BSkyB Wins £709m Lawsuit Against HP-EDS

E5Rebel writes "In a massive legal case in the UK, HP-EDS has been found guilty of 'fraudulent misrepresentation' by their sales team when winning a major CRM project. Settlement could cost £200M out of an initial claim for £700M. HP's only relief was that parts of the claim were dismissed, but the core claim was upheld. HP is likely to appeal. Outsourcing will never be the same again. HP workers have been on strike against pay cuts last week; no doubt management will try and screw them further to pay for this debacle."

Comments

Overstated.

[Itninja]

The summary: "Outsourcing will never be the same again."

TFA: "Nigel Roxburgh, research director at the National Outsourcing Association, previously told Computerworld UK that if the case is upheld in favour of BSkyB, "it could lead to a real scratching of heads, particularly among lawyers."

Re:Overstated.

[mjwalshe]

And a lot of wonga for lawyers - or alternativly EDS will lobby Cameron to change the law - though if it does reduce outsourceing it will be very ironic its one of Murdochs companies that triggered it. More than a few GMPU and NUJ Members will have a wry smile at that.

Re:Overstated.

[clsours]

Apparently the bulk of the 'problem' came not because of actual contract violations, but the in the course of creating and implementing software product requirements, which is notoriously sticky and difficult; much of which was done on an informal basis. This is a watershed moment akin to Sarbanes-Oxley for outsourcing companies. Look for a whole new series of 'best practices' videos.

Re:Overstated.

[machine321]

it could lead to a real scratching of heads, particularly among lawyers."

At least they've been practicing scratching the other end.

Sorry, I mean practising.

Re:Overstated.

[Lead Butthead]

it could lead to a real scratching of heads, particularly among lawyers.

At least they've been practicing scratching the other end.

I settle for "real beheadings, particularly among lawyers."

Re:Overstated.

[reebmmm]

IAAL. I work with technology contracts. I think that the only reason a lawyer will be scratching his head is because of the genuine unlikelihood that the customer could actually prove a fraud case against a vendor. That's not to say it's impossible, just so unlikely. What's clear is that this was not a contract case. If it was merely a contract case, it would have looked to the four corners of the agreement. The plaintiffs (the customer) had to work extra hard (i.e., $40M in legal fees hard) to prove the fraud.

Customer-clients regularly come to me with contracts that have:
1. no objective criteria to measure success/failure
2. all of the liability for delays, failure to perform, etc. allocated to the Customer
3. do not have sufficient input from the technical people that will actually be working on the project.
4. no contractual remedies for failure.
5. no change management process.

Point #1 is the most important. In this case, if there were objective criteria to measure success, then the breach of contract case is simple to prove. It is like engaging in the design/plan phase of development before you even sign the contract. If a customer can't figure out what objective criteria it needs, it's probably not a good time to enter a $40M contract. Take for example, the objective criteria that the EDS software will meet the minimum process per second with 150 active users. Easy, does it do? If not, see points 2 and 4.

Point #2 is often overlooked. Customers regularly sign contracts that permit a vendor to deliver something non-conforming on the delivery date and not be in breach. The contracts are also usually written so that the additional time spent correcting the non-conforming deliverables are paid by the Customer. These are usually sneakily inserted under the "right to cure" a breach provision. At some point, the vendor (not the customer) should be paying.

Point #3 is necessary in order to establish point #1 and point #2. Management has this idea: oh we need ___ system. Let's find a vendor of ___ system. However, it is the technical people that need to set the objective criteria and then be able to test that it was met.

Point #4 is the stick with which you beat the Vendor into meeting those requirements. Every customer should be asking, "what happens if they don't deliver?" I say, "show me the money." Of course, you can customize however you see fit. Customers however don't usually ask.

Finally, point #5 is so painful its hard to write about. A lot of time and money is lost because the customer does not have a good internal change management process. In addition, the customer does not put that change management process in writing with the vendor. Any change management process should be coordinated through a project manager. The process should require 1. estimates of cost and 2. affect on time line. These should require signature of someone higher up the chain than the project manager if there is a big impact on price or time--what constitutes a "big impact" should be spelled out (e.g., more than $10,000 or more than a 1 week).

As a last tidbit: technology people need to STOP SIGNING AGREEMENTS WITHOUT A REAL LEGAL REVIEW. This includes the stupid little EULAs that you click ok to. That includes the purchase of off the shelf software. That includes signing up a third party for professional services. Those words mean things. Spending $1-3K now saves a boat load on the backend.

Re:Overstated.

[theshowmecanuck]

Maybe this will lead to allowing people who know what they're doing to produce requirements so they actually specify things that are doable instead of pie in the sky vapourware. No, never mind, that's probably too much to hope for. Sales people are too fucking arrogant to understand that just because they sell something they understand it.

Re:Overstated.

[apoc.famine]

I'm not in any way a lawyer, but I can't understand how ANYONE would sign a contract for work without #1 and #4 spelled out clearly. Yet we see this over and over and over and over....

Re:Overstated.

[dkf]

I'm not in any way a lawyer, but I can't understand how ANYONE would sign a contract for work without #1 and #4 spelled out clearly. Yet we see this over and over and over and over....

With a big multi-year project, #5 is at least as important. Things will change because nobody can accurately predict what will happen in the future. But if there's no way to manage the inevitable changes, everything will go badly wrong and in unexpected ways.

Re:Overstated.

[Kjella]

IANAL but I have been an implementation consultant for some years now, and usually we work on time and material contracts that are not entirely unlike what you describe. All I can say is that most of the time it works out well in that we work and rework until the client is satisfied with the solution, but asking how much it'll cost is like asking how long a rubber band is. We have clients that have been very organized and very clear, and we've had clients that have very unclear requirements and very difficult to take a decision. The usual method of securing progress is to have fixed pots of money. This is how much money is in this phase, and if they're happy with how far we got for that money they'll sign on with another phase if not they'll halt the project or whatever. Getting money back can only happen in under really special circumstances.

If our customers want fixed deliveries to fixed prices then we can't have loose requirements, we can't have customers rejecting solutions for arbitrary reasons, whether it's because they suddenly found new requirements or don't like how it turned out in practice or whatever. Then we really do need a checklist of things we can check off and say "This solution is according to specifications" whether they like it or not. If they don't like it, write a change request and we'll quote you a change order price, but in all honestly they're rarely better off with that than with time and material.

That is the problem with your #1, it's not enough to have just success/failure criteria. In fact, many of the project charters I've read to have such criteria which can even be measurable but they require substantial cooperation from the customer. For example, just to take a classic: Together we take a decision but the customer come back later "You didn't tell us all the consequences of this decision and we won't accept this, correct it". Are they right? Sometimes, but very often also not. So we have a failed implementation but that doesn't automatically assign blame anywhere. And that'll be a long fight once it turns ugly, one way or the other.

Re:Overstated.

[KitsuneSoftware]

What is a 'change management process'? I may have heard of it under a different name, but those three words in that order make no sense to me.

Re:Overstated.

[Anonymous Coward]

You were doing great until you got to eulas. Do you really think that we should spend $1-3k for every website we visit, and for every $40 game?

But everything else you said was spot on.

Who's getting screwed?

[girlintraining]

...no doubt management will try and screw them further to pay for this debacle."

Yeah. Printer ink will now start costing $7,000 a gallon instead of the paltry $6,400 it does now.

Re:Who's getting screwed?

[SomeJoel]

...no doubt management will try and screw them further to pay for this debacle."

Yeah. Printer ink will now start costing $7,000 a gallon instead of the paltry $6,400 it does now.

I'm not really sure how raising the price of printer ink is going to screw the striking HP workers.

Re:Who's getting screwed?

[clsours]

Not printer ink, this is about outsourcing. Printer ink costs a lot because of the pretty packaging.

Re:Who's getting screwed?

[causality]

Not printer ink, this is about outsourcing. Printer ink costs a lot because of the pretty packaging.

I disagree with that, though I am sure the packaging is also a factor. Liquid printer ink (i.e. for ink jets) costs so much because the printers are sold as cheaply as possible, at a very low margin and maybe even at a loss. The company then hopes to make that profit back by selling overprices consumables. Laser printers don't use this model. This is why when you buy a laser printer, you pay significantly more money up-front for the printer itself and thereafter you can purchase cheap consumables that more closely reflect the actual cost of producing toner.

Re:Who's getting screwed?

[Nadaka]

Printer Ink costs a lot because the DMCA made it a felony for the low cost and refillable ink cartridge makers to engineer compatible cartridges since the big companies started including DRM in them.

Re:Who's getting screwed?

[mmcxii]

If you bought an inkjet you got screwed before you ever had to buy ink for it.

Re:Who's getting screwed?

[clsours]

Like I said, 'packaging'. (Marketing packaging, legal packaging, intellectual property packaging, etc).

Re:Who's getting screwed?

[obarthelemy]

I think it's about HP deriving most of its profits from printer ink.

Re:Who's getting screwed?

[Toonol]

There's nothing innately wrong with inkjets. They're terrible because of the marketing and sales paradigm that formed around them; but as actual technology, they're fine. The only real problem with them are the legal barriers to actual competition in refills.

Re:Who's getting screwed?

[girlintraining]

I'm not really sure how raising the price of printer ink is going to screw the striking HP workers.

They don't have to screw the workers -- they can screw us instead. Or split the difference and screw both.

Re:Who's getting screwed?

[Anonymous Coward]

trust me you dont want to know

Re:Who's getting screwed?

[StuartHankins]

I am amused by your thought process and wish to subscribe to your newsletter.

Re:Who's getting screwed?

[gnasher719]

Printer Ink costs a lot because the DMCA made it a felony for the low cost and refillable ink cartridge makers to engineer compatible cartridges since the big companies started including DRM in them.

If I remember correctly, Lexmark fell flat on their face when they tried that argument on a competitor. It's not as easy as "software + copyright + DRM = DMCA". DMCA prevents unauthorised access to protected copyrighted software. Lexmark's printer cartridges contained _unprotected_ software that was so primitive that it was found to be not deserving of copyright, so copying it was found to be neither copyright violation nor DMCA violation. Lexmark tried to prevent users of their printers from accessing competitors' ink cartridges without authorisation by Lexmark. But DMCA only controls access to software, not to ink cartridges. And even if it controlled access to ink cartridges, it would only be relevant for unauthorised use of Lexmark cartridges, not for unauthorised use of a competitors' cartridge.

So Lexmark's arguments were based on a complete lack of understanding or wilful misinterpretation of the DMCA.

Re:Who's getting screwed?

[causality]

Like I said, 'packaging'. (Marketing packaging, legal packaging, intellectual property packaging, etc).

When you say "packaging" and the explanation has nothing to do with the commonly-understood definition of "packaging", just extend the meaning of the word so that you are always right! That will fool everyone!

Re:Who's getting screwed?

