Wednesday, April 08, 2009

Can IT destroy a business?

Can the £3bn downfall of the Dunlending Building Society be blamed on a £30m IT Project?

Just why did Dunfermline sink £31m into unproven IT project? (The Herald, 27 March 2009),
£30m IT Project Helped Drag Dunfermline Down (eWeek Europe, 30 March 2009) via Theo Priestley.


It certainly seems that the building society profits were cancelled out by the losses on this project. This raises several questions. Why was an organization spending such a large proportion of its profits on a single IT project? Why was the organization making so little profit from such a large loan book, and was the IT project expected to make a big difference?

Wind the clock back five years, and we can find a fairly typical account of the project from the prime vendor - Temenos, the banking software company. Compare its enthusiasm in the May 2004 Newsletter (pdf) with its current dry statement.

I shall bear that contrast in mind when I read vendor case studies in future.

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