Delivery and Post Implementation Review: Ford Motors

1
Contents
1. Introduction ............................................................................................................................ 3

2. Current State of Ford and the context in which IS/IT projects are executed ......................... 3

3. Issues related to quality of project and tools used to address them ....................................... 5

4. Leadership Style used by Project manager and Conflict Management ................................. 7

5. Approaches used for Stakeholder Identification and methods used for effective

communication ........................................................................................................................... 8

6. Tools and Methods for planning and procurement .............................................................. 10

7. Risks that could have negative impact ................................................................................. 11

8. Conclusion ........................................................................................................................... 11

References ................................................................................................................................ 14

2
1. Introduction

Ford Motor Company is an US MNC which supplies both vehicles and commercial cars

across the world. The company also owns the brands Ford and Lincoln brands and is a

shareholder of Aston Martin and Mazda companies. Ford is the world's second largest car

producer and fifth-largest manufacturer in automobile industry (Goolsbee et al., 2015). In

2011, the company reported sales of USD 136bn and has a worldwide workforce of 164,000

(form 10K,2011). It operates about 90 plants worldwide. The company Ford is the one to

introduce the concept of assembly lines and large-scale production of vehicles. Pioneering in

modern automotive industry is attributed to Henry Ford, the founder of the Ford Motor

company. The automotive manufacturers definitely require information systems due to the

complex nature of the industry. A myriad of suppliers, distributors and partners are to be met.

Ford tried to implement the concepts of ICT, Information System Technology and joined

forces with Oracle to solve this need within the production and the commercial field and

decided the following scope of the project, which was known as Everest.

Following repeated cost increases and missed time limits, however, the system failed. The

report discusses the current condition of this company, identifies the issues that caused it to

fail, investigates the leadership of the project manager to motivate the team and also

addresses all the disputes. The report looks at the Everest project. The report's context covers

project risk management, leadership skills implementation and other factors that may have

contributed to the company's failed project.

2. Current State of Ford and the context in which IS/IT projects are executed

As per the Ford’s Annual Report (2018), Although the company conducts comprehensive

market research, both within and outside our control, before launching new or enhanced

vehicles and introduction of new services. Several factors affect the performance of existing

or new products and services on the market. Especially in the automobile industry with the

3
growth and rapid development of technology, there is a rapid change and diversification in

the Implementation and demands of technology every day. The design and development of a

new vehicle or the redesign of an existing one takes years. Due to the fast change in customer

preferences, our new and existing products cannot generate sufficient sales and cost-

effectiveness. Although the report further discusses the success of the company in all

technical aspects. According the Annual Report (2018), The ability to grow successfully

through mobility and electrification investments depends on several factors, including

technological developments, regulatory changes, while the company is really doing good in

the fields of technology and advancement which is also considered as one of the reason for

company’s success.

Ford's information system was designed with a focus on better consumer and vendor

interaction, searching for what consumers want, not for what the company wants to grow.

And Ford doesn't just focus on the small goal. For its goals to be fulfilled the company is

working really hard with maintaining and managing the Information System

Technology. Ford has also collaborated with Caterpillar Logistics and SAP to improve

storage facilities and its Daily Parts Advantage network to provide their dealers with their

replacement parts. The company's hope to partner with Cat Logistics is "to secure an expert

partner in the automotive supply chain and lay a foundation on which a new information

system could be developed. The objective is to achieve end-to-end service parts visibility,

increase time-to-market speed, optimize inventories at each location and provide the

customer with better services "(Supply Chain Brain). Ford also uses a SAS platform to

support Customer Relationship Management (CRM), alongside Cat Logistics and SAP. The

SAS system creates a strong foundation for the knowledge collection, data mining and

predictive modelling of the current Ford customer relationship database, thus facilitating

highly successful tracking, patterns, customer segmentation and business life-cycle analysis

4
all supporter of the main activities of CRM. Ford uses information technology effectively to

improve clients and vendors, on business managers, SCM, and CRM. Thus, going through

the reports based on information system and technology, it can be analysed that in the past

few years Ford has done really well and current state of the organisation is currently advance

in the context of Information Systems Technology.