[Anonymous Coward]

Printer Ink costs a lot because the DMCA made it a felony for the low cost and refillable ink cartridge makers to engineer compatible cartridges since the big companies started including DRM in them.

Case in point re DRM'd ink; I always purchase a real, high dollar spare set of cartridges in case I have to print something critical when the ink runs dry.

However, with the terrible, rotten, failure prone Canon Pixma printer I bought, I've discovered that having a spare cartridge for each color is not enough to insure one can print when the ink runs out. I've had new, factory Canon Pixma cartridges fail its DRM and the printer will not print, even in B/W. For a DRM'd printer, one needs to purchase a least two spares of each color to have on hand to increase the odds that one of them will work. I won't purchase another DRM'd printer, ever.

That's right; CANON PIXMA PRINTERS SUCK ASS due to their DRM.

Stupid Ads in TFA

[Amasuriel]

From TFA:

Amanda Bucklow at mediation firm In Place Of Strife said that even “a long and extraordinary mediation process would have taken only a few days and cost a lot less” than the legal fees spent by both parties.

And now breaking news! Random person trying to sell you some services thinks you should buy their services!

Re:Stupid Ads in TFA

[Kuroji]

Nevermind that apparently a long and extraordinary mediation would only have taken a couple of days, according to her.

Re:No comment...

[Sunshinerat]

From the article:

The judgement is expected to change the legal basis for sales pitches and contracts. It is likely to mean that IT services companies will have to be very careful about what they suggest they are able to do during sales meetings, as they may be held accountable even if discussions are informal.

You better be careful in what you say, indeed.

Re:No comment...

[Cryacin]

Yeah, well, what a surprise. Outsourcing company great at sending out invoices, not so good at delivering a product.

World famous EDS quote. "Never get sales confused with delivery."

SAP

[16K Ram Pack]

Somewhat off topic, but perhaps related to the topic:

Has anyone ever worked in a company where they had a SAP implementation where overall the users and management (and I don't mean snr management who are above it) are actually happy with the outcome?

Re:SAP

[BlueBoxSW.com]

There was a slashdot article awhile back about an SAP implementation at Waste Management that went bad.

Similar situation to this one.

I really think large companies buying these systems are going to start recording the sales presentations, burn them to DVD, and insist on including them in the contract.

That way the sales representations BECOME part of the whole agreement, and are actionable.

Re:SAP

[cyberjock1980]

When I was in the U.S. Navy I was lucky to be at a command that was a test platform for an SAP implementation for the Navy(ERP was the Navy name for it). When I was there, if you were a "power user", even if not a computer junkie, it was very easy to get a grip on the program and use it very effectively. Of course, we had alot of complaining by alot of older people that didn't like change (every group will have these people). The actual rolling out of the platform was painful, but once it was in and operating it was great.

Our only issue was that we needed to be able to store classified "Confidential" information. This was information that was simply above public release, but below "Secret". Our procedures required certain safegards that were not easily implemented into SAP at the time. We had a plan to get it to work, but at a pretty significant cost.

Googling I just found www.erp.navy.mil, so it looks like the Navy has started using it more broadly. As much money as the gov't dumps into crazy stuff, I would be the first to say SAP/ERP was money well spent! Just don't mention NMCI(Navy and Marine Corp Intranet).

Re:SAP

[machine321]

Yes, actually. My wife's company recently did a company-wide SAP implementation, migrating from several smaller apps at smaller divisions to a centralized system. It's been a resounding success. Her division migrated from a heavily-customized Solomon though, which lowers the success bar quite a bit.

Re:SAP

[Locke2005]

Just don't mention NMCI(Navy and Marine Corp Intranet). Well, there's your problem right there... when have the Navy and Marine Corp ever managed to agree on ANYTHING?!?

Re:SAP

[Anonymous Coward]

I really think large companies buying these systems are going to start recording the sales presentations, burn them to DVD, and insist on including them in the contract.

That might be entertaining, I've had vendors flat out lie in sales presentations.

Re:SAP

[codepunk]

I am sure there where some that went well and many that went bad. Now most of them
I am sure are a horrible burden to the bottom line. Installing and running something
like SAP is all well and good when the company is making money and can afford it. When
the bottom drops out the expense and maintenance I am sure only quickens the pace
of demise.

Re:SAP

[masher_oz]

No. SAP was instigated by our previous CEO. Our current CEO was responsible for removing SAP from the last company they were CEO at, so we may have some hope. An example of the crappiness: In order to reconcile our credit card accounts, we are required to "go on a trip". Yes, the writers of this software think that the only time we spend money on our credit card is when we go away. I know that I use my credit card to get around the awful ordering process we are supposed to use - it's a lot easier to go on a "trip" than it is to actually order something.

Re:SAP

[16K Ram Pack]

I really think large companies buying these systems are going to start recording the sales presentations, burn them to DVD, and insist on including them in the contract.

Or do what I do - completely ignore sales presentations except as a rough filter that they might be able to help you, throw it all away and get sitting down with their project managers. I was always amazed when I worked for large corporates at the shit that senior management bought based on a couple of sales presentations.

Re:SAP

[gnasher719]

In order to reconcile our credit card accounts, we are required to "go on a trip".

Did you mention that you can't go on two trips on the same day?

Re:SAP

[Anonymous Coward]

When it involves the Army or the Air Force.

Re:SAP

[asc99c]

It's not very workable just based on the difference between plain English language and contractual English. A bit like legalese gets very convoluted to simply state a simple fact, without allowing differences of interpretation.

Some of the worst difficulties I've recently had are on a project where the design specifications used inappropriate terms. The word 'optimal' was used, rather than specifying an algorithm. Also, one line promised statistics would be available crane, despatch chute, spur etc. The etc. cost a lot of money to implement.

The fact is, a salesperson just can't get bogged down in every detail while selling a system. There's no possible way for them to say the etc. means sorter levels, sorter chutes, pick stations, but it doesn't mean statistics are available by user. And also a typical sales pitch will show every interesting feature implemented at any similar client. It doesn't mean that's included in the cost and will be included in the system you're buying.

So you get the sales pitch, and then you draw up design specs of what is actually going to be delivered and agree on that. Ignore anything the salesman said that you haven't got written in the spec.

Re:SAP

[BlueBoxSW.com]

Contracts don't have to be written in contract form. This is custom, not law.

And, oral contracts, except in a few forms like real estate, are just as valid as written contracts.

Re:SAP

[asc99c]

That is certainly true, but the custom is around for a reason. The reason is that as many people have found out, if you're dealing with someone who wants to be difficult, and is prepared to sue you to get their way, it's a very bad idea to have a plain-english contract.

As in my original post, words like optimal are used in situations where the system follows a simple algorithm to optimise a result. But a human looking at it can find a better result and rightly claim the system isn't optimal at all.

These customs have changed significantly from time to time my previous house was built in 1885 and came with a full set of documents covering the whole history of the house I found it extremely interesting that when it was sold circa 1930 the contracts for the sale had no punctuation line or paragraph breaks just like this the idea was that you couldnt change the meaning by inserting those after signing the document this custom made it very difficult to actually read the document at all and so has passed out of usage to my knowledge

Kinda like the episode of the Simpsons where Lionel Hutz adjusts an advert from:

Works on commission
No money down

to:

Works on commission?
No, Money down!

Re:SAP

[Skuld-Chan]

Every single SAP solution I've ever used/seen in companies I've been at was a huge hack (doubly so for the poor sods who had to use it). Procedures involving copying one field from one tab, and pasting it into another tab to get your job done - stuff like that.

Also - if your in the call center business SAP will literally add minutes to AHT because the SAP client is slow, unresponsive and unreliable (has a tendency to drop calls when the app crashes - note I said when, not if) - which was funny because the in house solution we used prior to that (which had an emacs front end - I'm not even kidding) I never saw crash.

Any app that requires an entire floor of technical staff to keep running should be avoided or at least scrutinized heavily - that's SAP - it was always been worked on and it never seemed finished.

TFA

[wizardforce]

The lawsuit alleged that EDS, now owned by HP, had fraudulently misrepresented itself in a sales pitch in 2000 for the system, leaving Sky to pick up the pieces and take on heavy costs as it implemented the system itself. EDS, on the other hand, said Sky did not know what it wanted, and kept introducing new requirements, making it difficult to deliver.

and

“If other representations become more important than contracts themselves, it could indicate that contracts effectively have no value,” he said. It also potentially risks Entire Agreement Clauses, which exist in most supplier contracts and insist that only terms in the contract are legally binding, rather than any other representations.

It almost sounds like Sky was suing EDS for not finishing work that their sales claimed they could do but wasn't actually in the contract. EDS/HP claim in response that they couldn't actually fulfil the claim anyway as Sky kept changing what was asked of HP/EDS throughout the ordeal. Further, there's concern that the decision weakens the strength of cotnracts compared to marketing/sales' claims...

Re:TFA

[Anonymous Coward]

So basically the situation now is: if you promise to do something face to face you have to deliver regardless if its in writing? How is this a bad thing? Well, I mean for people that aren't scammers, cheats, liers and frauds that is. I can't count the number of times I've asked "Can I get that in writing?" only to get a cold eyed look and a promise that it will be "taken care of" later. I've walked away from quite a few deals, contacts and such (mostly consumer) for just such a reason.

Re:TFA

[Creepy]

Well, I get a certain amount of schadenfreude when I see EDS get bad publicity because they basically wily-nily bought companies, destroyed their benefits, sucked any cash surplus out and fired half the workforce before cutting them loose so their stock didn't go junk. Yes, I am speaking from personal experience, and yes, I'm a bit resentful (how do you spin off a company the EDS way? Fire everyone and let the new company rehire - HR LOVED that one, btw). HP, I don't have any qualm against you aside from your crapware filled laptops and one year limited warranty.

That vented, I think every company has had at least one loosely defined specs created by marketing people who then promise an impossible date to meet even the loosest envisioning of those promises. I know I've seen them - too bad its usually way too late to change anything, but at least I can ask for clarifications before code is complete.

Re:TFA

[wizardforce]

With a contract you can generally point out exactly where obligations to do work were unfulfilled. In this court case, it took 40 million dollars of lawyering to get to the heart of the matter. I suspect that contracts are more easily enforced.

Re:TFA

[WarlockD]

This took 18 months TFA. We don't have the reams of documents they possibly went though.

I can see the manager of Sky emailing a manager at HP/EDS on why its taking so long and the manager blatantly lies. I can also see Sky, after a few months into the projects getting some off hand information decides the change the spec in mid stream.

All this compounded by the fact that neither side seriously looked at either sides contract. I am sure both's in house lawyers did, but upper management don't look at that stuff. The only people who KNOW the timeframe are the line workers. However, at that low level in the food chain they have to lie so they arn't swept up in another EDS/HP employee purge. Being some of the people I have talked to in Plano, there isn't alot of love lost at EDS anymore.

