Bridgestone versus IBM Part 2 -- Governance
Links to previous articles at
the end of this
Bridgestone are suing IBM for
US$600 million for damages resulting from a botched
business systems implementation. IBM are fighting
The damage to Bridgestone was
huge, unable to fill orders inventory piled up to the
extent that they had to hire extra warehouse space,
frustrated and angry customers, customers going
elsewhere, every CEO's nightmare and yet Bridgestone
thought they had gone the safe route of IBM and
This series of articles analyses
in detail what went wrong and how you can avoid making
the same mistakes in your organization.
In this article I look in detail
at the major governance problems associated with the
Bridgestone project and outline a robust approach to
managing projects of this nature effectively.
also look at major flaws in the procurement process and
how to avoid these.
The first article provided an overview of the Bridgestone versus IBM
business systems failure in which Bridgestone are suing IBM for US$600
million in damages.
The article introduced the topic and then headlined each of the
major components of the situation based on my "Critical Factors" approach.
This article goes into more detail with regard to the Governance and Procurement aspects of the project failure.
previous article stated that the fact that
Bridgestone's existing systems were written in
Cobol did NOT constitute a valid business reason to
change their systems and referred to further
material on my website
that elaborates on this point.
2. Governance -- the BIGGEST single cause of failure
OK, so Bridgestone decided for good or bad reasons to change.
went with SAP because SAP is supposedly THE leading
brand although a look at my Failure
has SAP occurring rather frequently.
went with IBM because IBM is a household name and surely
to be trusted -- although a look at my Failure
has IBM also occurring
Two supposedly good reasons for the executive of Bridgestone to believe they were making a good decision -- SAP and IBM!
So, what went wrong?
Well, Bridgestone had some
governance problems -- they are alleged to have
replaced their Chief Information Officer no less than SIX
TIMES in two years during the project!
Inspecting the "Bridgestone
USA Executive Bios
" page we find that there is NO Chief Information Officer on the Executive team.
After some digging on Google I was unable to establish who the CIO
reported to but it seems clear that the Chief Information Officer was
NOT really a "Chief".
Yes, it IS so that in about 70% of cases the Chief
Information Officer reports to a member of the executive team, most frequently the
Chief Financial Officer -- because somehow businesses mistakenly believe the
CFO is better qualified to manage the systems that run the company than
One of the reasons there is so much failure and so many sub-optimal
outcomes is exactly because the CFO has NO formal training that in ANY
way equips them to manage technology.
IF you are NOT prepared to have the IT Manager -- a person who reports
to a C level executive who reports to the Chief Executive is NOT a Chief
Information Officer, they are an IT Manager and calling them a CIO does
NOT make them an executive. Sitting them at the top table with a
reporting line directly to the CEO and operating on a FULL peer basis
with the rest of the executive team is what determines if a manager is a
So, it seems probable that Bridgestone changed its IT Manager six times during the two year project NOT their CIO.
Thus IBM have some basis to allege lack of leadership on several fronts.
Most importantly, the so-called OTC (Order to Cash) project involved
almost the entire spread of the business. The custodian of this
integrated view of the business and the ONLY person with the muscle to
make decisions stick across multiple operating components of the
business is the CEO.
Since the CEO does NOT have the knowledge or the time to manage
a project of this size and complexity they need an advisor and
Project Leader -- someone to direct the project. This needs to be a person
who has done this before, a gray beard so to speak, someone at least
over 50 years of age who specializes in managing this type of project on
behalf of the client. The IT Manager simply does NOT have the
clout and, in all likelihood does NOT have the experience to manage
something like this.
Remember that when you put in place a massive new integrated system
it touches just about every part of the business, it touches just
about every person in the business and, by definition, it RIPS THE GUTS out
of the business and replaces them with something that is
supposedly better. The Bridgestone debacle provides graphic evidence of
what happens when you rip the guts out of the business in a badly planned
and badly managed project -- you cannot ship product, you lose customers,
you lose millions of dollars!