3. Issues related to quality of project and tools used to address them

According to ADTMag (2004), Kevin Mixer, a Boston analyst at AMR Corp. and who

already has experience with Ford and Oracle, has initially marked the program's $200

million, which cost them $150 million more internally, taking the project's value to

$400 million. This is consistent with the published cost estimates of 400 million dollars. A lot

of features were missing too. Suppliers still had to search for specific pricing or volumes to

some basic system, and Ford had not entirely cut them over, forcing users to propagate

two environments. The suppliers had to adopt a value proposal, and it wasn't being done at

Ford. The primary reasons for Everest's failure, the project to change the way Ford handles

procurement were the following:

1. Escalation costs: Initially, the total cost of the project was estimated at USD 200 million.

Nevertheless, as development progressed, the cost was steadily increasing, with Ford spent

up to USD 400 million before quitting the company in numerous published reports.

2. Facility of use: The Everest project was simply not anticipated. For the end user–the

manufacturers–the new system wasn't better. They had to reach the old web interface, then

only five screens had to move to find the information was not available. Ford was also

running new and old systems concurrently and manufacturers had no incentives to move from

their current system to the new system. For some data points, even the suppliers who

switched to the new system had to return to the old system. The new system lacked a lot of

features (Jenster & Hussy, 2005).

5
3. Integration challenges: among other issues, this issue because different teams

were working on Everest sub structures had no flawless interaction and teamwork. Many

project components, protection, application servers and customer connection management

systems–have not been implemented seamlessly.

4. Unrealistic objectives: Various critics have suggested that the whole plan was too

ambitious to accomplish in one go. The project aimed at integrating various legacy

procurement systems, standardizing processes and methodologies in all manufacturing sites

and streamlining the supplier network of Ford.

Ford Motors used predictive methods during the implementation and development of the

design. This can be seen in different ways: bad planning, unclear priorities and goals,

adjustments in deadlines in programs, unrealized expectations of time, lack of involvement of

stakeholders, lack of coordination and interaction and insufficient skills (Cornell et al., 2005).

The methodology for the project management to have been used was to be agile by means of

sprints or smaller parts, with users and customers in cooperation. There was also no need to

plan for the implementation of Agile Projection Management at all stakeholders at each point,

because the planning is done at each step. The change was to be made with the parties

concerned. The agile management of the project, even if a team starts with an unclear goal,

means that the team can make significant changes to the objectives while it is going through

the project. For the entire project, Ford took a great bang strategy and tried to solve all of the

issues in one go. Instead, a phase-savvy approach was required for the whole project. The big

bang strategy had an influence on end users and procurement programs. Alternatively, the

issue would have been split into parts, which would have allowed more critical functions.

Upon stabilization and evaluation of the previous part of the project, the majority of the

problems should have been solved one by one.

6
4. Leadership Style used by Project manager and Conflict Management

Different reports and articles have discussed the fact that the purpose of the whole venture led

by Oracle and Ford was too ambitious to be accomplished in all together. The project aimed

at integrating various traditional procurement systems, standardizing processes and

methodologies into all the plants and streamlining Ford's network of suppliers (Songini,

2004). Trying to accomplish various tasks in one go led various conflicts and issues among

the teams. With the Everest project there was obviously a lack of planning. For end-user

suppliers, the new system did not simplify everything. They had to enter the old web

interface, and then they only had to pass five screens to find that the data was not there. Ford

was also running both new and old systems in parallel and the providers had no incentive to

move from the existing system that they knew about to the new system which created a mess

for all the employees and teams that tried using the new IT Procurement system. For some

specific data points, even the suppliers that shifted to the old system had to go back to the old

system. The new system lacked a lot of functionality. Imbalances was at a huge level among

the stakeholders, that the executives and the project managers were unable to deal with the

situations and circumstances at that specific point. A phase-sensitive and planned strategy for

the whole project was required instead. The project managers and the team supporters must

have helped the team with the training and making them understand instead of letting them

create chaos. The big bang strategy has missed roll-out for end-users and procurement

programs. The problem should instead have been partly broken down and more important

tasks should be done earlier. Upon stabilisation and evaluation of the earlier part of the

project, the majority of the problems should have been solved one by one.

