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How IBM Conned My Execs Out Of Millions

By tyates in Technology
Wed Sep 28, 2005 at 06:01:40 PM EST
Tags: Software (all tags)

This is a first-person account of how IBM was able to con my execs out of millions of dollars. Gullible management tries to swim with the shark and gets chewed to pieces. Witness the exec-level FUD sales techniques and the $325/hr subcontractor labor bait and switch.

My Story

Last year, I worked as part of a project management office for one of the biggest defense contractors in the world. I was a contractor myself, getting paid by the hour to help them with project planning, forecasting, status, and other PMO and IT advisory functions. So when IBM conned them out of millions of dollars, I was sitting right in the front row.

The Setup

Thanks to Gulf War II, this defense contractor was growing like mad, despite the fact that it already had 120,000 employees and $30 Billion in Revenue. It now had the financial resources to take on major internal IT projects that it had been dreaming about for years. I worked on one of these, an enterprise-wide Portal and Knowledge Management project.

One of the criticisms of Knowledge Management is that it is just a new way to sell the same old products. Vendors take an online message board, bundle it with an off-the-shelf document management system and an intranet search, call the whole thing a "knowledge management system", and then sell it to you for millions. My take on knowledge management is that it's a good idea that's been overhyped and oversold, like Business Intelligence or Customer Relationship Management.

When I started on the project, they had already selected most of the vendors. Opentext for document management. Verity for Search. Microsoft for Directory Management. Netegrity for single sign-on. And IBM for the Portal.

There was one IBM consultant on site, and a second would show up occasionally. The first was a project analyst. His stated job was to make sure that all of the software interoperated with the portal, and to help with the overall project planning. But we never got any real planning or analysis out of him. He spent most of his time selling.

Vendor selection, when done properly, is very difficult and time-consuming. This IBM consultant's job was to stop the process in its tracks. Whenever management was trying to select a vendor, or even having second thoughts about a vendor, this consultant would offer senior management the solution to their problems. Management, in a hurry, would agree, happy to have the matter resolved. The questions of whether IBM could deliver on their promises or whether their bid was competitive went unasked.

The second consultant's job was more sinister. He was a thought leader.

He showed us how other companies had applied these same tools and saved millions of dollars. These were some of the highest quality presentations I'd ever seen - as good as anything I saw in my MBA program. They were compelling and intellectually cohesive. And just before he left, he invited us to a recorded teleconference by his guru, Larry Prusak. Prusak is a thought leader for IBM who has published several books on knowledge management, and now runs their knowledge management practice. Before long, IBM components were replacing many of the other vendors' components in our planned architecture. Somehow, we even ended up with an installation of DB2. The problem was that we had no idea what they would cost us to implement, or whether they would work at all.

The Looting

Where was the technical staff during all of this? Staying out the way, mostly. They knew that IBM was selling solutions two levels over their head, and they didn't want any part of it. They certainly didn't want implementation responsibility - they didn't want to be on the hook for delivering whatever IBM was promising. And IBM was more than happy to leave them out the process.

Of course, it was my job to tell management how much this Portal/KM project was going to cost, which meant getting estimates from IBM and the technical team. IBM lowballed their estimates, but never provided specific numbers and plenty of assumptions - i.e. "If everything goes well, most of these tasks shouldn't take more than a few weeks". Our internal technical team was reluctant to make any estimates at all, because they certainly didn't want implementation responsibility. Eventually, when they were forced to provide estimates, they were sky-high and also loaded down with assumptions.

As the project planning dragged on, our self-imposed deadline became closer and closer. With an expanding amount of work and a shrinking amount of time, that meant that the amount of resources needed was growing every day. Upper management was very reluctant to move back the deadline because the project had a lot of visibility, and executive bonuses were dependent upon completing the project by the end of the year. The decision was made to move forward on anything we could by using IBM resources, even though project planning was not fully completed (because of the lack of estimates and lack of input from the original consultant).

