and under performing Business Systems
and Information Technology Departments.
would like to offer you a standard Pulse
Measurement of one to ten
days at a discounted rate to explore any issue
of concern with regard to your business information
systems, business systems project or business systems
(I.T.) department. At the end of the day you will
receive a headline diagnostic assessment and recommended
treatment of the situation. Method is outlined on
my website together with some example
This is my premier offering and has been delivered dozens of times
-- headlines of some examples are available on my website. Over
the last 25 years I have developed diagnostic techniques, based on
Military "Quick Attack" principles and Engineering methods, which enable me to
rapidly identify the REAL issues with regard to project, system or
departmental under-performance and drill down to concrete indicators
that business executives can relate to, understand and act on.
discussed in my articles on "The
REAL Issues in Business Information Systems" the factors that give rise to
under-performance and the Critical Factors for Success
are more obscure and intangible than many people
realize. Much of what is published about methods
of obtaining successful outcomes is fundamentally
flawed, as evidenced by the ongoing high level of
sub-optimal results, witness recent reports regarding BMW,
Bridgestone and the BBC
you have the slightest doubts about whether your
systems, project or department are performing to
full potential, a Pulse
Measurement will give you a fresh and independent
second opinion. Some Pulse Measurements have
enabled client executives to take major directional
decisions in areas where there was significant
uncertainty, refer the examples
on my website
. In some cases very substantial planned
expenditure was averted.
I guarantee that you will find this intervention of high value, failing
which you may terminate the assignment at the end of the first day and I
will NOT bill you for my fees for the day, only for my travel and
accommodation costs outside of London. This guarantee is subject
to full cooperation during the investigation and all meetings proceeding
To inquire about purchasing any of the above services simply click on
the link above, enter your details in the resulting email and send it to
me. If for some reason the email does not open please just hit
reply to this email and enter your contact details. I will revert
to you in the manner you request to answer your questions and make
Should you require further
and I will be
delighted to connect by email, phone or Skype to answer all your
I look forward to being of service to you.