One Expert Pegs Yearly Cost of IT Failure At $6.2 Trillion

blognoggle writes "Roger Sessions, a noted author and expert on complexity, developed a model for calculating the total global cost of IT failure. Roger describes his approach in a white paper titled The IT Complexity Crisis: Danger and Opportunity. He concludes that IT failure costs the global economy a staggering $6.2 trillion per year."

Comments

Re:incompetence

[ta bu shi da yu]

I'd look at it differently. I would firstly work out exactly how much money is generated through effective IT services and projects, and then I'd work out how much money is saved through effective IT services and projects, and then work out how much is lost through projects that go wrong. I think this sort of analysis would give a more true picture of the benefits and risks of IT projects.

Something's wrong with adblock

[belthize]

There was an ad masquerading as an article by Michael Krigsman the CEO of Asuret, Inc., a software and consulting company dedicated to reducing software implementation failures.

Asleep at the Switch

[professorguy]

So let me get this straight... You spend a dollar trying to improve your business process. It doesn't work out. So you're out a dollar. I get it. But then you're out a further $10 because if it HAD worked out, that's what you WOULD have saved. Puh-lease. That's assuming your idea was worth a fuck. NOT ALL IDEAS ARE.

I can easily prove that you personally have lost millions of dollars because there were plenty of things you COULD have done to earn those millions. Why didn't you start a search engine? Why didn't you write the twitter application? Not skilled enough? Heck, you should have bought that winning lottery ticket! And while we're at it, why did you waste your money on fixing your car when it just got wrecked a month later?

My god, you've cost yourself millions of dollars due to your incompetence!

Re:incompetence

[pnewhook]

The amount of time / effort / money I've lost over the years due to buggy and crashing computer software is staggering. And I solely blame this on incompetent software developers. I'm talking of both commercial software (I'm surprised they let some of this crap out the door - do they know what testing is?), and also my own experiences working with development teams.

I've had developers work for me that think they know everything there is to know, refuse to listen to any advice, and basically try to write software only in the way they believe it should be done, completely ignoring the needs and requirements of the system lead and the customer. Throw in to the mix some elitism and a complete lack of ability to communicate without insulting an derogatory statements, and you've got a profile of a large percentage of current software developers. I'm still working to undue to colossal mess of my last ex-software lead that I ended up kicking off the program because he fundamentally didn't know what he was doing (despite thinking he was the best developer on the planet). I've also worked with some amazingly brilliant software developers, but unfortunately they are few and far between. The sheer arrogance of some software developers is astounding.

Re:Does your company lose 10% to IT failure?

[postbigbang]

The credulity problem gets worse when one considers how much more productive people have become when using various applications. Yeah, some of them are probably counter-productive, but others (office apps, line-of-business apps) have transformed how we do business for the better. The number seems terribly grandiose even if you push all of the negatives to one side of the equation.

Re:incompetence

[ozmanjusri]

Company, Annual turnover, $mln. 2004

1. Symantec 1364
2. McAfee (NAI) 597
3. Trend Micro 508

Which OS is costing this?

Which company just blocked the best efforts of the rest of the world to develop an interoperable set of document formats?

Microsoft has repeatedly prevented progress in computing. the opportunity costs of that alone are incalculable.

Re:Does your company lose 10% to IT failure?

[Kintanon]

We see this in our clients relatively frequently. Primarily because small to medium sized businesses are some how allergic to backups. No matter how hard we push for them to actually spend money on a backup system that is appropriate to the size of their business a lot of them end up cheaping out on either no backup, or a backup that isn't the right fit for them.
The resulting failure a year or two down the line can cost then a huge piece of their annual revenue.

Other places we see this are when clients try to put their own (Windows) servers in and screw something up that requires the OS to be reinstalled to undo.
In my experience a lot of these "IT Failures" are actually management/client/accounting failures that happen to overlap the IT spectrum. If you can't get the proper budget to do your job, that's an accounting failure that shows up in your area. If management refuses to abide by their own usage guidelines on the network and constantly are passing around infected files that's going to increase your infection rate. And if a client adamantly refuses to change their tapes then when they have a flood in their server room and it gets toasted that's going to translate into longer recovery times, longer down time, and lost revenue.

Re:incompetence

[Bucc5062]

The amount of time / effort / money I've lost over the years due to buggy and crashing computer software is staggering

The amount of time / effort / money lost over the years due to poor management, bad analysis, and improbable times lines is staggering.

There, fixed it for you. You do see that your own statement is about as arrogant and condescending as the programmers you want to insult. Buggy code, crashing software is not just the responsibility of the programmer, it is the responsibility of the leadership as well. Why was it buggy? Bad design specs, no code reviews, tight time lines with large interruptions? Why did it crash? Poor QA and review by business owners? ridiculous deadlines, poor working conditions, low morale?