At this point, IBM Global Services consultants flooded our conference rooms. Overnight, we ended up with twenty consultants. When I asked how much these consultants were costing us, I was told $250/hr. This information proved to be incorrect - they were actually charging us $325/hr.

What were we getting for $325/hr? People hired off of Monster and Careerbuilder. Seriously.

Management was under the assumption that we would be getting real implementation experts from IBM. In fact, we were getting employees from a subcontractor. We paid IBM $325/hr, and they paid their subcontractor about $165/hr. The subcontractor then paid its people salaries of $90,000 to $110,000/yr, the market average, which equates to about $75/hr when benefits are included. We were paying a markup of about 333%.

Were these people experts? A few were. Most were just Java programmers or Websphere administrators. And a few were essentially useless. It was a fairly typical distribution of employees - some stars, most fairly average, a little dead weight. I know the contract market fairly well, given that I used to be a contract Java programmer myself, and that I still have a few friends who still do this kind of work. The average technical contractor makes between $50/hr to $100/hr, depending upon his or her experience, certifications, skill set, and the going rate in the region. Most of these people work for contract agencies such as Modis and RHI that add another $30/hr to the bill rate. If you're good enough to find your own clients and become an independent contractor, you can keep that markup for yourself and make over $100/hr.

So when I saw these rates, I was shocked because I knew a half dozen people who could have done a better job for $80/hr to $100/hr. But senior management was too nervous to use independents to complete the project - they saw the approach as a higher risk, even though they could have gotten four times as much consulting work for the same price. IBM had sold them on the assumption that experts could complete the project faster, and then had pulled the "bait and switch", by providing commodity technical staff rather than anyone truly exceptional.

One other thing that I discovered is that owning an IBM subcontractor is a nice way to make a living. The person who owned the subcontracting company we worked with was a former IBM salesperson. He calculated that he could make a lot more money by just hiring dozens of technical staff off of Monster and Careerbuilder and then selling them to IBM for $165/hr, and that's what he does now. We estimated that he was making $90,000 a week on our contract for essentially just hiring people and doing payroll.

Dead Broke

Our budget was toast. Burnt blackened toast. We were so far over budget that we felt sick just talking about it.

We had expected IBM to stay for about three months, which all by itself would have blown our budget, given their $325/hr bill rate. But they were in our company for more than seven months, burning through more than a quarter million dollars a week. And Global Services wasn't the entirety of the IBM damage. We still had licensing and support fees for Websphere, Websphere Portal, Websphere Content Management, Tivoli Access Manager, and DB2.

IBM, which had promoted itself to lead vendor and integrator, had overpromised, overcharged, and underdelivered. We ended up with an overly complex enterprise portal with a few off-the-shelf portlets and a few integrated applications. Many application integration efforts had to be abandoned. It's unlikely that those apps will ever be in the portal, and the jury is still out on whether the portal will be a success. None of those slick knowledge management presentations we saw at the beginning of the project bore any resemblance to our outcome, and that original consultant was nowhere to be found.

What Went Wrong

There's no question that our senior management made major mistakes in vendor selection and management. I still wonder if I could have made a better case to the executives. This was my second experience with IBM, and I knew how they operated. I raised as many warnings as I could, but ultimately because IBM was the vendor with the strongest capabilities, at least on paper, they were seen by the execs as the lowest risk choice. This led IBM to be chosen even when their product was unproven or even demonstrably inferior.

IBM sells itself as a provider of business solutions. That puts them in a position to make architecture and product recommendations. It is no surprise whose hardware, software, and services they typically recommend. After all, IBM invented FUD - Fear Uncertainty and Doubt - to deal with their competitors in the 1970s.

Even though IBM presents itself as a company with very advanced capabilities (i.e. chess-playing supercomputers), most of their customers are looking for the basics: web and database hardware and software, and competent technical staff to set it all up and keep it working. All of this is now a commodity, and companies should be paying commodity prices, not IBMs 300% markups.

