A large organization had 18 months to replace its old customer information system with a new one that could differentiate among customer levels and provide appropriate products and services on demand. The new system, which cost $1 million and was installed by the IS staff on time, did not work properly. Complex transactions were error-prone, some transactions were canceled and others were put on hold, and the system could not differentiate among customers. The system was finally shut down, and transactions were processed manually. New IS management was hired to build a new system and mend the strained relationship between operations and IS.

So what went wrong? IS couldn’t—or wouldn’t—say no to all the requests for systems enhancements. Eager to please top management, IS management ignored the facts and assured them they could build a scalable system that was on time and within budget. Another big mistake was a strict project schedule with little flexibility to deal with problems and unforeseen challenges. Developers never spoke up about any glitches they encountered along the way. More than a dozen people (including the CIO) lost their jobs because of their roles in this disaster.

Required

a. What could IS management have done differently to make this project successful?

b. What in-house development issues are demonstrated in this case?

c. How could the in-house issues have been addressed to prevent the system’s failure?