Arkisto: July 2011

1,7 Billion Euro Project Years Late – Client is not even Worried

12. Julyta, 2011 | Kirjoittaja: Antti Niittyviita

Even though we are supposed to be enjoying our summer holiday, this just has to be written about.

This was found yesterday in Tietoviikko. The news says that US army’s SAP-project is years late. The project has started in the year 2005, and was meant to be completed in 2007, which was when the new completion goal was placed at year 2010. The current guess is that the new ERP would be in use December this year.

Few juicy bits from the story:

The new SAP-system would replace over 140 different old systems when it gets finished. The new ERP is used to control over 140 billion dollar annual budget and it serves over 80 000 users. Around 15 500 people are already using the system.

Wow, the project is four years late from the original plan and around one fifth of the users are using the system!

In the project that has been running since 2005, they are yet to identify all the requirements and expenses. In addition, of the 16 recommendations made by inspectors in 2008, seven are still unimplemented.

Suddenly that estimate of being finished by December this year starts to sound very optimistic.

According to the accountants, the project has become over 53 million dollars more expensive than was originally budgeted. There is a danger that once finished, the system won’t be serving the original goals placed for it.

According to the inspectors’ report, the US army itself is not as worried about the project’s future and states that the presented risks are manageable and do not affect the project’s expenses or schedule.

I’m sorry, but what the hell? “Do not affect the project’s expenses or schedule”? Just how much should the project be late for it to affect the schedule. I am pretty sure that the army’s top brass do not do that project with their own money.

Yet, there is something sensible at the end of the idiotic story:

The CEO of an American consultation firm Asuret, Michael Krigsman, reminds that all the large ERP-projects are influenced by three factors: The software supplier, system integrator and the client. For the project to be successful, all three need to do their roles well.

Undisputedly in this case the client, US army, has not watched after the supplier enough. But why should they, since the risks are manageable and there is no scheduling problem.

Your firm does not have as much money as the US army. Before signing the delivery contract, choose yourself an impartial partner who will help you keep the supplier in schedule.