Learn From Our Mistakes

They say that exceptionally intelligent people are easier to con, because they don't believe they can be conned. So if you're too smart for the following suggestions, you may need them the most. Our IT execs definitely did.

  • Don't take shortcuts with vendor selection or project planning. Make your vendors compete with each other during the selection process.
  • Never, ever, ever ask an implementation company for strategy, architecture, or product advice. They have no incentive to help you and plenty of incentives to sell you products and services that you don't need at inflated prices.
  • Open standards means more flexibility in vendor selection. Take advantage of this.
  • Know the market. Be able to calculate your resellers' costs and markup. Remember that markups alone don't add any project value.
  • Check resumes of individual consultants. A $250+/hr consultant should be able to walk on water, and their resume should reflect that.
  • Maintain a list of reliable implementation partners that includes large and small vendors, small independent contractors, and capable in-house employees. Match the talent to the project and use only proven talent on new projects.
  • Run small pilot projects to test vendors, technologies, architectures, etc. This can be done separately or as part of an iterative development cycle.

  • Run A Background Check On That Vendor

    Time for my bright idea. What if several Fortune 500 CIOs started sharing information on their vendors' contract performance?

    Of course, Coca-Cola wouldn't want to share information with a direct competitor like PepsiCo, but perhaps they would be willing to share information with Dow Chemical, Allstate, Bank of America, Diageo, and several other non-competitive companies. Think of the project history that fifteen huge companies could accumulate and the costly purchasing mistakes that could be avoided.

    Here's the problem. An IT executive isn't going to get unbiased information about IBM's strengths and weaknesses from IBM, and they probably won't get it from a magazine or web site that IBM advertises in - and IBM advertises everywhere. So if IT execs want an independent report on a vendor, they are going to have to create one by sharing resources and information.

    In the meantime, we have to remember that our IT budget expenditures are the scorecard by which the marketplace measures success and failure. If we purchase from firms that overpromise, overcharge, and underdeliver, then we shouldn't be surprised if that becomes the dominant business model in the IT marketplace. On the other hand, if we take the extra effort to find and reward the vendors that offer the most value, then other vendors will try to imitate their success, and the marketplace moves in the right direction.

    Legal Disclaimer: Note that the above account is based upon only my subjective personal interpretations of events and consists of opinions, my own analysis, fair industry commentary, and criticism in the public interest. Originally posted here. Tristan Yates can be reached here.


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    Display: Sort:
    How IBM Conned My Execs Out Of Millions | 176 comments (142 topical, 34 editorial, 0 hidden)
    Memories.... (2.80 / 10) (#1)
    by codejack on Tue Sep 27, 2005 at 10:06:30 AM EST

    A copy of this article should be printed on steel plates and riveted to the forehead of every manager I have ever worked for.

    Of course, I am going into management myself, now...

    Please read before posting.

    I could've sworn this was here last night. (1.30 / 10) (#3)
    by The Vast Right Wing Conspiracy on Tue Sep 27, 2005 at 10:12:23 AM EST

    Why is it here again?

    I'm a pompous windbag, I take myself far too seriously, and I single-handedly messed up K5 by causing the fiction section to be created. --localroger

    Stupid stupid stupid (2.66 / 12) (#11)
    by kosuri on Tue Sep 27, 2005 at 11:25:26 AM EST

    Your company is composed entirely of morons, and you are no exception. What on earth do you hope to accomplish here? I'd like to know the name of your company so that I can never do business with them.