I think Sky just went to the Judge and showed them what they originally were promised and what they got. I also bet one look at the contract shows its to have no substance (i.e. EDS/HP are not liable for anything, even if the software causes a million people to die). I very much doubt there would be an 18 month court case if the contract was rock solid.

Scope creep?

[SimonInOz]

According to the article, 'HP today defended its position. It added: "While we accept that the contract was problematic, HP strongly maintains EDS did nothing to deceive BSkyB." '

Sounds like scope creep to me.
So what really happened was this:

EDS wanted some sort of CRM. They had no idea what.
They hired some random consultant to write a spec.
HP read the spec and thought "we can do that - in fact our system already does pretty much that"
The sales duly sold it as "our s/w does that now, and we can deliver it tomorrow"
EDS management, after some heavy golf sessions, and possibly the odd new BMW, decided it was a good deal
The HP s/w folks said "you sold what?!" to the sales guys, and started trying to make it do what the spec said
EDS started to get bits of the s/w, probably very late, then - finally - noticed they really ought to figure out what they actually wanted
So they change the spec totally
HP s/w folk get annoyed, but try to deliver to the new, completely different spec
It goes badly

Everyone sues everyone.

The lawyers win big time.

Hmm - sound familiar?

Re:Scope creep?

[Espen]

Confused much? EDS is HP. The customer was BskyB.

Re:Scope creep?

[curmudgeous]

BSkyB was the client in this case, EDS was the company contracted to provide services. EDS has since been bought by HP and so HP is now on the hook for the EDS fubar.

Re:Scope creep?

[Sunshinerat]

You are almost right.
HP does not play a part in your conversation until 2008.
EDS told BskyB that they would deliver a CRM system with golden monkeys, BskyB changed their idea for the system to blue unicorns.
The whole delivery tanks, HP buys EDS in 2008 and gets the bill for another 900m pounds.

Re:Scope creep?

[Anonymous Coward]

You must be a moran .. This is not between HP and EDS... They are one company ....BSkyB was the company looking for CRM ...

Re:Scope creep?

[Anonymous Coward]

WTF are you on about? This is only HP's problem because they bought EDS and EDS blagged their way into a $$$ deal with Sky. It's not a problem between HP and EDS.

Despite your ignorance and by pure luck, you're probably right about the golf and the BMW affecting some manager's decision making process.

Re:Scope creep?

[nurb432]

*snip*
It goes badly

Everyone sues everyone.

The lawyers win big time.

Hmm - sound familiar?

Yep, far to often its how things go. But not always on this scale.

Re:Scope creep?

[rhsanborn]

I suspect it is somewhere in the middle. i.e. EDS tells BSkyB they would deliver a CRM system with golden monkeys, BSkyB says yes, and then changes their mind and wants a CRM system with golden monkeys and blue unicorns. EDS delivers, or tries to deliver a system with neither golden monkeys, nor blue unicorns.

Re:Scope creep?

[crath]

I think it is safe to assume that the judge isn't a total moron; so, scope creen won't be at the root of the trouble.

I have managed several large IT outsourcing arrangements, and the supplier's consistently over-promise and under-deliver.

A big problem on these deals is that the sales team often doesn't have to stay behind after the customer signs; so, they don't have to live with the mess they talked the client into signing. As a result, the sales team doesn't learn from their mistakes.

I hope the ruling takes some of the snake oil out of the sales process!

Re:Scope creep?

[Horza66]

I worked as an independent consultant at GM (run by EDS) and at Sky, cleaning up the mess they left behind.

Firstly, on behalf of all the independent consultants and contractors at both sites let me say thank you to EDS. Thank you for our fees. Without your stunning incompetence all down the line none of this would have been possible.

The reality at Sky:

  I joined a couple of years after EDS was slung out. Sky had a creaking legacy (green screen) customer installs system. They needed a comprehensive, fully architected CRM system capable of handling their millions of customers. EDS came in, did a brilliant sales demo, then sent in the drones. This is their standard operating procedure. They have smart people to call on - for sales calls. When it looked like they were about to get slung out of GM suddenly the kind of guys who wrote RFCs were all over the place. Once the attention was off they disappeared back to sales calls. This is how all outsourcing operations run.

Sky discovered pretty quick that they were being handed a pos that could never scale to a multi-million customer operation. Pretty quick being after a couple of years of pointless development. After they ditched EDS things didn't really improve: every department (customer services, billing, actuarial, etc etc) chose a "best of breed" app (more like "best of sales demos" app) then spent years customising it to fit. Then a bunch of said indy contractors tried to integrate it all together. We did the best we could.

Counting the bodies in the development halls, and allowing for what Sky had to pay to get people to work in Livingston (Detroit was comparable, if rather bigger) I'd estimate their costs at £50+ Million a year over rather more than five years. This settlement would put a big dent in that, but it certainly won't cover the cost of EDS's truly monumental incompetence.

Coda:

Between the GM and Sky gigs I had a drink with Compaq's top salesman in Toronto. I related the disasters at GM for amusement value, only for him to express his undying affection and admiration for EDS. What goes, I asked, for there was a twinkle in his eye. He explained thusly.

EDS would come to him for a quote for 10,000 PCs in their upgrade cycle for a major client. Said salesman would provide a quote for top of the line PCs at below cost price. A massive loss for Compaq. He would put this deal on paper, fully specced, and pass it across the desk for signatures.

*Three years later* EDS would come back with the sign-off and a purchase order. Compaq would give them 10,000 of the dregs of the warehouse. They would all surpass the three-year-old spec in the contract. Massive profit for Compaq.

I imagine the salesman made a pretty decent bonus too.

Re:Scope creep?

[b4dc0d3r]

Not sure you read the article. HP completed purchase of EDS after the trial ended, so the only thing HP has to do with this lawsuit is it owns the losing party, which it didn't during the contract. The judgement took 17 months to reach from the end of the trial in July 2008. So the trial ended, and the judge sat around meditating for 17 months, and HP bought EDS.

EDS did not want some sort of CRM, BSkyB did. EDS is an outsourcing company (was, now it's part of HP) and would provide CRM, not purchase it. EDS, now owned by HP, had fraudulently misrepresented itself in a sales pitch in 2000 for the system

It's more likely that EDS promised some sort of a system, and BSkyB led EDS around through as you said scope creep. EDS thinks it upheld its end of the bargain, BSkyB thinks its requests were within reason. Of course, I don't know the details of the contract, nor any more specifics than what's in the article, but your version is completely wrong.

Re:Scope creep?

[mgblst]

Yeah sure, despite your obvious confusion, you are still wrong. You are only looking at one side.

The other side is that HP/EDS (the same company), over promised on what they could deliver to Sky.

Both are common problems in outsourcing, both are equally likely to be true. In this case, according to the judgement and HP, it seems to be that EDS overpromised more than scope creep occured.

Re:Scope creep?

[SimonInOz]

Damn. And I actually read the article and everything. I really should have had my morning caffeine first.
Ah well, no-one's perfect. Certainly not any of the participants in this debacle, whoever they were.

Re:Scope creep?

[Anonymous Coward]

£££

Re:Scope creep?

[SimonInOz]

In statistics, Moran's I is a measure of spatial autocorrelation. Also, Moran is a city in Shackelford County, Texas, United States. The population was 233 at the 2000 census.

Um, maybe you meant something else?

Ah well, at least you didn't criticize my spelling ...

Re:Scope creep?

[twiddlingbits]

The judgement couldn't happen to a nicer firm. HP screwed a lot of EDSers when they took over, and cut benefits and salaries to BELOW the level the "real" HP people were making. And they raided the pension fund for billions (HP has no pension plan)/ And they were going to keep the EDS brand...and they did for less than a year. Bad Karma comes back at you in many ways. That said there are a lot of good people at HP-EDS who may be hurt by all this crap even if they had nothing to do with it.

Re:Scope creep?

[klui]

They were so close; cuz lead monkeys and horses were all they had to work with. Next time, Crazy Glue would be used instead of Elmers for the horns.

Re:Scope creep?

[afabbro]

*Three years later* EDS would come back with the sign-off and a purchase order. Compaq would give them 10,000 of the dregs of the warehouse. They would all surpass the three-year-old spec in the contract. Massive profit for Compaq.

I imagine the salesman made a pretty decent bonus too.

I've heard that chestnut in different forms involving government contracts. That story should be on Snopes, it's so old.

It's nonsense, particularly in computers. It MAY have been true once forty years ago in pipe fittings or something, but in computers it's implausible.

Computer manufacturers don't make things and sit on them for three years. They sell them because beyond a certain point, it's better to sell them at a loss than keep them in a warehouse. 10,000 computers at $1000 each is $10 million dollars in inventory that HP allegedly sat on for three years? I know the story talks about the "dregs" meaning HP could scrape together anything it had sitting around, but the reality is they just don't have that much sitting around - just in time inventory, etc.

What is far more likely to happen is that EDS came back and said "can you honor this" and HP pointed to the bottom where it said the quote was good for 90 days. At that point they negotiated a new deal. HP had some systems that weren't selling well, perhaps about to be dumped, and EDS bought them for full price not knowing.

Re:Scope creep?

[WarlockD]

Ah, but EDS didn't PAY for the computers till three years latter. The specs are for a PC three years old so you can sell them the bottom line PC at that point.

Don't know EDS's side of it though. Could be EDS' client wanted to hold on the order. Maybe there were billing issues. I bet the client told EDS that they needed the computers and since no one renegotiated the contract, EDS asked for Compaq for the original spec quote.

Outsourcing suxors, but ...

[Anonymous Coward]

AC disclosure: I work for BSKYB, but not in CRM ... thank f**k.

Yes, the CRM system has problems, and from a tech perspective I'd agree that it's not worth £48M (OMFG!). However, I think it's amazing that things got this far. If we're in a capitalist society then I also want this to be a meritocracy and I want someone in Sky to publicly take the blame for this 3rd party POS. Regardless of the internal or external software teams, it should never be allowed to degenerate to this level of incompetence.

Re:Outsourcing suxors, but ...

[Anonymous Coward]

That's the problem with HP/EDS. All of the managment, sales staff, and 99% of the offshore support are incompetent. There isn't any lower you can go. As soon as you sign the contract, your are at rock bottom.

Re:Outsourcing suxors, but ...

[mgblst]

People don't get to be in important positions by taking the blame for problems. They get to be in those positions by deflecting the blame to someone else.

Re:Outsourcing suxors, but ...

[Cederic]

It's hard to allocate blame in these cases. The internal staff typically work excessively hard to make the original contract work.

Someone senior usually gets booted out halfway through that leaving someone new to pick up the pieces, but the person booted out tends to have been constrained by various factors and acting with the best intentions, but caught out by a mix of supplier incompetence (don't assume malice), internal incompetence, overcommitment, inappropriate priorities and sometimes just being in over their head.

