By Andy McCue, 22 October 2004 16:25
NEWS The Sainsbury's write-off of £290m-worth of IT equipment and related losses this week was a combination of IT failures and management incompetence, according to UK IT bosses.
The struggling supermarket chain this week unveiled a new 'back to basics' business plan after the roll-out of a £3bn automated depot and supply chain system failed to get stock onto the shelves, leading to some processes reverting back to manual.
Sainsbury's is also renegotiating its £1.8bn outsourcing deal with Accenture after the supermarket's CEO Justin King said Accenture had to shoulder its share of the blame although Accenture stresses it had nothing to do with the supply chain system.
Sainsbury's follows a recent trend of companies, such as Avis and MFI, blaming poor results on IT problems, so we asked the silicon.com CIO Jury of IT bosses if the supermarket was unfairly putting the blame for its current plight at the door of the IT department and the outsourcer.
The question split the CIO Jury down the middle with six saying 'yes' and six saying 'no'.
Those in the 'no' camp clearly felt the blame lies at the door of previous CEO Peter Davis, who initiated the ambitious project.
Pete Smith, director of IT and telecoms at Inmarsat, said: "I believe the saying goes that there are no IT projects only business projects."
The management at Sainsbury's bought too heavily into what the consultants were selling them, according to Derek Gannon, IT director at The Guardian.
"The problem is that consultants invariably oversell and set expectations that can not be met. The business has to manage the consultant, but they can only do this if they have a function within their business which knows IT/IS and can see the woods for the trees," he said.
Others cited "management incompetence" and the failure of Sainsbury's to manage the organisational change, while Rob Neil, head of ICT services at Ashford Borough Council, said: "If they've had to switch back to manual processes, the supporting IT clearly wasn't correctly specified or implemented to underpin business process."
The failure highlights a disconnect between the board and the IT department, according to others who said both sides have to take their share of the blame.
"Sainsbury's had a problem, which they computerised - they then had two problems," said Ted Woodhouse, IT director at Leeds Teaching Hospitals NHS Trust. "This feels to me more like a failing of the CEO for not understanding enough about what IT will and will not do, and maybe a failing of the CIO... for simply not delivering."
Steve Anderson, IT partner at construction and property consultancy Davis Langdon, said: "It sounds like there are some major disconnects between the outsourcing supplier and the internal IT team, particularly with Accenture now involved in renegotiations surrounding the existing outsourcing deal (probably to broaden its scope), and these problems must be laid at the door of the existing CIO."
But Gavin Whatrup, IT director at advertising agency Delaney, Lund, Knox, Warren & Partners said the episode points more to the failure of 'big bang' IT projects rather than IT itself.
"Any single large investment is going to be risky. Sainsbury's, along with past government under-achieving IT projects, points to the failure of large IT projects, not IT. It is likely the design, not the tool, that is at fault. Time for a rethink?"
Today's CIO Jury was...
Jeremy Acklam, IT director, Virgin Trains
Stuart Aitken, CIO, Medical Research Council
Steve Anderson, IT partner, Davis Langdon
Dr Stuart Brough, director of IT services, University of Strathclyde
Mark Foulsham, head of IT, eSure
Derek Gannon, IT director, The Guardian
David Jemitus, head of IT, Government Planning Portal
Phillip Jones, CTO, easyGroup
Rob Neil, head of ICT services, Ashford Borough Council
Pete Smith, director of IT and telecoms, Inmarsat
Gavin Whatrup, IT director, Delaney, Lund, Knox, Warren & Partners
Ted Woodhouse, IT director, Leeds Teaching Hospitals NHS Trust
If you are a CIO, IT director or equivalent at a large or small company in the private or public sector and want to be part of silicon.com's CIO Jury pool, or you know an IT chief who should be, then drop us a line at editorial@silicon.com
Comments
There are 8 comments. Join the discussion
1. Roy Hinds
“It is estimated that half the worlds computer users are dissatisfied, however half of them have only themselves to blame”
The Economist 1972
2. anonymous
Do any members of the CIO jury know the facts about Sainsburys' IT problems? If so, which ones? If not, what is the point of getting them to trot out whatever prejudice they may wish to parade? Any of their comments may be true of some situation or another, but without specific knowledge, it's just so much hot air when applied to a particular complex situation.
3. anonymous
£3000 for an OAP's gutter, £3M for a CIO's pride?
There are regular 'They should be locked up' articles in the news about coyboys taking pensioners to the cleaners.
But surely is's reasonable to expect Ltd/Plc company management to check, schedule and verify things are done, and work properly.
And - perhaps more to the point - for the senior management to ensure that the company has suitably skilled and experienced staff assigned to those projects.
FM the entire IT dept - and somebody else harvests what you scatter and sow.
4. anonymous
£290m writeoff is a F*** up of governmental proportions, regardless of the facts.
Accenture will be (rightfully?) scapegoated and Sainsbury's CIO will get a payoff.
5. Albert Bissember,FBCS,CITP
From what I have read,I would say that this was a failure of the PMO and the PMs ability to technically manage the deliverables from a business and IT prospective. What happen to functional deliverables?. In today's re-engineering, there is no such statement as "BigBang" approach. Executive management should listen to their internal IT subject matter experts and not the vendor(s), who invariable are working at the political levles to sustain their revenue generating P&L. My motto regarding any project is, "75% politics and 25% application on PM governance. All the hype on PM methodologies and certification has done nothing in resolving project failures.We are still working te 70's attitude in addressing successful projects.Finally, when will companies stop using junior PMs (1-6 yrs experience) in managing critical projects.
6. Vernon Skitt
The problem is as much the customer who demands excessive funcionality to impress the decision makers into selecting a particular supplier. Hence the suppliers compete on unreal terms with regard to the actual need.
It always leads to dissatified users and never gives a good ROI
7. anonymous
Interesting that none of the panel quoted work for even vaguely similar organisations. Supermarket logistics is a hugely complex area involving tens of thousands of products distributed to a vast store network. The blame in Sainsbury's case is being laid at the door of IT, where in fact the problems have come from warehouse automation - in essense trying to replace human 'shelf pickers' with electronic ones.
8. anonymous
I do know a far amount on the "inside" as it were about Sainsburys. I would say the responsibility is two-fold - one with inept senior IT management (and the buck must stop at the TOP) - and secondly with similiarly inept senior management who allowed themselves to be hoodwinked by IT. There is nothing about it that shows much intelligence on the part of the decision makers - naive belief that "big bang" projects ever work, naive belief that all you need to do is remove all the existing internal IT staff, naive belief that consultants will ever have the interests of your business at heart.