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IT's biggest project failures & what they teach us

IT's biggest project failures & what they teach us

Think your project's off track and over budget? Learn a lesson or two from the tech sector's most infamous project flameouts.

Knight-Ridder's Viewtron service

The Knight-Ridder media giant was right to think that the future of home information delivery would be via computer. Unfortunately, this insight came in the early 1980s, and the computer they had in mind was an expensive dedicated terminal.

Knight-Ridder launched its Viewtron version of videotex -- the in-home information-retrieval service -- in Florida in 1983 and extended it to other US cities by 1985. The service offered banking, shopping, news and ads delivered over a custom terminal with color graphics capabilities beyond those of the typical PC of the time. But Viewtron never took off: It was meant to be the "McDonald's of videotex" and at the same time cater to upmarket consumers, according to a Knight-Ridder representative at the time who apparently didn't notice the contradictions in that goal.

A Viewtron terminal cost US$900 initially (the price was later dropped to US$600 in an attempt to stimulate demand); by the time the company made the service available to anyone with a standard PC, videotex's moment had passed.

Viewtron only attracted 20,000 subscribers, and by 1986, it had been canceled. But not before it cost Knight-Ridder US$50 million. The New York Times business section wrote, with admirable understatement, that Viewtron "tried to offer too much to too many people who were not overly interested."

Nevertheless, BusinessWeek concluded at the time, "Some of the nation's largest media, technology and financial services companies ... remain convinced that some day, everyday life will center on computer screens in the home." Can you imagine?

Lesson learned: Sometimes you can be so far ahead of the curve that you fall right off the edge.

DMV projects -- California and Washington

Two US states spent the 1990s attempting to computerize their departments of motor vehicles, only to abandon the projects after spending millions of dollars. First was California, which in 1987 embarked on a five-year, US$27 million plan to develop a system for keeping track of the state's 31 million drivers' licenses and 38 million vehicle registrations. But the state solicited a bid from just one company and awarded the contract to Tandem Computers. With Tandem supplying the software, the state was locked into buying Tandem hardware as well, and in 1990, it purchased six computers at a cost of US$11.9 million.

That same year, however, tests showed that the new system was slower than the one it was designed to replace. The state forged ahead, but in 1994, it was finally forced to abandon what the San Francisco Chronicle described as "an unworkable system that could not be fixed without the expenditure of millions more." In that May 1994 article, the Chronicle described it as a "failed $44 million computer project." In an August article, it was described as a US$49 million project, suggesting that the project continued to cost money even after it was shut down. A state audit later concluded that the DMV had "violated numerous contracting laws and regulations."

Lesson learned: Regulations are there for a reason, especially ones that keep you from doing things like placing your future in the hands of one supplier.

Meanwhile, the state of Washington was going through its own nightmare with its License Application Mitigation Project (LAMP). Begun in 1990, LAMP was supposed to cost US$16 million over five years and automate the state's vehicle registration and license renewal processes. By 1992, the projected cost had grown to US$41.8 million; a year later, US$51 million; by 1997, US$67.5 million. Finally, it became apparent that not only was the cost of installing the system out of control, but it would also cost six times as much to run every year as the system it was replacing. Result: plug pulled, with US$40 million spent for nothing.

Lesson learned: When a project is obviously doomed to failure, get out sooner rather than later.

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