CIO analysis: Marin County vs. Deloitte and SAP, part 2

CIO analysis: Marin County vs. Deloitte and SAP, part 2

Summary: This post is part two of a series examining implications of Marin County’s lawsuit, against Deloitte Consulting and SAP.


This post is part two of a series examining implications of Marin County’s lawsuit, against Deloitte Consulting and SAP, on the enterprise software ecosystem. Also read part one, which explains why this case is important.

Related: Marin County claims racketeering against Deloitte and SAP, part one

Marin County's lawsuit against Deloitte Consulting and SAP raises important issues relevant to enterprise software buyers working with virtually all software vendors and system integrators. This case illustrates how conflicting goals and agendas, coupled with misaligned incentives, can drive failure rather than success on business transformation projects.

Because these relationships are so fundamental to technology-related business transformation projects, the topic deserves careful study. For this reason, I use the IT Devil's Triangle concept to help explain interlocking, overlapping, and conflicting agendas among enterprise customers, software vendors, and system integrators.

Related: Exploring the Devil’s Triangle The IT failures blame game (part 1) The IT failures blame game (part 2) ‘Pain chains’ and the IT Devil’s Triangle

Business transformation projects are complex undertakings that involve multiple stakeholder groups and project participants. In theory, all these groups should work together toward a common goal, which is supporting the customer's business objectives. In practice, however, each group may possess divergent goals and mutually exclusive metrics for defining success, which leads to conflict.

Although Marin's lengthy lawsuit (PDF download) makes many points, it raises three key issues:

  • Marin claims it had little knowledge of ERP, and therefore relied completely on Deloitte to perform the implementation
  • Deloitte allegedly misrepresented its capabilities to complete the implementation work successfully
  • SAP was allegedly complicit because, the lawsuit claims, it knew Deloitte had a track record of failed public sector implementations

Because Marin's legal position is so extreme, it provides an excellent platform for defining reasonable expectations among members of the IT Devil's Triangle.

Enterprise buyer issues

With respect to buyers, the fundamental question is: "What is the customer's responsibility when working with external software vendors and system integrators?"

Marin's position seems to imply that all responsibility lies with these external vendors, because the county had "little or no prior knowledge of SAP software or experience with complex ERP implementations."

On the surface, this position perhaps seems reasonable; however, enterprise implementations always require shared involvement between a customer and its vendors. Therefore, such an extreme position bears little connection to the requirements of actual software deployments. The question is where to draw the line on responsibility.

Part three, which is coming soon, suggests reasonable boundaries of responsibility among major participants in enterprise business transformation projects. Legal issues aside, these are matters of practical concern for which there are no easy answers.

CIO perspective. Scope and boundary issues related to responsibility are difficult to define precisely. Often, resolution across the gray areas depends on context and good will among the parties. Wise CIOs will formulate a reasonable view on these relationships, recognizing that give and take is critical to success. As this lawsuit demonstrates, rigid adherence to self-interested positions yields nothing but trouble for everyone concerned.

Topics: CXO, SAP, Software, IT Employment

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  • I'd Like to Think Corruption is Not the Norm

    Lets not forget that Marin County is charging Deloitte with corrupting the project overseer to accept milestones as complete when they weren't, pay invoices on disputed interim deliverables, authorize inappropriate change orders, and approving continuing with Release 2 when the implementation team wanted to halt and seek satisfaction on Release 1.<br><br>In addition, the county is also claiming that this influence over the project overseer was gained by:<br>* Lavish dinners paid by Deloitte<br><br>* Overtures of employment by Deloitte at critical junctures <br><br>* Eventual hiring by SAP Public Services, Inc. <br><br>To me, these acts don't appear to fall within the usual category of issues of "shared involvement" by vendor and customer.
  • The more things change, the more they stay the same!

    After some 40 years in the IT and consulting industries and now retired, I am still surprised me to hear the superficial debates on IT project failure. <br>There is nothing unique about IT projects. <br>This project is no different to where, for example, an old established manufacturer, wants a new widget plant. They have no plant design expertise in-house, but they contract XXX who is well known in their type of industry to supply the plant hardware. and they contract YYY engineers to build, install and commission the new plant. <br>They take the opportunity to update their widgets which entails some changes to the standard plant units.<br>It is a disaster.<br>Why?<br>1. Management of requirements/design process.<br>2. Management of the tender/contract negotiations.<br>3. Management of construction stage.<br>4. Management of the the implementation stage.<br>5. MANAGEMENT of whole project.<br>If you haven't got the expertise, hire it, and if there are multiple suppliers make sure that the project manager has ultimate control.<br>The more things change, the more they stay the same!
    • RE: CIO analysis: Marin County vs. Deloitte and SAP, part 2

      @shafran@... This. An IT contract is not a unique animal. It is a contract to build something. If you can't agree on what you will provide, and do the up front work to explain what you need, you're inviting a disappointing or worse result.
      Mark Slater