The people left trying to rectify the situation can bump into all of the same issues, with the added pressure that they know it's going wrong, and the understanding that they'll never get properly rewarded for putting it right.

Big projects go wrong for a number of reasons, including politics, finances, skills, promises, misunderstandings and frankly because these things are bloody difficult.

Publicly taking the blame? Probably inappropriate, unconstructive, unfair and unnecessary.

Re:Outsourcing suxors, but ...

[DragonWriter]

If we're in a capitalist society then I also want this to be a meritocracy

That's kind of like saying "If floorplan of this room is a triangle, I also want it to have interior angles that total 360 degrees."

If EDS has to tell the truth it is dead.

[HornWumpus]

Has anybody ever heard of (or better yet been involved with) an EDS project that went well.

Anyone?

EDS is characterized by: lots of promises, no delivery, never saw the experts present during negotiations again, lots of low GPA recent college grads doing 'work' they are not qualified for.

I don't know how EDS stays in business. Kickbacks to purchasing officers with no stake in the projects is my guess.

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

Although it's possible things have changed in the past decade, having worked for EDS as a new graduate, I take issue with your assertion. It's full of high GPA recent college grads, with a seriously over-inflated sense of their own competence, doing 'work' they are not qualified for, managed by people whose sole qualification is that they are the sub-set of that group who lacked the ambition to leave their employment in order to do something less pointless long enough to be promoted.

Re:If EDS has to tell the truth it is dead.

[Anonymous Cowpat]

Actually, the computer thingies in job centres work fairly well. The underlying database that they provide access to is badly designed, and badly filled in, but the terminals themselves largely work (and have EDS logos on them).

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

No, not really.
I used to work for them, and quit in disgust after some six months when I'd had seen from the inside what they were actually like. Fortunately, this was back in the day when finding a job was easy, so I have to admit that "quitting in disgust" was much less of a risk than it is now. Still, I'm somewhat proud of it - less so for the fact that I didn't realize from the start what I was getting into...

Re:If EDS has to tell the truth it is dead.

[HornWumpus]

I always assumed anybody with a decent GPA would have some experience/contacts by graduation and be able to get a better job.

I know I did.

I guess the defining characteristic of EDS employees is 'not knowing what they are doing'. GPA varies.

I have had to interact with EDS staff. I don't believe _they_ ever got a high GPA (except maybe in the school of education.)

Re:If EDS has to tell the truth it is dead.

[Cederic]

lots of promises, no delivery, never saw the experts present during negotiations again, lots of low GPA recent college grads doing 'work' they are not qualified for.

This hardly differentiates EDS from their competitors. :(

Re:If EDS has to tell the truth it is dead.

[HornWumpus]

Granted.

Which should make this a scary decision for any of these scumbags doing business in England.

Re:If EDS has to tell the truth it is dead.

[rocker_wannabe]

Apparently you are not familiar with the Navy NMCI Contract with EDS. I haven't been following it lately (as in the last few years) but it had VERY overpriced systems on the contract and mostly hired people who didn't have much experience because they were cheap. That contract would keep even the worst managed company in gravy for quite a while. I don't know what most of the military guys thought about it but just ask any civilian employee for the Navy what they thought of NMCI and listen to the expletives fly.

I'm not sure how any company can sell computer software or services without lying, even unintentionally. Anything worth bidding on by EDS is going to be complicated enough to keep them from knowing what they really have for a month at least.

The worst part is if you're going to expect technology salesmen to tell the truth then you're going to eliminate at lot of material for the Dilbert comic strip, among others.

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

Easy to get a high GPA, just take easy classes. Don't need calc for your degree? Take algebra instead. I was constantly shocked that some of these almost-high-school-level classes qualified for credit toward someone's major. I did some of that work in Gifted and/or in self-study, just for kicks.

Re:If EDS has to tell the truth it is dead.

[asdf7890]

I don't know how EDS stays in business. Kickbacks to purchasing officers with no stake in the projects is my guess.

Government contracts for one thing. Hardly anyone (or no one) else of notable size bids for them most of the time as they simply don't want to deal with the red tape and other hassle (taking part in a procurement process can be very expensive in terms of time and effort, especially for large projects, especially for governments), so EDS get some fairly lucrative contracts due to being the only real contender in the procurement process.

I've worked alongside EDS (they managed the IT and other infrastructure for a company we did a pile of work for over the course of a few years) and I can tell you there are some very good people in there. A lot of chaff too, but that is the way of things (in a large organisation chaff that know they are chaff can hide behind others, and once found can be difficult to legally sack), and they often move at the speed of a snail with severe alcohol poisoning (again, this I saw as mainly a function of the size of the beast). I've never dealt with the sales or management teams though, so things could be very different up those parts. There did seem to be notable communication disconnects between some levels of management and the people doing the work (I can't comment on sales - I never had reason to deal with them at all).

Re:If EDS has to tell the truth it is dead.

[Cederic]

I'm kind of torn.

Do I want the scumbags to all go out of business, and stop sucking so much IT budget into their black hole of incompetence, giving the people that can actually do the work the chance to get paid more and deliver things?

Or do I want them to continue fucking it up, as my next career move could well be independent consultancy addressing exactly this type of scenario?

Time to read up on Game Theory..

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

Well I have seen a couple contracts that went well for EDS. But I also know they are great at bidding such that the client ends up adding more and more into the contract. They would give the store away to suck the client into the position of bleeding out extras.

And having seen two contracts, I don't see how this could be the first time. Both contracts read like some moron wrote them. No meaningful performance standards were written. (Only time to acknowledge a problem was written in.) When it came to a list of services and who was responsible for what, nothing concrete was written. Instead they had phrases that referred to providing the same services as before when those had been in debate for years.

I was in a company purchased by EDS and spent a long time working for them. The best thing that happened to me was when I was laid off by HP. EDS had a legion of morons in their legal department and based their business on selling a lie. They would promise the impossible and then find a way to make it look like the client's needs had changed to milk more money for not delivering. I am glad that I was laid off.

Re:If EDS has to tell the truth it is dead.

[jhol13]

In Finland there is company called Tieto (formerly TietoEnator). The sole reason why it stays in business is size. It is almost the only big player in the field.
No small company can compete with their claims.

TietoEnator has horrible track record. Just to point two (of many):
1. Parliament voting system. Took several years as the first(?) system was overloaded by the votes - maximum of 200. Yes two hundred votes (given within few seconds) overloaded the system, the tests showed pretty much random output. BTW, there are as many as three possible votes (yes, no, abstain).
2. Car registry. Finland has 5.2 million inhabitants and less cars. Their system could not cope with the amount of updates to the database.

The biggest problem is that the buyer, usually government, will happily extend the price to several times the original to get something working ... so it makes sense for the TietoEnator to put the least capable into the work.

Re:If EDS has to tell the truth it is dead.

[twiddlingbits]

Having worked for EDS as Senior Technical Staff I can tell you that you EDS was greatly burdened with incompetent, underperforming, meddling middle managers who had nothing better to do but get in the way. HP has sacked most of that level. Technology wise EDS has a few very sharp good people, lots of good processes (commonl NOT followed), many hard workers who put in ungodly hours to try to fixing the mess the meddling managers created but seems to like to overcommit and underdeliver. They do a good job of things like hosting and infrastructure (in fact they host most of the airline reservations systems worldwide) but seem to stumble badly on new development work.

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

I have been working on the NMCI contract for 5 years now...

The NMCI contract gets a lot of flak, and some of it is deserved.

We do hire the cheapest people for the helpdesk and don't train them worth shit. The poor souls that are smart, we don't pay enough to keep.

Management has no idea what is going on...Due to their work force lay offs about a year ago, we will probably have to pay the government a cool 2 million for not making service level agreements (I'm personally happy for this).

No one seems to be able to get the different orgs to actually play nice with each other.

We have extremely slow computers for our customers, some of this is due to all the security the network has running, but what do you expect for a military network? Some customers don't seem to realize this.

The government wanted a 'one size fits all' computer for roughly 250,000 users. For some people that due nothing by type in Word, play in Excel, check news websites through out the day, this is fine, but do you really expect people in NAVFAC (Naval Facilities Engineering Command) to have the same computer requirements?

As much as companies over sell what they can deliver, the government wasn't quite truthful with how many legacy applications we would have to take over. I want to say they estimated 5,000, and it was somewhere around 25,000. The last numbers I saw, were we had it narrowed down to 7,000.

These applications are OLD, really old. I think their Urine Analyst program still defaults to saving on a floppy drive for a backup. Needless to say, they have a hard time working with newer(no where near the newest) technology, not to mention the security.

As someone else pointed out farther down, with switching the Navy over to ERP....The old timers don't like change. Once they all retire and these new guys come up in ranks more familiar with the system, I think there won't be as much negative things to say.

Re:If EDS has to tell the truth it is dead.

[ommerson]

Indeed. There have a succession of botched public projects that EDS has been involved in. Usually for public sector customers. However, EDS's competitors seem manage to screw them up frequently as well.

A few years ago I was attending a Software Project Management training course at Learning Tree. As always at public courses, there is a diverse range of attendees, with at least a few of them coming from an IT outsourcing company such as EDS, Crapita or another of their ilk.

On this occasion two attendees were from EDS, and it was just about the time that the Inland Revenue's ASPIRE project (which EDS was the supplier of) had been cancelled by the UK government due to severe screw-ups that resulted in tax credits for millions of tax-payers being calculated incorrectly. [1][2]

Fast forward to day two of the course and a long discussion of how and why software projects fail... needless to say the EDS employees kept very quiet.

[1] They still a mess several years later, with overpayments amount to £1billions ever year.
[2] I believe EDS got sued in this case too.

Re:If EDS has to tell the truth it is dead.

[ommerson]

Would the government departments that provide most of the business to EDS fare any better if they did it in house though?

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

I don't know how EDS stays in business.

They haven't.

They just got taken over by HP, which is going as fas as it can to dismantle the EDS brand and move the corporate culture to HP (the contractual changes in this are a major factor in the wave of strikes that they're suffering at the moment).

I have some friends who work at EDS. Their jobs are safe (for the time being), but a lot of people they know are not.

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

Has anybody ever heard of (or better yet been involved with) an EDS project that went well.

I have worked for EDS now HP for many years in Europe and have never worked on a project that has failed. This includes some big projects lasting many years. We did have many experts. I can believe that there are problems, what company does not have problems ? The whole outsourcing to offshore sites with cheaper and cheaper labour has caused a loss of expertise, which takes time to rebuild in the offshore locations. As usual shareholder value is king - the cost of support for a system is the important bit, not the people on the project or the quality of the work.

Just like the bankers, sales people get big fat bonuses based on the value of what they sell, with no responsibility for success.

