It was an IT disaster: what happens now?
Gone bad: some IT project stuff-ups have wide-ranging consequences.
Shape up or ship out was the warning delivered to prime contractor IBM following the release of a Royal Commission report into Queensland Health's infamously botched SAP payroll system.
Premier Campbell Newman has announced the vendor won't be allowed to enter any new contracts with the state until it lifts its governance and contracting practices. Mr Newman has called on IBM to deal with staff adversely named in the report and asked for Crown Law and Public Service Commission advice on what action can be taken against former public servants who played key roles in the debacle. IBM has denied it is responsible for all of the disaster.
Minister for Information Technology Ian Walker will respond to the report's other recommendations when Parliament next sits. Meanwhile, chief information officers and those responsible for such high-risk, wide-ranging, multimillion-dollar technology decisions could be forgiven for wondering about the professional and personal impact of such debacles.
We take a look at four failed ICT projects where king-sized cock-ups led to courtroom consequences:
1. New York's CityTime payroll project with SAIC
New York City claimed victory last year after winning $US500 million in damages from Science Applications International Corp (SAIC), a contractor it hired to replace the workforce management system for the city's 163,000 workers.
Big Apple officials headed to the courts after an initial budget of $63 million in 2000 blew out to $720 million by the time the system was fully operational in 2011.
Claims of multi-million dollar kickbacks to subcontractor Technodyne led to the charges of fraud and conspiracy against 12 defendants, including Technodyne.
The damages bill was more than double SAIC's original estimate.
2. BSkyB's CRM project with EDS
In 2000, systems integrator EDS won a £50 million contract to implement a customer relationship management (CRM) system for British broadcaster BSkyB. The contract was terminated two years later and the work completed by BSkyB at a cost of £265 million.
The broadcaster sued EDS, which was acquired by Hewlett Packard in 2008, claiming the firm had made fraudulent misrepresentations during the sales process.
Legal costs for the subsequent five-year case were estimated at £40 million apiece. BSkyB originally sought damages of £700 million but in 2010 agreed to shake hands for £318 million.
3. Avantor Performance Chemicals' SAP project with IBM
US chemicals manufacturer Avantor called in the lawyers last year, after a failed SAP implementation brought its operations to near standstill. Prime contractor IBM was slapped with a lawsuit which alleged fraud, misconduct and breach of contract and called for "tens of millions" in damages.
"IBM representatives assured us that its Express Life Sciences Solution, a pre-packaged software solution, was suitable to run Avantor's core business processes," Avantor CEO John Steitz said in a statement.
"In fact the solution – and the service and support offered by IBM throughout the implementation – proved to be woefully misaligned with the unique needs of our company and our customers."
Avantor claimed the project, which commenced in 2010, was staffed with "incompetent and reckless consultants" who made numerous design, configuration and programming errors.
The two parties settled their differences in June on undisclosed terms.
4. ScanSource's Microsoft Dynamics project with Avanade
US technology distributor ScanSource is among the latest batch of unhappy campers to head to the courthouse. In January the distributor filed a suit seeking "tens of millions of dollars in damages" from Avanade, a joint venture between Microsoft and Accenture for what it calls "bait and switch" sales tactics.
ScanSource claims Avanade's original estimate to install a Microsoft Dynamics AX ERP solutions ballooned from $US17 million and 11 months to $US66 million and three years, with a go-live yet to occur. Rather than providing the highly skilled experts it promised, the vendor used "a revolving door of consultants who knew little or nothing about implementing Microsoft Dynamics AX software or managing large-scale global ERP projects," ScanSource claimed.
The suit alleges fraud, misrepresentation and breach of contract.
Have you been involved with a major IT debacle? What were the consequences?