Introduction
There are a number of IT projects that have failed because of various reasons. Usually, the failure of any project jeopardizes a company’s prospects. Even worse is that when a project’s failure is too big it can cause steal a company’s entire future. As such, the essay will focus on the three IT projects that failed as well as their comparisons.
UK Inland Revenue
1. The UK Inland Revenue is the first example of an IT project that failed. The failure cost the UK’s Inland Revenue department $3.45 Billion overpayment in tax credit. Consequently, the tax credit system was disrupted and this caused a major administrative failure.
2. This problem arose from a software failure and thus the errors in the IT caused approximately 220,000 to remain unresolved for over ten months after their submission. Moreover, more than 400,000 claimants got their money late (Sale et al, 2005).
3. It was established that EDS, the organization’s IT supplier had failed to identify the potential “arterial sclerosis” which had eventually caused a blockage in the revenue systems that facilitated the flow of information.
4. The report by the commons showed that two groups were involved in the failure of the system. As a result, the EDS were sued hence costing them a hefty compensation claim. Additionally, the Paymaster General Dawn Primarolo, and Sir Nicholas Montagu who was the Inland Revenue chief were held liable for the loss the Inland Revenue had suffered.
5. To prevent a recurrence of the problem changes were made in the organization’s management as it was established that poor leadership was a major contributor towards the software errors that caused a huge loss to UK’s Inland Revenue (Sale et al, 2005). The Inland Revenue would have hired auditors to assess the activities of the EDS, as this would have helped in preventing the collapse of the tax system.
Avis Europe ERP
1. Avis Europe ERP, a car hire firm also experienced a failure in its IT systems. The company lost $54.5 million because of problems in its implementation and design. As such, the firm made changes by scrapping the IT systems, which had failed. According to Dennis and Roth (2009), it was important to put a stop to the development of the enterprise resource planning (ERP) system in order to end the substantial delays and the high costs associated with the project.
2. The failure occurred due to delays and exorbitant costs in the implementation process that would have enabled the project to take off.
3. The problem was not detected early because the company was outsourcing the IT systems thus Avis Europe was not very conversant with the functionality of the IT project.
4. PeopleSoft Inc. and Atos were the organizations that licensed Avis Europe to enable them develop the ERP thus they were held responsible for causing delays in the project’s implementation process. Avis Europe tremendously reduced its outsourcing contracts especially from PeopleSoftInc and Atos in a bid to avoid experiencing a similar problem.
5. The step that should have been taken to correct the problems experienced with the IT project is to seek expert advice on ways of curbing the delays and costs associated with the project.
Hudson Bay Company
1. Hudson Bay Company (HBC), which is located in Canada, incurred a series of losses when they introduced the ‘big ticket’ into the organization in order to replace the use of paper in their operation. HBC, which is a company that deals in joint stock merchandises eventually, ended up incurring a loss worth $33.3 million.
2. Rather than being beneficial, the IT project caused delays to facilitate deliveries to customers thereby resulting in a loss of sales. This is especially because the company conducted changes in every aspect of its IT infrastructure (Mills, 2003). For instance, large in store items like appliances and furniture made use of the ‘big ticket’ technology.
3. The problem was not discovered early because the company was using the ‘big ticket’ for the very first time as it was in its pilot stages.
4. Even though little emphasis was placed on the reasons for the failure, the blame was vested on HBC’s software developers for their lack of competence and dismissed from taking part in any future projects to be undertaken by the company.
5. To correct the problem HBC sought for partnerships with leading technology vendors like IBM, Microsoft, and Oracle. The corrective measure has proved to be beneficial for the company as it is now back on its feet.
Comparison of the three failures
There are both similarities and contrasts with regards to the failure of the IT projects belonging to UK Inland Revenue, HBC, and Avis Europe ERP. To begin with, there is a similarity between HBC and Avis Europe because they both lost money due to delays in their technological systems. Additionally, the two companies were similar because they failure in the IT projects was largely because of a problem in the implementation process. In contrast, the problem in UK Inland Revenue IT project was mainly as a result of software errors. In as much as Avis Europe and HBC made losses, it was not as huge as that of the Inland Revenue, which experienced losses to the tune of billions of dollars. Even so, all the three companies inconvenienced their clients albeit in different ways. The Inland Revenue paid the claimant’s money late because of a blockage in the revenue systems. Since there was a problem in the implementation design for HBC and Avis Europe, the customers could not be served swiftly because of the delays thus a great inconvenience for the clients. To correct the problem, the Inland Revenue made changes in its leadership as it was believed that they bore the greatest responsibility with regards to the failure of the IT project. On the other hand, Avis Europe and HBC corrected the problem by shelving the IT projects as they proved to be costly for the company.
Conclusion
The failure of IT projects in often a costly affair for businesses given that so much money has been injected for the development and implementation of such projects. This is evident from the experiences of HBC, UK Inland Revenue and Avis Europe companies. As such, it is important to take preventive measures to avoid such losses and also corrective measures in order to resume normal operations.
References
Dennis, A., Wixom, B. H., & Roth, R. M. (2009). Systems analysis and design. Hoboken, NJ: Wiley.
Mills, W. J. (2003). Exploring polar frontiers: : a historical encyclopedia. Santa Barbara, Calif. [u.a.: ABC-CLIO.
Sale, J. T., Salter, S. B., & Sharp, D. J. (2005). Advances in international accounting: Vol. 18. Amsterdam: Elsevier JAI.
http://www.computing.co.uk/ctg/analysis/1842584/mps-report-attacks-inland-revenues-tax-credits-failures
http://www.itbusiness.ca/news/hudsons-bay-cio-explains-big-ticket-it-problems/7791
http://www.termpaperwarehouse.com/essay-on/Failed-It-Project/38043
