Information System Failures
There’s a lot of information system failures.
Examples of Significant Failures
| Company | Year | Outcome |
|---|---|---|
| Hudson Bay (Canada) | 2005 | Inventory system problems lead to $33.3 million loss. |
| UK Inland Revenue | 2004/5 | $3.45 billion tax-credit overpayment caused by software errors. |
| Avis Europe PLC (UK) | 2004 | ERP system cancelled after $54.5 million spent. |
| Ford Motor Co. | 2004 | Purchasing system abandoned after deployment costing approximately $400M. |
| Hewlett-Packard Co. | 2004 | ERP system problems contribute to $160 million loss. |
| AT&T Wireless | 2004 | CRM system upgrade problems lead to $100M loss. |
Preventing Failures
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Risk Mitigation:
- Strategy: Implement measures to reduce the impact or likelihood of risks. This involves planning and adopting practices that address potential issues proactively.
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Avoid Risk:
- Strategy: Alter the project scope or approach to completely eliminate risks. This might involve choosing less risky technologies or changing project objectives to avoid known pitfalls.
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Minimize Risk:
- Strategy: Take steps to reduce the probability or impact of risks, even if they cannot be entirely avoided. This includes adopting best practices, performing thorough testing, and ensuring strong project management.
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Transfer Risk to Third Party:
- Strategy: Shift the responsibility for managing certain risks to a third party. This can be done through outsourcing or purchasing insurance to cover potential risks.
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Accept Risk:
- Strategy: Acknowledge and accept the risk if it is deemed manageable or if the cost of mitigation is higher than the potential impact. This involves preparing contingency plans and being ready to handle issues if they arise.