It's probably just coincidence that I was hearing sirens out the window as I was reading Michael Krigsman's post on emergency vehicle manufacturer American LaFrance blaming IBM for its recent bankruptcy, but I took it as a sign I should post a link to the article.

The basic situation, which Krigsman outlines in more detail, is that American LaFrance (ALF) was spun off from Freightliner, the parent corporation which had been providing all IT systems for the subsidiary, and contracted with IBM to provide a shiny new ERP system with which to run the business on its own. Shortly thereafter, the ERP system roll-out, as many ERP system roll-outs do, went pear-shaped and ALF found itself unable to produce quality products to fill orders in an environment where orders were already declining and major facilities transitions were also encountering problems. Add it all up and you have a visit to bankruptcy court.

I don't suppose it's news to anyone who regularly reads this blog that serious IT troubles can put a business in an extremely disadvantageous position; we who have our fingers in the IT spaghetti can see all the ramifications pretty clearly. But it's unusual to suffer IT issues to the extent that they will completely put a company out of business, and so I agree with Krigsman that all this is the result of an unlikely confluence of factors which combined to put ALF on its back.

Still, it does point to the dark, ugly place one can wind up when insufficient attention is paid to mission-critical IT systems, and if the outcome is unusual, it illustrates how much money is wasted in other businesses with similarly failed projects. The mismanagement of the implementation by the vendor, and the lack of oversight by ALF management, are hardly unusual in this industry... I'm not sure that the fact that you aren't driven to bankruptcy by it in most cases is really much of a victory for the CIO presiding over such debacles.