From privacy breaches to ERP blunders and everything in between, there are lessons to be learned.

Johanna Ambrosio, Tech Journalist

October 13, 2006

4 Min Read

In addition to the multimillion-dollar technology mistakes made by Nielsen, McDonald's, Conseco, and the others we already told you about in our main story, check out these other IT catastrophes. Study them, learn from them, and hope not to repeat these major missteps.

Marketers 1, Techies 0 That's the way it looked as the Sony BMG digital rights management scandal unfolded last November. Unsuspecting consumers who bought rootkit-infested Sony music CDs wound up with trashed computers. The company's reputation took an even worse beating, and class-action lawsuits brought by state attorneys general, most of which have since been settled, could wind up costing Sony millions. It appears the lesson has been taken to heart, however; just a couple of months ago Sony released a DRM-free Jessica Simpson song and company execs have taken to trying to convince the music industry as a whole of the evils of DRM.

ERP Neither Sang Nor Danced The heyday of customers' wars with enterprise resource planning software was in the late 1990s, when household names from toymaker Hasbro to candy company Hershey, and sneaker-giant Nike were felled by the mighty ERP axe. Nike's deployment troubles caused it a quarterly revenue shortfall of $80 million to $100 million, the company said back in 2001. The software caused overproduction of some shoes, and underproduction of others, resulting in a big mess of sneakers, Nike said at the time, a charge that the vendor involved denied. The problems most everyone ran into, which still apply to huge, complex software projects today: the lack of a detailed project plan that includes why the software is being adopted and who's responsible for what, feature creep, and which parts of the business need to change which business processes.

System Management Tools Are Your Friends In January, the Tokyo Stock Exchange stopped trading 20 minutes earlier than scheduled because its computer systems were almost at capacity. A month earlier, a mistaken trade, which made some observers question the accuracy of the exchange's trading software, cost a securities firm billions of yen, and the exchange was unable to cancel the trade even after the mistake was discovered. And a month before that, trading was suspended because a software patch had been incorrectly applied to the trading system and caused the system to crash. The stock market president and CIO subsequently stepped down from their posts.

Hey, That's My Social Security Number You're Bandying About No tech-fiasco list would be complete without mention of the numerous data and privacy breaches in recent years. There have been too many to describe fully in a brief space, but recent major infractions include ChoicePoint, which unwittingly sold more than 163,000 customer records to fraudsters; the Veterans Affairs agency, which put personal information about over 28 million current and former active-duty soldiers at risk when a laptop with personnel records was stolen from a staffer's home; AOL's release of search data from over 650,000 subscribers; and, just last month, a stolen laptop from a General Electric manager with personal information about 50,000 employees. Repeat offenders include Citibank, whose Mastercard unit exposed over 40 million cardholders to fraud in 2005 and then in March admitted that hackers made off with PIN numbers of account-holders, and Ohio University, which had three data breaches in as many weeks.

I'm From The Government, And ... Three-plus years and $170 million in the hole, the FBI officially pulled the plug on its misguided Virtual Case File system. The software was supposed to make it easier for agents to share information and was a cornerstone of the Bureau's remodeling of its computer system to better deal with terrorism in the wake of 9/11. The idea itself hasn't died, though; the current goal is to replace the hodgepodge of home-grown systems with mostly off-the-shelf software and stricter procurement processes. And it's not all been bad news recently: the FBI recovered the VA's stolen laptop (see item above).

Even The Mighty Can Fall When the going gets tough, remember that even the cool kids can stumble every now and again. No less than tech giant Google has accidentally deleted its own company blog and has allowed hackers to post a fake notice and a school kid to post a fake press release. While none of this is on the scale of the other blunders on this list, of course, it's worth remembering that when complex technology and humans meet, something is bound to go wrong every once in a while.

Illustration by Dennis Kitch

Return to the story:
8 Expensive IT Blunders

Continue to the blog:
Tech Disasters Are Just Waiting To Strike Your Organization

Read more about:


About the Author(s)

Johanna Ambrosio

Tech Journalist

Johanna Ambrosio is an award-winning freelance writer specializing in business and technology. She has been a reporter and an editor in the computer industry for over 25 years, covering virtually every technology topic, starting with 'office automation' in the 1980s, as well as management issues including ROI and how to attract and retain talent. Her work has appeared online and in print, in publications including Application Development Trends, Government Computer News, Crain's New York Business, Investor's Business Daily, InformationWEEK, and the Metrowest Daily News. She formerly worked at Computerworld, for which she held various positions, including online director. She holds a B.S. in technical writing from Polytechnic University in Brooklyn, N.Y., now the Tandon School of Engineering of New York University. She lives with her husband in a Boston suburb. Johanna's samples of her work are at

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like

More Insights