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

Forigve me but you have no idea what your talking about, don't tar the entire company with one brush - I've worked on planty of succesful projects with EDS and some that werent succesful, thats about par for any form of project undertaking, some go well some dont. And the sales process has changed radically in my experience since this event - lessons were learned by most.
.

Re:If EDS has to tell the truth it is dead.

[JohnBailey]

I don't know how EDS stays in business. Kickbacks to purchasing officers with no stake in the projects is my guess.

Don't they take on quite a few government white elephant projects? The ones that never actually work, but the minister vaguely associated with it in an unofficial non blame accepting manner always says is going incredibly well until it gets cancelled?

Re:If EDS has to tell the truth it is dead.

[dkleinsc]

The old saw that seems applicable here: The difference between a software salesman and a used car salesman is that the used car salesman knows he's lying.

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

If you remember, EDS didn't even have an 'applications' business until just before the HP merger. They didn't care about nor track new development, except as part of a contract. Simply put, they didn't have a dedicated applications division, and they didn't have a development shop. If a contract required new code, they found a team that might be able to do it and dropped it in their lap.

Only recently have they been counting application/development sales separately, and managing it as a division. This makes a world of difference, since now the sales people are armed with portfolio information on application development itself, instead of just throwing it in as a one-time cost on the contract. When the announcement came out, I was surprised EDS didn't already track applications. If you wanted a custom app, go somewhere else. But if you needed a custom app as part of some hardware implementation or technology refresh, they could find a way to do it.

If you want your engine rebuilt, don't go to an oil change place and give the guy an extra hundred bucks, and expect a good job. You go where they have the tools and ability to rebuild an engine. HP's development arm is much more mature, and I'm sure the half-assed EDS attempt just got swept into HP, so now the discussion is moot.

Re:If EDS has to tell the truth it is dead.

[Anonymous Coward]

The current HMRC conract with CapGemini and Fujitsu Services is called the Aspire contract. There was no such thing before then when EDS were running the show.

As for tax credits, the IR kept changing the requirements, and the deadlines kept being missed. So the revenue decided to forsake thorough testing of the system in order to claw back some time. End result, crap tax credits system.

I'm not an EDS fan, but they were a victim of the IR's constant meddlings in terms of the tax credits farce. I know, I was working there at the time.

Re:If EDS has to tell the truth it is dead.

[afabbro]

They do a good job of things like hosting and infrastructure (in fact they host most of the airline reservations systems worldwide)

Hopefully you just chose a bad example ;-)

Re:If EDS has to tell the truth it is dead.

[anyGould]

Can't say that's necessarily a bad thing - if you're not interested in it, and don't need it, why take a hit to your GPA?

I dropped high school Chemistry the moment I found out that Calculus counted as a science for university admissions. Why? Because I (a) sucked at Chemistry, having a tendency to drop/spill things, (b) was very good at math, and (c) had no need to know chemistry (and haven't needed it since). Why take a course I don't like and won't do well at when I don't need it?

Interesting question

[VampireByte]

I always figured it was a good thing I hadn't invested in learning SAP and jump on the gravy train some of my software consulting neighbors have been riding... just seemed like a matter of time before word got out and the hours dried up for them.

It's the relationship, stupid!

[rickb928]

I've done a lot of contract work, but nothing on the scale of a CRM install. Despite that, there are somem things that are the same, no matter the size of the job;

- The relationship is key. If you don't forge a good relationship with your client, you will always suffer. Always.

- If the relationship is good you can overcome any obstacle. Even total failure. Yes, even if your solution turns out to not work at all, you can work out the relationship.

- Relationships are give-and-take. If you succeed wildly, you will get more and better. If you do fairly well, you get what is due. If you mostly fail, you work it out. Sometimes it doesn't work out, true. If you fail totally, well, you get what you deserve.

- Importantly, don't get into a relationship you don't intend to actually work on, and don't have any real expectation of success. Someone on the engineering side of HP-EDS needed to tell the sales side 'we can't do all this'.

- Most important, don't go into a relationship with a crazy partner. Sky may have violated this one. Money makes contractors crazy. Trust me on this. The more money, the crazier. Those of you who have real-life relationships with real-life people will find corollaries to this, and they are indeed true. You do not need to waste your 401K to learn this, ok? The tabloids will offer proof enough. Same thing in business. Almost the same process.

Re:It's the relationship, stupid!

[Locke2005]

It's not the relationship, it's the specification. I've never seen a project that had a complete, unambiguous specification, but this one sounds much worse than usual. Sounds like BSkyB went forward on this with this on just a wink and a handshake and figured they'd iron out the details later. Uh, no... the specification needs to be agreed on up front. Sounds like stupid people on both sides of the table to me -- BSkyB stupid for not specifying in the contract exactly what was being delivered and what the acceptance criteria was, and EDS/HP salesmen stupid for responding to all there questions with a "sure, it'll do that!" without having a clue what it would take to actually implement those features.

Re:It's the relationship, stupid!

[Bigjeff5]

It all boils down to poor project management, and it's always one (or more) of three reasons. The difficulty in coordinating the non-technical management's expectations and what the sales team thinks is possible with what is actually possible at a given price is the reason something like 80% of all IT projects fail. It's always either scope creep, budget creep, or time creep that kills them.

This sounds like a case of scope creep to me, and I'm actually surprised UK law is screwed up enough to award a 700 pound judgement for something that isn't even a breach of contract. Frankly, at least half of the blame lies with BlueSky for constantly changing the scope, and the other half to EDS for constantly agreeing to it. Dumbasses. Of course it is going to fail if you're trying to hit a moving target.

Re:It's the relationship, stupid!

[16K Ram Pack]

This is all spot on. I do contracting work for clients, and my A1 priority is that the client is happy with the job, even if it means I don't make much on it. Reason? Because I want the client to come back to me. Unless they were a gigantic pain in the ass, in which case, I don't.

I saw a company go to the wall because they would try to do anything to charge their clients for code changes. If a spec was vague, they'd argue like crazy every time that the client should pay. A few times, I spent more time creating a defence of their vague spec than what I would have spent just changing the damn code as a goodwill gesture. The end result for the company is that they lost a lot of clients who got pissed off at the beligerence they were facing.

Re:It's the relationship, stupid!

[tom's a-cold]

Of course it is going to fail if you're trying to hit a moving target.

But it's surprising and somewhat depressing how few consultants are willing to give their management that kind of tough love.

Re:It's the relationship, stupid!

[tom's a-cold]

I always build in a reserve for goodwill. That way I don't have to go to the mat everytime there's a nitpicky change to make. But I also make it clear that there's a limit to the freebies. I've had plenty of clients who would have tried to bleed me dry with upscopes if there were no limits set. Reciprocity is the goal. If you're being fair, they'll respect you for it. If you're screwing yourself to please them, they'll chew you up and spit you out.

Re:It's the relationship, stupid!

[rickb928]

There are two types of contractors:

1. Those who get work.
2. Those who don't.

One way to not get work; fail to develop good relationships with your clients.
Another way to not get work; Fail to do the work.

One way to get more work; keep your client happy.
Another way to get more work; do very good work.

You sound like you want to get paid. Those who have every excuse may not.

I was lucky to work for a small company, so the boss was always available to me. In a setting like EDS, I would not be interested. Too big, too impossible to steer anything. Scope creep
is both sides fault.

I did see some of EDS' work on the NMCI. Started out good, then they realized the true scope. Didn't take long to see the scope shrink, because as a DOD job there were no good overruns for this project. Not like a weapons job where you just hide it off-book. The NMCI was in plain view. EDS underbid expecting to be able to make it up in overruns and scope creep (actually underestimating the scope and then point to the obvious, making the case they were blindsided - ha...) and addons. It took them 4 years to crank in another 30% or so, which is in fact a pretty big failure for EDS. They should have been able to jack it up 50% at least. Some they made up in skrimping on delivery. I never did hear how the Submarine Service actually did with the NMCI, but there were complaints about shoddy equipment and poor support from Naval offices. I can imagine how that would go over on board a sub.

Now, I'm watching a software outfit play my senior VPs like violins. Kinda sad, they make promises, deliver inferior product, and come out with a new contract to deliver the original product for more money, later than before. But they have a relationship with the VP. So they will be fine. Me? I'll help our users muddle through. We'll make it work. The original product still looks better than the second try in 4 years by these guys. But they have a relationship.

Re:It's the relationship, stupid!

[Chris Mattern]

It's always either scope creep, budget creep, or time creep that kills them.

But the root cause is usually a management creep.

I'm confused

[Locke2005]

Shouldn't BSkyB just get back whatever they paid EDS/HP for the project, e.g. £48 million? What's the rest of the £200 million/£700 million claim for?

Re:I'm confused

[CannonballHead]

Probably lawyer fees. :P

Re:I'm confused

[ebcdic]

Presumably they incurred costs as a result of EDS not providing what they were supposed to.

Sky and EDS - it couldn't happen to two nicer companies. With luck no-one will win except the lawyers.

Re:I'm confused

[Locke2005]

Lawyers for both sides have run up and estimated £40 million in legal fees... sounds like the lawyers have already won.

Re:I'm confused

[asdf7890]

Shouldn't BSkyB just get back whatever they paid EDS/HP for the project, e.g. £48 million? What's the rest of the £200 million/£700 million claim for?

• Money spent: £48m
• + legal fees
• + other costs incurred during the project (project management and other staff time for planning/training/whatever within BSkyB)
• + money expected to be needed to implement a replacement or fix
• + money to cover the time and process of finding a new partner for said replacement/fix
• + losses considered to be due to the failed project, including difficult/impossible to financially assess issues such as reputation (it was a customer relations system that failed, after all)
• + anything else the contract seems to state they might be able claim for if they can prove the circumstances are right for them to do so
• and so on.

Crazy girl==great in bed/EDS==fucks you, no lube.

[HornWumpus]

Granted you don't want a LTR with the crazy girl ether.

HERE IT IS, FOLKS!

[Anonymous Coward]

Let me paraphrase your "comment", such that it is...

I know absolutely nothing about this subject, but let me tell you what's important...

Yeah, alrighty...

Interesting implications

[BigSlowTarget]

FTA it sounds like the salesmen lied and the contract didn't include the lies. The court found EDS liable for what the salesmen said (and prolifically emailed) rather than the signed contract. If that holds it's not outsourcing that will become difficult but selling many complex and high priced products. Each sales meeting could be a contract negotiation with legal implications as well as a demo or whatever. You sales guys might need to drag the lawyer to all your customer meetings going forward. Sales support would become a major pain as well.

Re:Interesting implications

[Anonymous Coward]

FTA it sounds like the salesmen lied and the contract didn't include the lies.

That's exactly what it sounds like. I wonder how far into the sale process the vaporware was presented. Was it just Q&A in front of a white board? Or was it in written in the proposal in response to an RFP? I get the feeling EDS mislead them in the proposal and tried without complete success to squirm out of it in the contract.

