FAIL – System failures, software bugs and IT Strategy

IT Failures have been getting a lot of press recently:

A large health insurance company was reportedly banned by regulators from selling certain types of insurance policies in January of 2009 due to ongoing computer system problems that resulted in denial of coverage for needed medications and mistaken overcharging or cancelation of benefits. The regulatory agency was quoted as stating that the problems were posing "a serious threat to the health and safety" of beneficiaries.

In August of 2008 it was reported that more than 600 U.S. airline flights were significantly delayed due to a software glitch in the U.S. FAA air traffic control system. The problem was claimed to be a 'packet switch' that 'failed due to a database mismatch', and occurred in the part of the system that handles required flight plans.

A major clothing retailer was reportedly hit with significant software and system problems when attempting to upgrade their online retailing systems in June 2008. Problems remained ongoing for some time. When the company made their public quarterly financial report, the software and system problems were claimed as the cause of the poor financial results.

What’s going on here?

Well, for one thing, IT failure is nothing new.  Major technical systems have been making a mess of business processes improvement since the dawn of big iron.  However, the actual exposure of end customers to those errors has only recently become a critical issue. 

While IT has been an “integral” part of the business for the last three decades, it has only been since the emergence of the customer facing web service and the real-time linkage of software solutions to mission critical business processes that have really gotten us into trouble.

We have three opposing forces at work:  reducing cost, increasing complexity, and improving responsiveness.  Business at warp speed demands responsiveness.  And responsiveness drives increased complexity.  But complexity and reducing cost are inversely related.   The challenge for IT strategists is to thread the needle, and if the stories above are any indication, many teams are challenged.

The good news is that tools and processes are finally emerging in our industry that are reducing the likelihood of failure.  Strategic IT Planning solutions are now able to document use cases that can reduce risks and complexity while also driving down costs. 

In the next column, I hope to be able to share some major new industry analyst research in Strategic IT Planning that will further this discussion.