There is more there then just "bad programming" as if programming exists in some bubble. Developing is not assembly line work, it is a complex art and yet over decades management has viewed it from an industrial age mentality. Work from x to y, produce x lines of code, stop what you are doing and look at something else no matter where you are at. Certainly there are arrogant programmers, just like there are arrogant managers. I challenge you though to see that both need each other to reduce the number of bugs, the minimizing of crashes (really "crashing computer software? Not Abending or exception failures?) When a positive work environment is set that people tend to work better, with less error. That is the job of management and yes, even leads. For the record, I have been in lead and oversight positions. The best role I played was to get out of the way and let my people do their job. Along the way I would just ensure that we maintained a high quality of effort and we kept on focus to the requirements provided.

A few reasons ( in my opinion)

[KDN]

1. Vendors grossly over selling what they can do. How many times has your company bet on a future product of a vendor that is the best thing since sliced bread and will be available in 3 months, and then 3 months after that, and then 6 months after that, and then a year after that, and then 3 months after that, etc. And when it finally comes out most of the pie in the sky features you were depending on don't really work. But they say it will work in the next version. Real Soon Now.
2. Star Trek style management: Managers who think their crew are Scotty who pulls off a miracle every week. Its never been done, we don't have time to do it right, but its got to work right the first time given not enough resources. Sure it works on Star Trek, its in the script. FYI: I love the Star Trek series, but I also know the difference between fiction and reality.
3. Changing requirements: tell me, who could build a house if you were changing the design every week? One week its a ranch, next week its an apartment building, next week its solar power, next week its wind power, next week it has 5 bathrooms instead of one, next week the bathrooms get moved to different areas of the house, next week the water supply gets moved to the other end of the house. And by the way, we need to cut your budget and move up the deployment date. Doesn't that sound like what happened to Duke Nukem Forever?
4. Big Bang deployments. Designs where a completely new design replaces an old one. No system wide testing (remember the Hubble? The system wide test was deleted to save money.). The old system is torn out, the new system is thrown in, and everything has to work the first time because you can't go back. And there are no facilities for debugging or diagnostics or changes because of course the programmers got everything right the first shot.
5. Ignoring your own staff. Staff does a detailed bakeoff of competing products and chooses the clear winner. Manager goes with the looser because he owns stock in that company. Company deploys product, deployment goes badly, manager blames staff.

Note: these are composite examples from many sources I have gotten over the years. They are not against any one company. But I think they are indicative of the industry as a whole. And that is sad.

Re:incompetence

[Nerdposeur]

Also, this happens too often:

Manager: We need to add Feature Y.
Coder: But that builds on Feature X, which is still buggy.
Manager: I don't care. The customer wants it.
---
(A month later)
Coder: Can we take some time to fix the bugs in Feature X and Y?
Manager: No, we have to make Feature Z, which builds on X and Y. We can fix them later.
Coder: If we'd known you wanted Feature Z, we would have done X and Y completely differently.
Manager: Hmmm. Well, it needs to work by next Tuesday.
Coder: (very quiet expletive)

Re:BS Rolls downhil

[gillbates]

with the top leadership not doing their job

As much as I hate to say it, you are dead wrong about this. Many people think the job of top leadership is to make the company run smoothly. It's not. Their job, specifically, is to:

• Improve the overall impression of the company in the mind of the shareholders, i.e. "increasing shareholder value" or stock price. Notice that this activity has nothing to do with the solvency or efficiency of day-to-day operations. It is why companies blow billions of dollars on unworkable "solutions" (i.e. outsourcing) and hare-brained ideas (i.e. Web 2.0...)
• Reflect the bias and preconceptions of the shareholders. Again, this explains why CIO's typically choose vendors and products which have no relevance to day-to-day operations: the shareholders know little to nothing of operations, and when every other company is using SAP or Oracle, you had better make sure you do as well. Even if all of the company data could fit on a floppy disk.
• Finally, most importantly, the job of the CxO is to finish projects. The shareholders and CEO has no clue what the company actually needs, so the CIO must finish *some* project, regardless of how irrelevant it turns out to be. He'll pave the way for later CIO's by installing a ticking-time-bomb of a system which eventually gets so bad that it must be replaced. No matter how badly the project turns out, no matter how useless or counterproductive, the CIO gets paid based on the size and complexity of the project. The only way a CIO can fail is if he is so concerned about "getting it right the first time" and "making a smooth transition" that he wears out the CEO's/shareholder's patience and fails to finish a project in what they consider a reasonable timeframe. It doesn't matter if it is complete junk; the CEO won't ever hear the problems.

I found it much easier to get along in Corporate America once I discovered the quality of the job is less important than the careers of management. Nobody got fired for shipping a buggy product, but people have been fired for not meeting deadlines.