2007/Jan/31

MINICASE 1 cia 675

Minicase 1 Do or Die

A direct cutover from an existing system to a new one is risky. If the system is critical to the operations of the organization, the risks are magnified to an even higher level. Yet Quantum Corp. (quantum.com), a Milpitas, California, disk-drive manufacturer, did just that-and lived to tell about it. The vendors and consultants on the project claim that this was one of the largest-ever direct cutovers of a distributed business system.

Quantum realized that it had to take action. The limitations of its existing systems were making it difficult for the company to compete in the disk-drive market. Sales representatives needed to determine how much of a specific item-in inventory or in production-had not yet been committed to other customers. However, because databases did not share information, it was very difficult for them to get this information.

Quantum was especially interested in a piece of information known as available-to-promise (AIP). This indicates how many units of a given item could be delivered, by what date, to specific locations throughout the world. Calculating these values requires coordination and realtime processing of sales, inventory, and shipping data. If Quantum implemented its new system by phasing in the modules one at a time, the conversion would take much longer. Furthermore, the system would not be able to provide this key information until the end of the transition.

Quantum felt that the business risks of this kind of delay were greater than the technical risks of a direct cutover. The company was also concerned about possible resistance in some departments if the full implementation took a long time. The departments had enough autonomy to implement other systems if they lost confidence in the new system and, if they did, Quantum would lose the benefits of having an integrated system.

Although the actual cutover took eight days, the planning and preparation required over three years. The initial analysis was in October 1992, and Quantum sent out requests for proposals in April 1993. In March 1994, the company chose Oracle, Hewlett-Packard, and Price Waterhouse as its business partners on the project.

Quantum created a project team of 100 people, composed of key employees from each business unit and the IS department, and moved them into a separate building. The purchase of the disk-drive business of Digital Equipment Corp. in October 1994, which brought in another set of legacy applications and assorted hardware platforms, set the project back by about four months.

In February 1995, Quantum started a public relations campaign with a three-day conference for the users. The following month, "project evangelists" made presentations at all organizational locations.

In August 1995, the team conducted a systems validation test. It failed. The team worked intensely to solve the problems and then tested the system again for four weeks starting in December 1995. This time, it was successful.

In March 1996, Quantum provided a very extensive and absolutely mandatory user-training program. In April, it conducted final briefings, tested the system at all locations throughout the world, and set up a "mission control" center.

At 5 P.M. on April 26, Quantum shut down the old system. Hank Delavati, the CIO, said, "Business as we know it stopped ... we could not place an order, we could not receive material, we could not ship products. We could not even post cash." Data records from the old system were loaded into the new system. At 4 P.M. on May 5, the new system started up successfully.

Mark Jackson, an executive vice president at Quantum, noted afterward that the relatively large project budget was not the company's primary concern. He said, "We could have figured out how to save 10 percent of the project's cost ... but that would have raised the risk to an unacceptable level. To succeed, you have to spend the money and take care of the details."

Source: Condensed from Radosevich (1997) and quantum.com

(2003).

Questions for Minicase 1

1. Estimate Quantum Corporation's chances of survival if this project failed. Provide some reasons to support your estimate.

2. What did Quantum do to minimize the risks of this direct cutover?

3. Evaluate the claim that, because of business and organizational issues, this direct cutover was less risky than a phased conversion.

4. Under what, if any, circumstances would you recommend this kind of direct cutover for critical operational systems?

5. Discuss the impact of this project on the internal power relationships between the IS department and the other departments in the organization.

6. It appears that Quantum spent a substantial amount of money on this project and was willing to increase spending when it seemed necessary for the success of the project. Discussthe risks of a "whatever it takes" approach.

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