As discussed in the previous section, two reasons prevent suppliers from adapting to the new

system were, a lack of incentives and the complex use of a new system provided to

the suppliers. Before starting the project, it was essential to plan and address these two. Any

7
project which does not take into account its end users ' interests must fail. The project should

have included introducing an easy-to-use web interface for providers to have simple and

consistent access to all information or the project managers and the project heads could have

worked on with their respective teams in making the implementation of the procurement

systems easier by providing the team members with trainings and inductions regarding the

new interface. Once the new system was launched, it should also be autonomous, eliminating

the need to go back to the old system. In addition, the incentives to the suppliers were to be

provided for using the new system. These incentives could have been monetary or any other

kind to new system suppliers. This could also have been done by the project managers,

providing the suppliers with incentives could have helped the company in retaining the

suppliers to use the new system which could have created less conflicts among the

stakeholders involved.

5. Approaches used for Stakeholder Identification and methods used for effective

communication

The Project Management Body of Knowledge (PMBOK) offers a Stakeholder Database, the

product of the stakeholder identification process, to be generated and includes the

stakeholders of the project. PRINCE2 sets out the development of a Communications

Strategy as part of the theme of the company (Davenport et al., 2017). In order to determine

their communication needs, each stakeholder has to analyse this program. According to

Freeman (2004), The Project stakeholders may be divided into four categories according to

their general needs: Upwards – Senior managers, sponsors and investors, Outwards-Other

project managers and projects competing for limited project resources – Downwards- Project

team, subcontractors and suppliers – Other project management teams and suppliers and

Sideways which consists of the external stakeholders who are interested in the project.

While in the Everest Project, the stakeholder identification can be done similarly as follows:

8
 Upwards Ford Motor Company, Oracle

Outwards The project managers associated with both

the companies, Ford and Oracle

Sideways Other companies and third party systems

Downwards Project team, suppliers

The advantages of understanding and evaluating correct stakeholders is that the project team

can enhance the project's performance, because stakeholders can provide one with critical

information to ensure that things are not missing and something important is not left behind.

One will reduce delays by motivating stakeholders to contribute rather than stopping them

from receiving approval. If the right stakeholders fail to be identified and active, they may

contribute to a budget exceeding the plan, meeting significant deadlines, wasting the time and

energy of the project participants, and ultimately a failure and a shelving of the project which

was case that happened with the Ford Motor Company. For the Everest project, the

stakeholders could have been identified by working on questions such as, who has a

positively and negatively impact on the project, who can succeed (or fail) with the power,

who is taking the decisions related to budgets, who are suppliers, who will finally use the

procurement system that is being designed, who can solve potential project problems, who is

responsible for the distribution or acquisition of services or facilities, who has the experience

required for the project and so on (MacDonald, 2016).

There are various methods for effective communication that must have been implemented by

the stakeholders involved in the Ford Motor’s Project, Everest. Communication methods such

as implementing a variety of techniques to classify the full range of stakeholders, prioritizing

stakeholders in terms of their relative power, motivation and attitude towards the program

9
will direct the investment in time, defining the intent of the communication strategy will

decide the delivery methods and means, timing is crucial. Communication often does not

work because it is too late. The stakeholders need time to adapt and accept it as a necessity;

otherwise they are still in resistance mode when it happens. Also communication works best

if it's two-way, early and often using the correct channels to reach your communication goals,

could have helped the team with the successful project.

6. Tools and Methods for planning and procurement

Ford was very keen to make Oracle ERP working and gave a lot of money and talent at the

problem, but the attempt remained unsuccessful. Most businesses are or will be where Ford

stood faced with a very complex and uncomplicated issue. There is a strong need for

technologies to reduce both the probability and severity of failures in software projects that

will reduce the complexity of software and facilitate controlled evolution. In order to attain

controlled evolution, appropriate planning methods and tolls must have been implemented.