Re:Interesting implications

[chiguy]

Each sales meeting could be a contract negotiation with legal implications as well as a demo or whatever.

This would be awesome for the techs who have to deliver the goods.

The sales guys can't just make false promises any more. They'd be on the hook too.

Management would be scared of over-promising in presentations and reign in the sales team.

Now that would change company dynamics.

Ahhhh, if only.

Re:Interesting implications

[Cederic]

It'll hurt clients too; I usually ask salespeople for indicative costs, stating (honestly) that I'm not going to treat them as a promise, a commitment or something I can hold them to.

I just need an order of magnitude understanding of how much of my company's money I'm going to have to spend to implement their product. If I have a business need then there's a massive difference between mobilising a whole procurement process for a product because it meets the need superbly, and initiating internal development because we can't afford it.

Hell, senior management want to know about risk, timescales, and (oddly enough) cost. I can assess the risk, but I need the vendors to help me understand timescales and costs to even get the funding for a procurement process.

Obviously that procurement process includes a significant amount of further discussion, discussion of commercial terms, contacting reference implementations, all the necessary due diligence and a bevy of experience negotiators and lawyers. But that expense is why I need to know up front whether there's even a viable solution.

Great software with a £5m licence fee and a 2 year implementation timescale is never going to be easily implemented quicker or cheaper, even going elsewhere, but at least I can let the business decide whether they're willing to spend that sort of money (i.e. you're hitting 9 digits by the time you've included hardware, business change costs, training, procurement, let alone the implementation, integration and testing) to meet their needs before they commit any real resources (me, I'm cheap).

Getting lawyers involved up front? I concur, that could start getting very nasty, very painful, and break the whole engagement model for the whole industry.

Re:Interesting implications

[Anonymous Coward]

I avoid giving out ball park figures like the plague
Every time I have been forced into giving out a ball park figure, I always make sure the receipient promises that they wont quote it!
Guess what happens every time - yep, they go ahead and quote it and it becomes fixed before the scope is developed. and I am on the client side of the project!

Orders of magnitude is what is needed at the start - bollocks, Over estimate and your doomed
Under Estimate and your stuffed
It all comes down to incompetent budgeting by people who don't know what they are doing (and typically have a tenuous grip on why they are doing something).

Re:Interesting implications

[Anonymous Coward]

What will the world come to if people can't lie to their customers all the time?

Won't someone think of the children!

No surprise.

[Yaos]

If you go HP you deserve what you get.

Re:No surprise.

[MemoryDragon]

Hey, HP was a good company, good products, but that was before Fiorina, and before the ink printer scam started...

HP is run by greedy idiots

[Anonymous Coward]

Being an HP/EDS employee myself, I can guarantee you that I will get screwed.
They already cut my pay once by 5%(plus 15% for one month). After doing this, they also cut several employee's salaries in a "job code alignment", which was just a pay cut in disguise.
This is before and after laying off hundreds of employees, replacing them with morons from India and Malaysia because they are "equally efficient but cheaper".
On the bright side, our CEO make record income thanks to his salary/compensations and his tremendous bonus. Apparently flushing your company down the shitter puts you at the top of the bonus queue.
HP/EDS is run by greedy morons, who outsource all the work to poor morons.
I'm happy to have a job and I hope this whole event doesn't affect me(although I'm sure it will), but HP/EDS can suck it for all I care.

Re:HP is run by greedy idiots

[Anonymous Coward]

I am sorry you would let the company do that to you. Somebody cuts my pay 5% they better be looking to hire another person to take my
place because I vote with my feet. If the org I am working for at the time cannot pay then too bad I will find someone that can.

Re:HP is run by greedy idiots

[Anonymous Coward]

In this economy, putting food on my family's table goes far beyond my personal pride. Unemployment is VERY high in my state(and very high in the city I work in), so getting a job that is going to pay anywhere near my current salary, even with the 5% is difficult if not impossible.

Re:HP is run by greedy idiots

[jtownatpunk.net]

That's some nice Internet Tough Guy but life doesn't always work that way. I know a few people who are working jobs they loathe in order to support their families. Jobs that were awesome 5 years ago and have gone to shit recently with outsourcing of everything that isn't nailed down, forced "vacations" where the company shuts down for weeks and you can use PTO or go hungry, no bonuses, no raises, pay cuts, etc. If they were single and had nobody depending on their income, they'd bolt in a heartbeat even if it meant they'd likely be sleeping on a friend's couch in a few months but who wants to explain to their kids why they have to live in Auntie Jill's garage for a while?

So it's "Thank you, sir. May I have another?" until they can line up something better.

Re:HP is run by greedy idiots

[Anonymous Coward]

Newsflash: It's going to happen anyway, so you might as well take the initiative.

Re:HP is run by greedy idiots

[Anonymous Coward]

It's even better than that. I work with the OP. He took a 10% pay cut last year. He walked with his feet, alright, straight to a bar to complain. I got hit with a 10% cut, but swapped over to a different team and ended up making more than I did before.

Re:HP is run by greedy idiots

[ledow]

Ha, I'm laughing at the "put food on the table" crowd. Putting food on the table is a day-to-day chore. Job satisfaction, a suitable home life, unstressed parents and most importantly JOB SECURITY are a million times more important in the long run. It's short-sighted to claim that you have to be completely disrepected as a person in order to feed your family. Baby doesn't care that dad's a road sweeper, or a baker, or an IT manager, so long as he's home after work, and happy, and that he'll *probably* have a job tomorrow.

Working for companies that treat their employees like that is *not* security - security for today, maybe, but not for tomorrow. And the more you "suck it up" and "just deal with it" by continuing to work with employers that are *abusing* you as a human, the more they'll take you to the cleaners. And the more those employers will thrive and really not care about their employees at all. When do the companies stand up and listen and improve pay and conditions? When all their employees start to walk (and no, I'm not and never have been a member of any union, because I have a tendency to believe that other people are just as wet and short-sighted as some of the posters on this thread and I don't want them dictating what work / pay I'm limited to).

Think I'm just mouthing off and haven't ever been in the position? Been there, done that, several times, with a wife, newborn, toddler, etc., with a mortgage to pay, bills everywhere, loan payments, and balancing a thousand other spinning plates. Every time that I got screwed (or sensed it coming), I moved onwards and upwards and got happier in my work (and higher-paid, but that's neither here nor there). One of those times was when my daughter was barely a month old and I walked from a job because they wanted to treat me like shit (they also thought that the *best* candidate for my replacement wasn't suitable because "He's been working at a supermarket for the last month" in the middle of a economic crisis... so f***ing what? He's working, when he could be sitting at home, and he has more than enough experience / skill to do the job). Call me an idiot if you want, but my daughter did not go without at any point and within a week I was working somewhere else for infinitely more respect and a little bit more money.

I'm sorry, but I owe it to my family to keep my self-respect, to teach my daughter that I'm not a faceless, numbered drone, to come home healthy and happy, and if that means we eat bread and water rather than smoked salmon, so be it. And if a large company offering me huge wages for screwing other people over and / or a paycut that I haven't agreed to has to be told to stick their offer where the sun don't shine, I can, will and have done that (on both counts actually - I've turned down jobs that were handed to me on a plate purely because I didn't agree with how the company were making their sales).

Your family need to be fed, but they also need to know that Daddy isn't a robot that can be stepped on by everyone around him. That's teaching your kids nothing but subservience to people with money, and they'll grow up to hate you or follow you in that path. Like any sensible parent, I want my kid to grow up to question things that are wrong, learn the value of money, the value of respect, and to do better at life than I have. In a modern, developed country, starvation is a *long* way off and, if you seek proper help, almost impossible. If it means a choice between giving up my mortgage and making me / my daughter unhappy, it's an easy choice. Sorry, but my daughter's respect for her father cannot be bought for any job, price or token gesture. And nothing buys my daughter's happiness except my own, and that can't be had by knowing I'm "only" putting food on the table.

Live your corporate existence being abused and trodden on because there "aren't many jobs about". But it's not for me. I'll take my kid to the park rather than to a stadium, I'll show her how to cook masses of cheap soup instead of takeaways and restaurants, and I'll end up having more fun and gaining more respect in the process.

Re:HP is run by greedy idiots

[Anonymous Coward]

So basically, what you are saying is:
I should quit my job, because they don't respect me.
The fact that this will cause me to lose my house and my car doesn't matter, cause I'll somehow feel better about myself as a person.
If I somehow manage to find another low paying job, I can move my family into a cardboard box and eat beanie-weanies every night.
But hey! It's ok!. I'll feel better about myself for standing up for what is "right".
My kids will learn that when life hands you lemons and no one respects you, you should just give up and lower your standards, because feeling good about yourself now is better than short term suffering for a better life later.

PASS.

You've watched one to many lifetime movies. Wake up, realize how the REAL world works.

Re:HP is run by greedy idiots

[Anonymous Coward]

Here's the trick. When they cut your pay because of someone else's performance, now all of a sudden everything everyone else does is your business. Speak up when something isn't going right, ask tough questions, make management acknowledge where things have gone wrong. No more "new direction" without explaining what was wrong with the old direction. You cut my pay, your decisions are going to affect my pay and bonus, you answer to me now.

Worst case, you get to tell a company HP fired you for trying to improve the bottom line, and if you get any better than that (and I have), you're not the only one better off. With a well presented case, they probably won't contest unemployment, so you get paid to look for another job.

Play the game, in other words. Just don't let it play you. Posted AC for the same reasons you did.

Re:HP is run by greedy idiots

[Anonymous Coward]

I love how their "Jobe code alignment" was one way.

Right before they annouced the pay cut I moved to a different job code, so I got a 5% pay cut too(when everyone else on my team got 2.5%) and lost the ability to make over-time.

I was hoping the jobe code alignment would bring me up to what they should be paying me, but no...will probably have to go another year with no kind of pay increase. And that bonus they gave us at the end of the year is bullshit....Only a greedy asshole would cut your pay by 5%, then give it back to you and call it a bonus, talk about a fucked up kind of loan that the government taxes the shit out of.

Re:HP is run by greedy idiots

[Critical Facilities]

Who the hell modded this insightful?? You sir, are a selfish, reckless ass. What you're claiming (with your anecdotal ranting) is essentially that it's better to gamble on your ability to provide for your family and keep your "pride" than it is to put up with various inconveniences associated with work. You are exaggerating various parts of what it's like to work in the corporate world (for the most part) and de-emphasizing parts of your experience (or assuming that your experience is going to automatically apply to everyone else).

News flash, moron, jobs are very often hard to find. They're particularly hard to find in this economy, and harder still if you have an employment record that's filled with lots of "difficult to work with", "has trouble taking direction", "doesn't work well with others", and other such comments.