IF you get the picture of what can go wrong you will recognize that for
ANY organization embarking on a project of this nature pretty much the
FIRST thing you do is go out and find a REALLY senior, REALLY
experienced expert who has done this a number of times before and knows
what works and what does NOT work. Make sure that they have
rapport with the CEO, make sure that they demonstrate intuitive
understanding of YOUR business and then bind them contractually for the
duration and give them an open door to the CEO as an Interim Executive.
On the face of all the evidence Bridgestone did NOT do this
-- probably because no one told them it was necessary -- probably because almost no
one does it that way which is a major reason why so many projects fail
or come in seriously short of expectations.
That said there was obviously something TOXICALLY WRONG with the
way Bridgestone were managing their IT Manager -- remember, since he or
she was NOT on the Executive Team they were NOT really CIO -- that alone
could be enough reason for all the resignations. Bridgestone
embarked on a massively complex and very large project and, seemingly
put a lot of responsibility on this person they called CIO and then did
NOT give that person the muscle and support needed to do the job.
OR did something else that made the position totally untenable.
A recipe for failure!
So, does that let IBM off the hook?
NOT from where I sit.
Given that there clearly WAS a problem, it is a key element of IBM's defence, then IBM should have done something about it.
Something like raising a "red
flag" on the project and advising the CEO that in
the absence of a robust and sustainable solution to the
CIO problem they would have to cease work and withdraw
their team until a suitable person was put in
place. But that would have been bad for planned
revenue so I am guessing that typical IT person temerity
(people who are good with computers are generally NOT
good with people, particularly when faced with conflict)
coupled to quarterly revenue target driven greed got in
the way of IBM's integrity
That is a major problem with the business information systems industry,
for the most part it is driven by people who are in the game for the
money and NOT for the passion of exceptional solutions delivered to high
quality standards that meet or exceed client expectations and come in
on time and on budget. The folk who are turned on by good
solutions generally do NOT make it to the top. So, if your
fundamental commercial driver is NOT aligned with a quality outcome you
will make technically BAD mistakes. It seems that IBM did this.
After all, it seems they were working with an IT person who
was punching below IBM's weight and Bridgestone, according to their
pleadings, was counting on IBM to provide the wisdom and maturity
necessary to deliver the required outcome. Problem is that in this
case IBM were, seemingly both the main player AND the referee, because
there was NO in-house referee of any substance, they changed on average
every four months and you CANNOT learn about the business or the project
in four months let alone manage a major player like IBM.
Not to mention deal with whatever ugly governance toxicity caused all your predecessors to leave!
So, YES Bridgestone were at fault and NO that does NOT exonerate IBM
-- they should have intervened one way or another to stabilize the
situation. Perhaps they were cutting costs and deploying light
weights on their side too? Bridgestone allege they were.
The lesson for your organization?
Make the CEO responsible -- see my material on Executive
Appoint a highly experienced expert to run the project
on behalf of the client and have that person report VERY
closely to the CEO in an Interim Executive capacity with
a VERY tough mandate to act on behalf of the CEO and a
strong contract for the duration of the project
-- see my article on "The
Art of Project Leadership
" for some suggestions;
c. and ... see the sections that follow.
James A Robertson and Associates
offer a range of services directed at enabling clients
to put in place comprehensive measures to prevent the occurrence of
the sort of problems experienced by Bridgestone starting with procurement, through
contracting, discovery, solution design, construction, configuration, laboratory testing, certification and
deployment with solutions designed to give lasting
high value low life time operating
cost outcomes -- this includes offering the Project Leadership service referred
to in this article
I also offer short, sharp
diagnostic interventions to determine why your business
system, department or project is NOT delivering or is stalled
plus easy to understand actionable advice on how to turn the
situation around and, where required, taking charge and turning a stalled project
The diagnostic can be
extended to providing expert witness services where
will also give you an independent evaluation of the health of your
existing systems and give guidance on whether they need to be replaced
click here to email me for more
3. Procurement -- securing a robust, tough and enforceable contract
the fact that Bridgestone are litigating against IBM one
has to conclude that the contract was shaky. In
fact, if one reads the full
it is apparent that whatever contract existed did
NOT have teeth.
