Norcom, a division of a large manufacturer, needed a new distribution and customer service system. The project was estimated to take 18 months and cost $5 million. The project team consisted of 20 business and IT staff members. After two years, the CIO was fired, and the company hired a CIO with expertise in saving troubled projects. The new CIO said three grave errors were committed.
1. IT picked the wrong software using a very naïve request for proposal process.
2. IT did not formulate a project plan.
3. No one “owned” the project. The IT staff assumed the users owned the project, the users believed the IT staff owned it, and management believed the vendor owned it.
The CIO developed a 2,000-line plan to rescue the project. Three months later, the system failed, even with IT staff and consultants working on it day and night. The failed system was to have been the company’s preeminent system, but it could not even process customer orders correctly, resulting in complaints about late shipments and receiving the wrong goods.
After three years and $4 million, the new CIO polled the staff anonymously. Only two said the project could be saved, and they had staked their careers on the project. The message that the project was not worth saving was very hard for the CIO to give. It was likewise hard for the division president to receive it; he could not accept the idea of killing a project that cost so much money. He finally accepted the decision and all the ramifications involved, including corporate IT taking control of all IT operations at his division.
REQUIRED
a. List the primary components of an RFP.
b. Identify possible components or deficiencies in Norcom’s RFP that could have led the new CIO to claim that it was naïve or insufficient.
c. Identify possible approaches Norcom could have used to evaluate RFP responses.
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