Your pompous assertion that people should "put their families first" by not putting up with any crap at work reads like it was written by the resentful 16 year old working at a Dairy Queen because his/her parents made them get a job. To actually suggest that your willingness to put up with any unpleasantness on your job outweighs your concern for whether your daughter has to eat bread and water is truly mystifying. To further expound that "if it means a choice between giving up my mortgage and making me/my daughter unhappy..." reveals pretty clearly that your views are quite distorted. I have a feeling that your daughter/family (if indeed they actually exist) might experience a little unhappiness being evicted from their home....just a hunch.

Re:HP is run by greedy idiots

[zero_out]

Leave now.

I worked for HP for a couple of years, and when I found out in 2008 that nobody was going to get a raise, I started looking for another job. Then in 2009 they cut salaries by 5% and I decided to make it known to my manager that I wanted to relocate within the company to the other side of the country (US). What I didn't tell him was that I was receiving calls from recruiters.

Then in May, I was told that "my position was being eliminated as part of a workforce reduction plan." I'm so glad the VP who told me this let me go home early. I doubt I could have lasted another 5 minutes without dancing. The severance package was worth 2 months of pay, at the rate I was getting before the 5% cut. A few months later, I had another job. It pays over 25% more than what I was making at HP, and in general, I love what I do here!

Get out now. Nobody should "just be happy to have a job." Yes, you should be grateful to God that you have a job, but don't JUST be happy with that.

Re:HP is run by greedy idiots

[Anonymous Coward]

Being an HP/EDS employee myself, I can guarantee you that I will get screwed.
They already cut my pay once by 5%(plus 15% for one month). After doing this, they also cut several employee's salaries in a "job code alignment", which was just a pay cut in disguise.
This is before and after laying off hundreds of employees, replacing them with morons from India and Malaysia because they are "equally efficient but cheaper".
On the bright side, our CEO make record income thanks to his salary/compensations and his tremendous bonus. Apparently flushing your company down the shitter puts you at the top of the bonus queue.
HP/EDS is run by greedy morons, who outsource all the work to poor morons.
I'm happy to have a job and I hope this whole event doesn't affect me(although I'm sure it will), but HP/EDS can suck it for all I care.

If HP can suck it as you put it.. Put your name up.. Or are you still happy that you get a paycheck... You could be one of the folks who sit in the UNEMPLOYMENT line right? Oh by the way... you could always go find another job and quit your complaining... Cause you are going to be SO much happier then right... NO you will be a person who complains no matter what.. Sorry for the reality check...

Re:HP is run by greedy idiots

[Anonymous Coward]

Thats right, fight the POWER, down with the MAN.. LOL whatever.. All talk.. U still have a job right... you obviously work for someone or some company... So you get treated nice.. YAY for you..

Outsourcing

[SimonTheSoundMan]

Anyone know of any large outsourcing company that deliver what they promised, to a decent quality?

Capita are another company that comes to mind. They have ripped off most public services in the UK with their poor products. Capita did a good job at ripping Birmingham City Council off with their new web site.

Re:Outsourcing

[Locke2005]

What planet are you from?!? Everyone knows you don't get to be the lowest bidder on a project by giving the customer everything they want! All salesmen lie; the really good salesmen actually know when they are lying. If you didn't fully specify the list of deliverables, the acceptance criteria, and the liquidated damages for failing to meet the criteria was in the contract, then shame on you for signing that contract in the first place! Sure, if you're doing it in house or buying from somebody that gets paid by the hour, then you can incompletely specify and make changes later. But good luck doing that once somebody has agreed on a fixed price for the whole contract!

Re:Outsourcing

[16K Ram Pack]

Anyone know of any large outsourcing company that deliver what they promised, to a decent quality?

No. And I'd never in my life hire one.

If you're a big company with a reasonably bespoke requirement for software which isn't going to die after a few months, then you should treat it as part of your company. I'm amazed when companies think they can treat their complex data like something as simple as business stationery or the car fleet.

The one time it's worth going 3rd party is for highly specialised expertise or non-bespoke software.

Re:Outsourcing

[Anonymous Coward]

GlobalLogic. Client list here. The site's a bit buzzword bingo though.

Re:Outsourcing

[Anonymous Coward]

What did Capita have to do with it?

Greed is good!

[Anonymous Coward]

If you are a labour union.

Difference between what we can & what is paid

[Sunshinerat]

What happens a lot is that the sales people tell we can do A, B and C for you. Then pricing happens, and client is only willing to pay for A.
Contract is limited to A and closed. Then client figures out that in the end they need B and C.
Is that the sales peoples fault?

I still think this is a difficult case and am not aware of all details.

Re:No comment...

[Splab]

Oh god I wish that was the case around here.

Currently I'm looking at 1-2 months of (unpaid) overtime because sales people have sold something we didn't have and never checked with the software guys. For once I wish sales was the one ending up neck deep in crap.

(Why do I do it? Well if no one else does it, the company goes bankrupt and doing unpaid overtime is better than no pay)

Re:No comment...

[Anonymous Coward]

If your employer's finances are so bad that not working 1-2 months of unpaid overtime will bankrupt them, I advise that you start looking for another job.

F |_| C K EDS

[dis0wned]

I wish the execs at EDS would be raped by wild packs of jackals, you know, similar to what they do to their employees.

Douche bag editoral summary

[BitZtream]

Outsourcing will never be the same again. HP workers have been on strike against pay cuts last week; no doubt management will try and screw them further to pay for this debacle.

Let me give you a little fucking hint, when the company you work for, losses a 200M lawsuit, because you were a fuck up ... a pay cut should be the least of your worries.

Where the fuck did this ridiculous sense of entitlement come from? What the hell is wrong with people now days? You don't exactly get raises when you screw up, ESPECIALLY when you end up costing millions to the company. The only time you get pay increases in this situation is when you're a US CEO of a massive company and cost millions of people pain and suffering, THEN you get a bonus.

Re:Douche bag editoral summary

[vajrabum]

So just how many of those HP workers on strike have any connection to this project? Do you know? Or are you just another foul mouth knee-jerk flamer?

Re:Douche bag editoral summary

[Cederic]

I'm confused. You work 80 hour weeks trying to implement the impossible solution your fuckwit sales team promised to the client, fail because it really genuinely is impossible, and then get fucked over by the new owner of your company.

How exactly are you responsible for the £200m lawsuit? Other than increasing its costs by not refusing to work on the bloody thing in the first place (i.e. quitting or getting sacked).

EDS had a terrible reputation and I pretty much hated the company, but that doesn't mean its staff were all screwing up.

Re:Douche bag editoral summary

[HornWumpus]

When a fuckwit sales team promises the impossible they have given you license to not work.

The outcome is inevitable. As you state it's an 'impossible solution'.

Just stop working, look busy and focus on getting another job.

Remember who gains/loses if someone somehow implements the 'impossible solution'.

The sales maggot gains, his lies are now truth. His commission is now from a successful project. He will be telling new lies for the foreseeable future.

The developer loses, he worked his ass off to implement an 'impossible solution' and now has to support the monstrosity for the foreseeable future.

The client loses, sooner or later the impossible solution will fall over.

The out-sourcer wins, their scumbag methods work again. The client will be back for a fix.

When a sales maggot does this the project must be allowed to fail as quickly and publicly as possibly.

Re:Douche bag editoral summary

[Rakarra]

Where the fuck did this ridiculous sense of entitlement come from? What the hell is wrong with people now days? You don't exactly get raises when you screw up, ESPECIALLY when you end up costing millions to the company. The only time you get pay increases in this situation is when you're a US CEO of a massive company and cost millions of people pain and suffering, THEN you get a bonus.

Maybe people looked at the banking industry and decided that was a nice model to use. It wasn't just CEOs that got retention bonuses.

Re:Difference between what we can & what is pa

[Anonymous Coward]

Having experience with both EDS and Capita it is far more likely that the sales people told the client they could have everything from A To X (when they only needed A,B,C but sales will be sure to convince them otherwise) , after while client realised they also need Y and Z so EDS charged them the cost to do that extra work X 20.

When final system was delivered it had A,D,E,H,M,R and Z actually working as they should, everything else was either broken, half implemented or implemented in a way that make no sense at all

When client realised this they went to EDS, who assured them it all could be resolved, for a cost that was about 2X the total original project budget on top of that original budget

Seen the above happen more than once with these companies

Re:F |_| C K EDS

[Anonymous Coward]

There's lots of people I'd like to rape. With a chainsaw.

plus ca change

[HarryatRock]

The problem isn't new, nor is the result. Look for "Project Trawlerman" for a prequel. When sales people who don't know what they are selling meet custards who don't know what their company needs, it's the developers and "implementation team" who have to deal with the reality. If you aren't a lawyer, the next best job is a freelance designer/coder/engineer who gets in late and signs up for a fixed term (not fixed deliverables) at top rates. Everybody else gets shafted.

Not in this dimension

[Lead Butthead]

Someone on the engineering side of HP-EDS needed to tell the sales side 'we can't do all this'.

And since when has THAT ever worked?

Remedy: Don't buy anything from HP.

[Anonymous Coward]

Remedy: Don't buy anything from HP. It's a lagging company with only a few good departments.

Re:F |_| C K EDS

[BitZtream]

You realize that we're adults and that you're retarded use of ascii isn't required since no one cares if you say 'fuck' right?

As for their employees, it sounds like they fucked up enough on their own and are too stupid to get a job anywhere else.

Its funny that you talk about 'screwing over the employees' when ... well, they just lost the company 200m

Re:No comment...

[asdf7890]

If your employer's finances are so bad that not working 1-2 months of unpaid overtime will bankrupt them, I advise that you start looking for another job.

While most economies are starting to recover from recent event, decent well paying jobs are still thin on the ground. He may well be looking for alternative employment while working the current job. No point going until you've got somewhere to go to...

NMCI...

[gmfeier]

...there, I said it! Complete disaster. Of course I retired three years ago and maybe they've fixed it since. And maybe pigs are flying now, too.

Re:No comment...

[stephanruby]

Let me guess, you're exempt and don't get over-time. And the sales people are mostly commissioned-based, and their commission is not based on the completion (nor the success) of the project (but just on having a signed contract with the client).

If that's the case, and if you don't rise up, expect this kind of pattern of behavior to continue. I've seen sales people take down companies because they were chasing poorly structured commissions (instead of worrying about the viability and profitability of each deal they were making).

Good call /.

[sjames]

The bottom of page quote for this:

Even if you can deceive people about a product through misleading statements, sooner or later the product will speak for itself. - Hajime Karatsu

Observer bias

[sshore]

Has anybody ever heard of [..] an EDS project that went well.

No, and that's not surprising in their field. As a company that provides infrastructure, EDS projects are expected to go well. It's not notable when they succeed.

There's just not a lot of articles in the news about "Multi-billion dollar project went as expected". It's not that they never do, rather it's not newsworthy when they do.