One of the reasons that the construction industry consistently produces
high quality deliverables is that the construction industry makes use
of well-established tough contracts that provide all the basis necessary
for legal action against the contractor in the event of failure or
sub-optimal outcomes. So litigation is seldom required.
Signing the contractors contract, as it appears that Bridgestone did,
after all everyone does it, is the first step in a journey to a
sub-optimal outcome. Having that contract signed by an IT Manager
dressed up to look like a CIO is a recipe for disaster.
Before you can sign a tough contract you must follow a
tough procurement process. From the documents it appears that IBM
were appointed on a "sort of negotiated basis", they were already there, they
drew up the requirements specification and then negotiated to execute
it so, in a sense, they were again judge and jury.
For procurement to lay a foundation for a successful project:
a. It is vital that the CEO has first appointed their tough interim
executive Project Leader / Project Director, someone with a large amount
of procurement experience;
b. It is also vital that the procurement takes place against a tough and comprehensive procurement pack;
c. with at least three to five bidders;
d. with a tough multi-stage adjudication procedure;
e. resulting in a tough contract.
of the requirements for such a procurement approach on
Such a contract must lock the contractor into a fixed price for a clearly defined business outcome.
It must contractually bind provably competent contractor personnel individually to the project for the duration.
must provide for detailed discovery
BEFORE the price is finalized
and the contract is signed so that there is NO room for "change of
There must be a comprehensive and highly detailed project plan
and "Bill of Services" such that there is NO ambiguity about what the
contractor quoted to do and how much they quoted for each component so
that in the event that there really IS a legitimate basis for a
variation order this can be managed effectively.
Please read the material
on my website
for more information.
James A Robertson and
Associates offer a range of services directed at
enabling clients to put in place comprehensive measures
to prevent the occurrence of the sort of problems
experienced by Bridgestone starting with procurement,
through contracting, discovery, solution design,
construction, configuration, laboratory testing,
certification and deployment with solutions designed to
give lasting high value low life time operating cost
outcomes -- this includes
offering the Project Leadership service referred to in
I also offer short, sharp
diagnostic interventions to determine why your business
system, department or project is NOT delivering or is
stalled plus easy to understand actionable advice on how
to turn the situation around and, where required, taking
charge and turning a stalled project
4. The Business Process Myth -- irrelevant, distracting and DANGEROUS
Absence of engineering rigor -- sloppy projects and sloppy solutions
6. Lack of formal Business Simulation Laboratory testing
7. NO certification
8. NO roll-back plan
From the documentation there are other factors.
Consideration of my factors
relating to "The
REAL Issues in Business Information Systems"
-- the factors causing failure and the Critical
Factors for Success (the subject of my book
-- available on the website together
with the course of the same name ) will give you many more pointers to what went
wrong and how YOU can avoid a similar catastrophic
outcome for your organization.
that "if you do what you have always done you will get
what you have always got, in this case, if you do
what the IT and Business Information Systems / ERP
industry has been doing for the last twenty years you
will get what they have been delivering for the last
twenty years -- expensive projects that run over
time and over budget and deliver sub-standard outcomes
or outright failure.
I suggest for your consideration
that there IS a better way that will deliver MUCH better
outcomes, see my article on "What
does a HIGH VALUE Business Information System Solution
" for more ideas.
This outcome is an outcome
in which every aspect of the business runs smoothly, efficiently
and effectively. The systems "flow" with the business and most
activities take LESS time than they did previously.
Most importantly executives
and managers have a wealth of strategic, operational and tactical
management information available literally at the touch of a
button. Information that is of the highest quality and entirely
Executives and managers have
time to be more creative and the business is able to sustain greater
production, sales, etc with existing headcount or headcount has reduced
by natural attrition over a year or two.
The business is booming,
it is growing faster than it did before, new customers, new products, new
All of this traceable back to the new systems that have been expertly
configured to EXACTLY model the real world in which the business
operates such that the systems are easy to use and FLOW with the
This is what IBM should have delivered to Bridgestone and failed!
