Investment decisions on business transformation projects are tough, often demanding a huge leap of faith and a crystal ball to predict the future. Unfortunately, even when these projects fail, external consultants can still walk away with a big pile of cash.
As Inverclyde, one of the smallest district authorities in Scotland, has painfully learned, no organization is immune to risks associated with technology-enabled business transformation projects. After their project backfired, Inverclyde suspended senior managers in the following roles, according to local newspaper, the Evening Times:
- Corporate Director of Organisational Improvement and Resources at Inverclyde Council
- Head of Safer and Inclusive Communities
- Head of Customer Service and Business Transformation
- Head of IT project management
In February 2009, the Evening Times says, these folks announced a program called Future Operating Mode, intended to save Â£6.43 million ($10.6 dollars) over three years. Instead of creating savings, however, the plan flopped:
[C]ost the council Â£650,000 ($1.1 million dollars) in fees to consultants PricewaterhouseCoopers, and delivered only Â£250,000 ($413,000 dollars) in savings, far short of the expected Â£2m target.
While I don’t know the details, and there’s always two sides to every story, something sure seems wrong when a project fails and external consultants walk away with over a million dollars in fees.