“How IBM Conned My Execs Out Of Millions (Technology),” by tyates, kuro5hin, 28 September 2005, http://www.kuro5hin.org/story/2005/9/27/95759/4240.
“The sacred cow of “national assets” is finally on the SysAdmin chopping block,” by Thomas Barnett, Thomas P.M. Barnett :: Weblog, 2 October 2005, http://www.thomaspmbarnett.com/weblog/archives2/002385.html.
Network-Centric Warfare is often criticized as too few, little, too expensive. Writing for different audiences, both Dr. Thomas Barnett and tyates take aim at grandiose ways of winning yesterday’s wars
From the Hawk Strategist:
For the longest time, “national assets,” or satellites and related high-end infrastructure, was considered an off-limits resource of the Leviathan-”off limits” in the sense that it was untouchable budget-wise and largely hidden from oversight in “black programs” (like way too much of the intelligence budget in general).
New Director of National Intelligence John Negroponte sends a shot across the Leviathan’s bow by overhauling a huge $15 billion program that is to “provide the next generation of reconnaissance satellites, known as the Future Imagery Architecture.”
Expect more such moves, because both Dems and Repubs in Congress want less money to be funneled into these super-expensive systems and more effort put into ground-floor spying by humans. There is only so much you can figure out about the Gap from miles above.
This shift reflects the growing understanding that, yes, the Leviathan and its war requirements need a lot of classified information of this sort, but the SysAdmin and its peace requirements need a lot of locally derived information, almost none of which is classified, nor does it take a satellite to gather it, the vast majority of the time.
This is yet another good example of the trend we’ll see more and more: the Leviathan giving up its few-and-the-absurdly-expensive to the SysAdmin’s ever increasing need for the many-and-the-cheap.
From the Techno-Geek
Our budget was toast. Burnt blackened toast. We were so far over budget that we felt sick just talking about it.
We had expected IBM to stay for about three months, which all by itself would have blown our budget, given their $325/hr bill rate. But they were in our company for more than seven months, burning through more than a quarter million dollars a week. And Global Services wasn’t the entirety of the IBM damage. We still had licensing and support fees for Websphere, Websphere Portal, Websphere Content Management, Tivoli Access Manager, and DB2.
IBM, which had promoted itself to lead vendor and integrator, had overpromised, overcharged, and underdelivered. We ended up with an overly complex enterprise portal with a few off-the-shelf portlets and a few integrated applications. Many application integration efforts had to be abandoned. It’s unlikely that those apps will ever be in the portal, and the jury is still out on whether the portal will be a success. None of those slick knowledge management presentations we saw at the beginning of the project bore any resemblance to our outcome, and that original consultant was nowhere to be found.
What Went Wrong
There’s no question that our senior management made major mistakes in vendor selection and management. I still wonder if I could have made a better case to the executives. This was my second experience with IBM, and I knew how they operated. I raised as many warnings as I could, but ultimately because IBM was the vendor with the strongest capabilities, at least on paper, they were seen by the execs as the lowest risk choice. This led IBM to be chosen even when their product was unproven or even demonstrably inferior.
IBM sells itself as a provider of business solutions. That puts them in a position to make architecture and product recommendations. It is no surprise whose hardware, software, and services they typically recommend. After all, IBM invented FUD – Fear Uncertainty and Doubt – to deal with their competitors in the 1970s.
Even though IBM presents itself as a company with very advanced capabilities (i.e. chess-playing supercomputers), most of their customers are looking for the basics: web and database hardware and software, and competent technical staff to set it all up and keep it working. All of this is now a commodity, and companies should be paying commodity prices, not IBMs 300% markups.
Learn From Our Mistakes
They say that exceptionally intelligent people are easier to con, because they don’t believe they can be conned. So if you’re too smart for the following suggestions, you may need them the most. Our IT execs definitely did.
# Don’t take shortcuts with vendor selection or project planning. Make your vendors compete with each other during the selection process.
# Never, ever, ever ask an implementation company for strategy, architecture, or product advice. They have no incentive to help you and plenty of incentives to sell you products and services that you don’t need at inflated prices.
# Open standards means more flexibility in vendor selection. Take advantage of this.
# Know the market. Be able to calculate your resellers’ costs and markup. Remember that markups alone don’t add any project value.
# Check resumes of individual consultants. A $250+/hr consultant should be able to walk on water, and their resume should reflect that.
# Maintain a list of reliable implementation partners that includes large and small vendors, small independent contractors, and capable in-house employees. Match the talent to the project and use only proven talent on new projects.
# Run small pilot projects to test vendors, technologies, architectures, etc. This can be done separately or as part of an iterative development cycle.
For more reading, see Darth Vader’s views on NCO. Or the SecretWarrior on iterative development.