Please browse my website for more
information, the home page, http://www.James-A-Robertson-and-Associates.eu
will give you a good
overview of what I am advocating and help you to navigate the entire
Back issues of articles in this series are listed at the end of this email.
lists all the webpages on the site, there is a lot of deep content that is NOT immediately visible.
contains well over 150 articles on diverse topics.
provides alphabetic keywords linking to many of the articles
The Conference page lists around 90
conference presentations, nearly all different with around
40 of the presentations live on the site on the child pages for
you to view and download -- email me if there is a presentation you
would like that is not on the site.
If you would like to know more
about me there is detailed
information on the website and further detailed
information on LinkedIn
Visit the Testimonials
page to hear and read what clients and others have to say about me
Diagnostic Pulse Measurement
offer a concise diagnostic "Pulse
" light touch, high impact investigation
that in the space of a day to ten days for most organizations, depending
on client organization size and problem complexity, will deliver you
a concise face to face report together with a supporting written report
that will accurately diagnose what is wrong with your current systems
OR your project OR your IT / IS Department and prescribe understandable,
meaningful and actionable treatment for the conditions I identify.
I offer a full range of services to implement my recommendations.
This same service can be used to evaluate whether you REALLY need to
replace your existing systems or not.
I look forward to being of assistance to you.
Dr James Robertson PrEng
James A Robertson and Associates Limited
Assisting clients to thrive through effective and efficient application of Business Information Systems
Articles published so far in the article series to which this email refers:
Strategic Essence -- The Missing Link in Business Information Systems
A discussion of how strategic essence should inform ALL business
improvement projects and particularly business information system
projects. This thread discusses the analysis of strategy, the
planning of strategy and feeding strategy through into business system
specifications and the management of business improvement
projects. Articles to date include:
The Essence IS Different
Strategic Essence is the Point of Departure
Determining Strategic Essence
The Real Issues in Business Information Systems
A discussion as to why business information systems fail to deliver on
expectations or fail outright. Coupled to discussion of the
Critical Factors that must be taken into account in order to achieve
successful outcomes. This thread is progressively discussing more
hands-on specifics of achieving high value outcomes and builds on the
Strategic Essence series. Articles to date include:
Mythology and Lack of Executive Custody
Lack of Strategic Alignment and Lack of Precision
Strategically Enriching your Business Information Systems
Discussion of practical specific measures that can be taken in order to
greatly improve the information yield of business information systems
at both the operational and executive strategic level. A number of
simple steps that can be taken immediately and more complex measures
that can be taken over time.
thread is discussing increasing business system and data
warehouse value yield using techniques that lead to
significantly improved business intelligence capability,
including support for the ability to "obtain answers to questions we had
not previously thought to ask
". This builds on the content in the Strategic Essence and Real
Issues threads. Articles to date include:
Principles of Data Engineering
Steps in Applying these
Robust Business Information Systems Procurement
In order to fully apply the methods and principles discussed in the
threads above with regard to new systems it is vital that a robust and
effective approach to procurement is applied. This requires a
tough procurement approach directed at achieving a tough business
outcomes orientated project that ensures a high value outcome.
This thread discusses the components of such a procurement
approach. The individual documents and processes that make up the
approach are outlined. Thereafter the components are discussed in
more detail. Articles to date include:
Bill of Services, Laboratory, Go-live Certificate,
Executive Engagement, Bid Compliance, Adjudication and
Critical Lessons from Real Life Business Information Systems Failures
Comment on some of the dramatic business information system investment
failures of recent years. Articles to date include:
The BBC Digital Media Initiative £100 million
Bridgestone versus IBM -- The REAL Issues --
Business Systems NOT delivering?
Call the Business Systems Specialist
Dr James A Robertson -- has been involved in the effective application of Business Information Systems, including but NOT limited to ERP, since 1987 and in the profitable and effective use of computers in Business since 1981.
