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Systems Breakdown
Case Study:
A Square Peg and a Round Hole
by Phil Simon
Every organization uses software applications to
support its business processes. Some organizations buy,
some build, and some rent software as a service (SaaS).
Buying and integrating proprietary applications are
sometimes complicated by M&A activity; acquired or
merged organizations often use different applications
and systems than their new owners. CIOs facing this
type of problem should think long and hard when
considering integrating disparate applications.
New systems fail for many reasons. The following case
study involves a large organization that spent more
than US $3.5 million attempting to implement and integrate disparate applications over the course of several
years. This case study is instructive on a number of
fronts, showing:
PROJECT BACKGROUND
LaBrie Healthcare is a large, multisite organization with
a hodgepodge of disparate systems. Over the course of a
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number of years, LaBrie acquired several individual hospitals without imposing strict standards about systems
and data on these new acquisitions. As a result, each
hospital maintained a great deal of autonomy vis--vis
maintaining its own systems. Whats more, some sites
outsourced such functions as payroll, while others ran
these processes internally.
LaBrie aimed for simplicity: it wanted to implement
and integrate an enterprise resource planning (ERP)
system throughout the organization. However, rather
than have the ERP replace the disparate legacy systems,
LaBrie decided to simply add the enterprise system to
the fray. Additional interfaces would be incorporated
into its already complex systems framework. In other
words, LaBrie senior management decided to create a
monster. It attempted to stitch together a number of
disparate legacy systems via a third-party ETL (extract,
transform, and load) tool and keep them all in sync.
The overall system, and related ETL tools, would theoretically allow for disparate rules at each hospital, as
shown in Figure 1:
In the long term, LaBrie management intended to eliminate its legacy systems. Note that each interface was
actually a set of interfaces. To load employee benefits
from the legacy systems into the ERP, for example, each
of the following types of information needed to be
loaded separately: employee, employee dependent,
employee benefit, and employee dependent benefit.
Whats more, one error would cascade through the
Interface 4
ERP
Interface 2
Third-Party Benefit
Application
Interface 3
XYZ CONSULTING
XYZ Consulting ultimately won the LaBrie account,
largely because of its name recognition. During the
sales cycle, XYZ partners strongly emphasized that it
had the talent to build the amalgam of systems that
LaBrie desired. XYZ was an established firm and could
not have claimed ignorance about LaBries forthcoming
challenges. XYZ senior partners simply chose not to
advise LaBrie of the many difficulties that it would
undoubtedly face by undertaking such an endeavor.
If it had, then XYZ certainly would not have won the
business in the first place.
XYZ was a very large consulting organization. Within
it, the ERP group represented a very small percentage
of total company revenue. The salespeople at XYZ saw
a multimillion-dollar carrot and opted to ignore the
risks associated with chasing it. Surely, XYZ had overcome more formidable client challenges than the one
posed by LaBrie.
It is very likely that smaller boutique firms would have
walked away from this deal upon learning about what
LaBrie was determined to build. Smaller firms tend to
be very risk-averse to large IT failures.
PROJECT CHALLENGES
As expected, technical and people issues plagued the
project from the beginning.
The Executive Update is a publication of the Business-IT Strategies Advisory Service. 2009 by Cutter Consortium. All rights reserved.
Unauthorized reproduction in any form, including photocopying, faxing, image scanning, and downloading electronic copies, is against
the law. Reprints make an excellent training tool. For information about reprints and/or back issues of Cutter Consortium publications,
call +1 781 648 8700 or e-mail service@cutter.com. Print ISSN: 1530-3470 (Executive Report, Executive Summary, and Executive Update); online/
electronic ISSN: 1554-7086.
Vol. 12, No. 9
EXECUTIVE UPDATE
Technical Issues
To be certain, many implementations face last-minute,
unexpected data issues and crises. A postmortem on
such implementations can typically find a few key
points at which the project derailed. On the other hand,
the LaBrie project had no viable chance of succeeding
from the start; the system architecture virtually ensured
that this project would never hit its financial and calendar objectives. Each application (legacy systems, ERP,
and TPBA) had its own business rules that, out of the
box, did not mesh with other rules in such systems.
All rules had to be created and maintained in external
tables to interact with each other. These tables were
technical in nature and, as such, were not available
to functional users. Any change to the system would
require IT involvement, thus making the system forever
tied to IT for even the most basic of system edits.
Other issues included:
People Issues
XYZs sole functional ERP consultant (James) abruptly
left the organization for personal reasons, leaving an
enormous vacuum. XYZ eventually filled the position
five weeks later. Because James had not completed the
ERPs setup before leaving, much of the interface development ceased during that period.
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