Oh my God

[TRRosen]

Sales people lied...I'm Shocked.

An insider perspective from a different case

[Anonymous Coward]

I was called into the middle of a $110 million dollar contract between a very well known multibillion dollar company and HP. I was a subcontractor for HP that was assigned to make things work on the front lines. The vendor promised a migration of tens of thousands of computers without any need for desktop engineers other than simple boxing and unboxing. Over 800 packaged apps were on the line and over 50 desktop platforms had to be made to move to a single standard image.

The client at the time had an almost exclusively 10Mb hubbed network. They also had a contract with AT&T that stipulated everytime a port on a hub, switch or router was touched AT&T made $400. Found out an entire 24 port switch was set to half duplex? That will be $9600 to switch the single switch to full duplex. We had dozens of such switches and over 200 sites. The contract with the client demanded that the network upgrade to a fully switched 100Mbps network would be completed before the migration of the tens of thousands of computers.

Turned out the vendor promised the client their software would be so good that the client could reduce internal IT headcount by 25%. This was discovered by the clients IT department, and along with a contractual guarantee that no field engineer would be needed resulted in a perfect storm of non-cooperation with the clients IT department. It also turned out that the client postponed the network upgrade until after the migration to avoid those $400 a port switch costs as the contract with AT&T was due to expire in eight months.

I got involved as I was one of only three people assigned to migrate tens of thousands of desktops with no client cooperation on a network that was primarily 10 Mbps hubs. The vendor promptly assigned package creation to India which resulted in fewer than 100 of 800 packages being available at migration start due to their incompetence.

It was a perfect storm of incompetence and I was in the middle. I started keeping track of progress and wrote a daily report of what was successfully migrated, what wasn't and the reason for failure. For months the project dragged on, getting farther and farther behind as time went on. Unknown to me the client and the vendor started using my reports as a basis for daily fines that were in the six figures per day. Over the course of several months I unwittingly dictated how literally tens of millions of dollars were spent on fines between the two companies.

At the end the client was suing the vendor for fraud (which was true) and the vendor was suing the client for contractual non-compliance (which was also true). I had two well known multibillion dollar companies getting ready to sue each other, with each having decided ahead of time that I was their preferred witness on why things went bad. I had law firms from both companies tell me to prepare for dispositions the following week as I was advised that I could be in court for several months while the court case progressed. In America when you are an witness you are not allowed to be paid for your time in court as that would be considered a bribe. (Expert witnesses can be paid as they are not material to the case and are outside it).

I explained to both teams of lawyers that I of course cooperate with court and tell the truth. I also let them know that neither side would care for what I had to say. The case was settled the next day. I lost my job along with everyone else as part of the settlement. However I was able to get another job right away and was able to avoid personal financial disaster with being a witness in the middle of battling multibillion dollar behemoths.

Re:No comment...

[twiddlingbits]

Agreed 100%. As a former HP-EDS employee who got involved in a fixing a few debacles it was usually a lot of overpromising by Sales that got the trouble started.

When they start tieing sales commissions to the delivery team actually being able to make good on what was promised then maybe there will be some changes. The Sales team would never buy into that as they think the delivery team are idiots and would screw them with cost over-runs, change orders for no costs, etc. . So you make BOTH teams have a moderate base + good sized completion bonus (by completion I mean client sign off). SInce both have money at risk I think you would get a good contract, a workable set of requirements, and at a cost that is still competitive. Of course one day pigs will fly too.

I'm not at all knowledgable about UK law but in the USA verbal agreements or promises are non-binding (if exception such was made by a corporate officer not Joe SalesGuy) so one cannot sue for specific performance or damages.

Re:No comment...

[stephanruby]

Of course one day pigs will fly too.

Actually, it's one thing to go to management and ask for more money, and it's another to go to management and ask that they don't pay as much or defer payment to their sales people. That latter request, cutting costs and pissing off an entire department of sales employees, is what will make you look like management material.

Re:No comment...

[Anonymous Coward]

This is why I love South Africa.
Due to the (previously) high illiteracy rates among certain segments of the population, a verbal contract is legally binding...

Re:No comment...

[Anonymous Coward]

You mean he should do exactly what the guy you're replying to says he should do?

Change Incentive Structure

[wein0]

Having worked at EDS and a number of other technology organizations I believe that the incentive schemes shape behavior. Those EDS sales teams at BSkyB and other accounts mentioned would have received their commission cheques when the deal was signed. Deal Signed = $$$$$ Should their incentives and commission be paid in line with the delivery of major milestones and/or the delivery of the solution to the cost model and specification then there would be a little more focus on the technical components rather than just the commercial ones. For this to happen it would take an industry wide shift as EDS/HP, IBM, Accenture all pay the same way. If I were a client negotiating with any of these organizations I would demand that the sales team not get commissioned until my major milestones are met.. Money makes the world go round...

Re:Change Incentive Structure

[MemoryDragon]

Hey, dont change that, the company I work for does a good living by providing quality work, we usually come in when clients get frustrated with the big outsourcers and want someone who gets the work done instead of flooding you with salesdrones.

Birmingham (UK) City Council

[BancBoy]

At least they got the picture right for the website!
When they had leaflets made, they had the Birmingham Alabama skyline!!!
http://news.bbc.co.uk/2/hi/uk_news/england/west_midlands/7560392.stm

Re:No comment...

[CowboyBob500]

I'm not at all knowledgable about UK law but in the USA verbal agreements or promises are non-binding

Here in the UK verbal contracts are legally binding as long as it can be proved what was said (i.e. witness testimony). Written contracts can also be implicitly agreed to without signing them, e.g. if I received a contract of employment that had a clause in that I disputed, but turned up for work before the dispute was solved and the contract signed, then I will have implicitly agreed to the original version of the contract that included the disputed clause.

Re:No comment...

[micheas]

I am not a lawyer. This is not legal advice. And even if I were a lawyer, I am not your lawyer. That said, the limits on verbal agreements are pretty narrow in the US. Basically:

• Agreements to sell tangible property, such as a computer or car, worth more than $500
• Agreements regarding the sale of real estate
• Agreements that can’t realistically be completed in less than one year, such as a project with three six-month deliverables
• Agreements that someone else will pay you, such as when someone who does not have authority to speak for the company promises that the company will pay you
• Any transfer of copyright ownership

Are not able to be made with a verbal contract. Everything else goes. For example, multi million dollar stock transactions are done verbally every work day. (yes end of day settlement does turn into a he said she said discussion with millions on the line during market downturns.)

So, in the US a company sales team that promises that it can duplicate Google.com in six months for ten million dollars, could be screwed if the company cashes the check. Even if no executive officer signs off on it. (Then again a company that is depositing ten million dollar checks without oversight is screwed anyways.)

It doesn't have to be this way

[GordianusTheFinder]

Outsourcing companies and system integrators use a number of tricks to ensure the project is profitable whilst being the lowest bidder. These include:

• Removing highly qualified engineers from the team early and replacing them with new graduates
• Ensuring that changes to the specification are expensive
• Over-promising during the sales process

None of these is healthy and when it goes wrong, the only winners are the lawyers. I worked with a Major European Telco which outsourced the development of a large software system. It went wrong quite quickly and no useful code was delivered for two years while they sorted out the mess - expensive.

It doesn't have to be this way. The construction industry has similar issues with large projects, due to the same root causes. The collaborative contract for the construction of Heathrow Terminal 5 was very successful and resulted in the project being delivered on time and on budget, with very few disputes:

http://www.iaccm.com/contractingexcellence.php?storyid=368

I wonder if the IT industry will attempt to learn from this ...

Gord.

Re:Difference between what we can & what is pa

[Chris Mattern]

What happens a lot is that the sales people tell we can do A, B and C for you. Then pricing happens, and client is only willing to pay for A.
Contract is limited to A and closed. Then client figures out that in the end they need B and C.
Is that the sales peoples fault?

It is if the salesman promised them they'd be getting B and C after the contract is drawn up. And don't tell me that doesn't happen.

Re:Difference between what we can & what is pa

[arethuza]

Some sales guys really can't say "No" to the question "Does your system do this?" - I wouldn't have believed how surrealy awful this can get (at least from the perspective of the poor sod responsible for delivering the final working system) if I hadn't attended so many of these meetings over the years.

Re:No comment...

[mcvos]

If your employer's finances are so bad that not working 1-2 months of unpaid overtime will bankrupt them, I advise that you start looking for another job.

Even more so if the employer is unable to pay you for your overtime work.

It sounds like the company really wants to die, if they're unwilling to pay someone to save them.

Re:No comment...

[mcvos]

I'm not at all knowledgable about UK law but in the USA verbal agreements or promises are non-binding

In Netherland they are legally binding, but very hard to prove. You could have a case if you record the conversation, however.

Re:No comment...

[Anonymous Coward]

At least for EDS, which is the company that signed and executed the contract, the sales teams have a portfolio listing they are allowed to sell. This portfolio lists costs and options and timelines. Sales can't just make stuff up on the spot and promise it, even in an informal demo. Engineering prepares estimates and other basics to the sales teams. If sales sells something engineering can't deliver, it's engineering's fault for estimating poorly.

Of course, that's a generalized statement of how the process should be working - it seems like this contract was more nebulous. A rogue sales person from 2000 who probably no longer works at EDS could hardly be held responsible at this point, and they might not have had their stuff together back then. Point is, this case does not represent even a tiny fraction of how normal sales and execution happens.

As an aside, if a 10 year old contract which is obviously not clear enough that it can be judged in under 17 months can change the face of outsourcing, I'd be really quite surprised. I place first blame on the legal team of BSkyB, for not reviewing the contract for loopholes. One-sided contracts are legal, as long as they aren't obviously unreasonable. Someone should have seen this wasn't specific enough before it was signed.

Successful for EDS or the client?

[HornWumpus]

I'm looking at it from a client perspective.

The client getting raped and EDS going home with the money and not getting sued is considered success by EDS.

Bonus Driven Behaviours

[Anonymous Coward]

A big EDS problem was/is the bonus culture. Much as the top will tell you that the system delivers profit, it actually only delivered stellar revenue today without regard to long-term profitability. You have to recognise that EDS was formed by IQ100 computer operators offering to provide ‘your mess for less’ and never really did anything to advance the services delivered to users.

EDS had a really good commercial risk assessment system that forecast likely profitability, run by the numbers men, but you could lie! The bonuses were paid on contract signature, not just to the salesman and the management, but also to a swathe of the bid team. The share of the bonus was at the discretion of the ‘leadership’ – surprisingly, those that supported the ‘sales’ story made good; the sceptics got nought.

HP/EDS CRM expert lied about degree?

[littlekorea]

As if this story wasn't interesting enough, the exec responsible for the CRM system lied about his internet degree, and got it from the same institution as the prosecutor's dog, Lulu, who achieved a better score. Too funny.