Drawing on a diversity of experience, including formal military training in Quick Attack techniques at the Regimental Commander level, Dr Robertson has developed highly effective methods of investigating any sub-optimal Business Information Systems situation -- be it an established system or a stalled project or any other source of Executive frustration -- quickly and concisely diagnosing the root cause of the problem and prescribing concise practical actions that Business Executives can effectively act on see the Pulse Measurement page and also the Sample Reports page for redacted real reports.
He has also developed highly effective methods of strategically enriching systems to unlock the full potential of existing investments, see the Precision Configuration page and couples this to architecting small pieces of clever software that harness the full potential of your investment, see the Software page.
If you are having problems with your systems, your project or your IT Department, call The Business Systems Specialist
Business System Failure is RIFE -- we offer insight into why this happens AND WHAT is required to prevent it.
Failure is at epidemic levels with massive damage done to client companies -- if you are NOT aware of the extent of the problem please visit the About Failure page for a catalog of major failures running to billions of Pounds and Dollars.
All evidence indicates that the established players do NOT know how to deliver stable, reliable high value solutions that WORK.
There HAS to be a better way!
This website provides information relating to that way with a large collection of white papers, presentations, standards documents, etc that you can use to start bringing the situation under control
We also offer high level advisory services with regard to the application of the principles advocated on this website
We offer an ENGINEERING APPROACH to addressing these issues
By Engineering I mean the formal, structured, highly disciplined, highly systematic, highly practical approach that consistently delivers results in ALL areas of human endeavor where formally trained and certified engineers are the ONLY practitioners permitted to operate -- think large buildings, factories, motor vehicles, aircraft -- highly complex systems that work at a level that we take it for granted that they WILL work and where failure is all but unthinkable and, when it happens, attracts immediate public attention and rigorous investigation directed at ensuring that such failures are prevented in the future -- in fact, everything that the management consulting industry that implements complex software systems is NOT
This approach is discussed further on the Engineering Approach page.
In 2003 I undertook an in-depth analysis of all the information and experience that I had gathered with regard to the factors giving rise to Business Information System failure including ERP and general IT and classified this information into a number of categories including "The Factors Causing Failure" and "The Critical Factors for Success" based on this I developed a two day Course "The Critical Factors for Information Technology Investment Success" which is still offered today.
Based on this I wrote the book of the same name, which is available in electronic form here for download:
Click here to send us an email subscribing to our free newsletter -- all articles posted by James Robertson will be emailed to you
James has a very detailed profile on LinkedIn should you require further information about him.
You can also connect with him on LinkedIn at http://www.linkedin.com/in/DrJamesARobertsonERPDoctor
James has an open networking profile -- click on "Connect" and use email address James@LinkedIn-at-JARA.com.
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There is a large body of white papers, articles and other content produced by Dr James Robertson available on this website
Please click here to visit the detailed listing of articles
About Dr James A Robertson PrEng -- The Business Systems Doctor -- and Other Topics
Catalogue of Major Business Information System Failures
About the Engineering Approach
James Robertson's Value Add
Attributes of a HIGH VALUE solution
Recognizing Business System Failure
The Critical Human Foundation
Old Software IS Viable
From South Africa
Competencies of Dr James A Robertson PrEng
About Professor Malcolm McDonald
Table of Contents
About my relationship with the Almighty Creator, Yah the Eternally Self-Existing
Comments relating to the Business Systems Industry and other topics
Testimonials and other positive material regarding James Robertson
List of Articles
Achieving High Value Business Information System outcomes
Executive Custody -- What is it and HOW do you get it?
The REAL Issues in Integrated Business Information System Success
Part 1: Introduction
Part 2 -- Mythology and Lack of Executive Custody
Part 3 – Strategic Alignment and Precision Configuration
Why your ERP is NOT delivering and HOW to FIX it
IT Project Management
CEO Anthony Lee Comments on his experience of the Pulse Measurement
No Charge Guarantee on the Pulse Measurement Service
Examples of Pulse Measurement Outcomes
Critical questions regarding the Pulse Measurement™
The Pulse Measurement Workflow
The Critical Factors for Business System (ERP+) Investment Success in the Pulse Measurement
Indicative Pulse Measurement Durations
What is a JAR&A Pulse Measurement?