During the initiation and development of the project, Ford Motors ' used the

predictive Project management methodology. In the meantime, the project management

methodology to use was Agile, whereby the project should be carried out in sprints or smaller

areas and in partnership with the users and the customers. Ford decided to adapt the shelf

model to its requirements and to incorporate it. This system however had no automotive-

related capabilities. As a result, Ford could not offer any particular business processes. This

led to an unnecessary commitment in terms of individualisation and incorporation. They

needed a more automotive-and Ford's own business processes-friendly platform. Even as the

Oracle ERP system worked, improved planning should have been done with higher costs and

customization time allocations. Better planning and business needs analysis should have been

carried out. It was then easier to determine how the internet could help satisfy Ford's needs.

10
The planning and timing should rather than external factors have been dictated by internal

factors.

7. Risks that could have negative impact

The automobile supplier has very complex information technology specifications. A number

of manufacturers, retailers, distributors and investors had to work on the system, while the

interface that was created for the IT procurement system was quiet tough, where the suppliers

and the people using the new application had to enter the old web-based interface, only to

find out that the information was not available on five monitors. This should have been

considered as a risk by the project managers. Although, later the issue proved to have its

negative impact and was considered as one of the major reason for project failure. Another

risk was the stakeholder identification which was not done appropriately and thus led to

failure of the project. There were various integration challenges with the project also the issue

was primarily due to a lack of perfect communication and teamwork between different teams

that work on Everest sub-systems. Different project components, security, app servers and

customer relation management systems were not seamlessly integrated.

8. Conclusion

The design of complex IT systems has created many failures and Ford's Everest is one

amongst the many. The loss could have been prevented by priority and better planning

project managers could have increased the chances of success of the project through paying

attention to all tasks on the critical path and assessment of the risks and the resulting backup

plans. They should have taken into account many delays and thus assign time, money and

staff-related resources. Continuous support from top management is also necessary for a

major project to succeed. Such measures combined with good management of the project will

reduce the risk of failure.

11
Being a part of Project Management field and dealing with the project management methods,

projects, tools and analysis had helped me in better understanding of most of the project

management concepts which I can implement further in my professional life and career.

12
13
References

ADTmag. (2004). Oops! Ford and Oracle mega-software project crumbles -- ADTmag.

[online] Available at: https://adtmag.com/articles/2004/11/01/oops-ford-and-oracle-

megasoftware-project-crumbles.aspx [Accessed 24 Nov. 2019].

Cornell, C., Fitterer, R., Salim, S., & Schwartz, R. (2005). Team Project–ERP Analysis Ford

purchasing system–“Everest” IS650–Enterprise Resource Planning Sock H. Chung, MBA,

PhD, FLMI.

Corporate.ford.com. (2018). [online] Available at:

https://corporate.ford.com/microsites/sustainability-report-2018-19/assets/files/sr18-form-10-

k.pdf.

Davenport, T., & Harris, J. (2017). Competing on analytics: Updated, with a new

introduction: The new science of winning. Harvard Business Press.

Form 10-K – Ford Motor Company, 2011. UNITED STATES SECURITIES AND

EXCHANGE COMMISSION. <online> Available at: <

http://www.sec.gov/Archives/edgar/data/37996/000003799612000007/f 12312011-10k.htm>

[Accessed on 6 October, 2012]

Freeman, R. E. (2004). The stakeholder approach revisited. Zeitschrift für Wirtschafts-und

Unternehmensethik, 5(3), 228-254.

Goolsbee, A. D., & Krueger, A. B. (2015). A retrospective look at rescuing and restructuring

General Motors and Chrysler. Journal of Economic Perspectives, 29(2), 3-24.

Jenster, P & Hussey, D. 2005. Create a common culture between Information Technology &

business people to reduce project failures. Computer Weekly. March 22

MacDonald, J. (2016). [online] Available at:

https://www.business2community.com/strategy/stakeholder-identification-analysis-made-

easy-project-managers-01440041.

14
Rasnacis, A., & Berzisa, S. (2017). Method for adaptation and implementation of agile

project management methodology. Procedia Computer Science, 104, 43-50.

Songini, M. L. 2004. Ford Abandons Oracle Procurement System. <online> Available at: <

http://www.computerworld.com/s/article/95404/Ford_Abandons_Oracle_P

rocurement_System> [Accessed on 6 October, 2012]

15