Survival of the fittest – why it makes sense to measure the pulse of your business
Examples of Pulse Measurement Outcomes over 24 years
Sample Pulse Measurement Reports
Strategic Essence: The Missing Link in Business Information Systems
Strategic Essence: Overview
Strategic Essence: Part 1 -- Strategy Defined
Strategic Essence: Part 2 -- Differentiation
Strategic Essence: Part 3 -- The Essence IS Different
Strategic Essence: Part 4 -- The Essence should be the Point of Departure
Strategic Essence: Part 5 -- Discovering Strategic Essence
Strategy -- the Essence of the Business: What is it and how do you develop actionable strategic plans?
Simple Steps to Increase the Strategic Value of your ERP Investment
Free Strategic Snapshot Toolset and Manual
A strategy focused planning system beyond traditional budgeting
Tough IT and ERP Procurement and Contracting that Works
Robust Business Systems Procurement
Part 1 -- Introduction
Part 2 -- Bill of Services, Laboratory, Go-live Certificate, etc
Part 3 -- Executive Engagement, Bid Compliance, Adjudication and other matters
Guidance and Advisory Services
The Art of Project Leadership
Why Regular Communication with the CEO is Vital
The Business Simulation Laboratory
Precision Configuration and Strategic Business Information Architecture
Precision Configuration based on Strategic Engineered Precision Taxonomies
The JAR&A Cubic Business Model
Highly Structured Strategic Chart of Accounts -- a Vital Element of your Corporate Information Arsenal
The Product Catalogue -- an Essential Element of any Precision Configuration
Attributes -- answers to the questions you have NOT yet thought to ask
Case Studies of Notably Successful Projects with high value Precision Configuration
092 Doing things differently and better -- ASCO Case Study 2-- BPM Summit 2013
088 Strategic ERP Invesment -- ASCO Case Study -- Service Management Conference and Exhibition Africa
026 Information Architecture and Design of FIS for Rennies Group -- Financial Information Systems Conf
018 CRM Risk Control: Designing and Implementing an Integrated Risk Mgmt Sys -- Integrated Risk Mgmt Conf
011 V3 Consulting Eng: Benefits of MIS to Professional Practice -- SAICE 15th Ann Conf on Computers in Civil Eng
Part 2 -- Principles of Data Engineering
Part 3 -- Steps in applying these recommendations
Simple Steps to increase the strategic information value yield from your Business Systems Investment
The Full JAR&A Taxonomy Manual
Part 1: Introduction, Problem Statement, Definitions and Examples
Part 2: Why Use JAR&A, Required Knowledge and Experience, Cubic Business Model and Chart of Accounts and Taxonomy Software
Part 3: How to do it, Case Studies and White Papers and other References
Example General Ledger Manual
Business Process -- Irrelevant, Distracting and Dangerous
The RIGHT Approach
Custom Strategic Software Design and Oversight of Construction
Standards for Custom Software Specification
What IS Software?
Critical Factors for I.T. Success
A Moral and Ethical Dilemma -- Systems that Fail
Case Studies examining Business Information System failures
The BBC Digital Media Initiative Debacle
The Bridgestone -- IBM Conflict
Speaking and Training
Showcase of Conference Presentations
Most Viewed Presentations
Briefings and Seminars
Why your ERP/BIS is NOT delivering and HOW to FIX it
ERP and IT Procurement that Delivers Results
The Critical Factors for IT and ERP Investment Success
Conferences and Public Presentations
Conferences 80 to 99 -- 2009 to Present
Conferences 60 to 79 -- 2005 to 2009
Conferences 40 to 59 -- 1996 to 2005
Conferences 20 to 39 -- 1994 to 1996
Conferences 01 to 19 -- 1989 to 1994
On-Line Seminars (Webinars)
Webinar on Preparing and Presenting Webinars
Contacting James A Robertson and Associates Limited