    Your company negotiated a contract that presumably they were happy with. Now, either rightly or wrongly (we only have one side of the story... god only knows what kind of scope creep and requirements drift your idiotic company introduced into the fold), your company is dissatisfied with the outcome. Fine. If you feel the contract was violated or that IBM acted in bad faith, there are several options at your disposal which include:

    1. Your CEO needs to get Bob Moffat on the phone and tell him what you were promised and what you feel IGS delivered. Tell him what IGS needs to do to make it right and get paid.
    2. Send the matter over to legal. Preferably NOT to the lawyer who negotiated the original contract because he/she is a fucking moron with no earthly clue how to write a contract that protects your company's interests. Whomever negotiated that contract should be summarily fired. I've fired lawyers and managers over much less.
    3. Arbitration
    4. Court
    But what do you do? You blog about it. What in the sam hell do you think this is going to accomplish? Trust me. Nobody with any decision-making authority gives a hoot what some blogger flames about IGS. That's doubly true in your case, when it's so obvious your misery was self-inflicted.
    I'm glad that when this story goes down this stupid comment will go with it. -- thankyougustad, 11/23/2005
    You may want to consider... (3.00 / 10) (#19)
    by creativedissonance on Tue Sep 27, 2005 at 12:46:40 PM EST

    ...your exposure to liability. Yes, you veil the name of the company that got snookered, but you plainly point the finger at IBM and you associate yourself very clearly with the accusation, to the point of putting your picture and resume on the same page. I don't think you understand the potential ramifications of this. In a world where doctors sue patients for complaining about their service, you have a non-trivial possibility for similar treatment.

    In my experience in the corporate world, such 'whistle blowing' and white-knightism is very risky.

    ay yo i run linux and word on the street
    is that this is where i need to be to get my butt stuffed like a turkey - br14n
    Just out of curiosity... (2.40 / 5) (#21)
    by mirleid on Tue Sep 27, 2005 at 01:11:18 PM EST

    ...how much was your hourly rate?

    Chickens don't give milk
    Reminds me of a cute story at my company (2.75 / 8) (#24)
    by LilDebbie on Tue Sep 27, 2005 at 02:36:53 PM EST

    except we were the ones doing the screwin'. A customer wanted to add a decal to their shipping labels. None of us had ever done that before so it took two of us about a day and a half of dicking around with the printer to figure it out. No big deal. We get paid shit anyway.

    We charged the customer $5000 for what amounted to *maybe* 12 manhours of work.

    The biggest bitch of it all was that money went to a different department, not because they were in any way involved, but because - drumroll please - they're the ones who normally do that sort of thing.

    Damnit, that could have gotten us better remote hosting software!

    My name is LilDebbie and I have a garden.
    - hugin -

    Interesting (3.00 / 13) (#25)
    by cdguru on Tue Sep 27, 2005 at 02:51:27 PM EST

    Yes, I will second the opinion that there might be some liability here. I doubt anyone's career is benefited by statements like "And a few were essentially useless." Anonymous remarks like this could be attributed to anyone on the team. Might want to be careful with such characterizations.

    All in all, this is a typical IT consulting experience. Management oversight is left to the "experts", which are best when they come from outside. Then, nobody has to take responsibility for failure and fail it must. Because nobody is taking responsibility.

    Your experience of overpriced "experts" from a reputable company vs. independents is also extremely familiar and should be to anyone in the IT field. The company lends sense of security which doesn't exist with the independent. Never mind that nobody ever chases down someone like IBM or Accenture when things go badly wrong - the independent is rejected because the supposed security doesn't exist. Also, you have an "expert" vouching for the "expertise" of the actual workers being brought in. Who vouches for the independent? Other customers? Obviously they are experts, because if they were they wouldn't need the consultant...

    Finally, as much as the idea of some kind of sharing information appeals to some people, it entails two sorts of risk that are going to insure it doesn't happen. Risk number one is why would you trust the information shared by others? If they had a bad experience, doesn't it say almost as much about themselves as it does about the consultants they paid? Even assuming their information is accurate and not biased in some way, isn't such a failure more of a management and control issue than the company they contracted with?

    The second risk, which is what was alluded to before, is that somebody might actually take offense at being characterized in a less than flattering manner by a customer. There are legal precedents that lawyers can cite to you about what you can and can't do safely. Any lawyer will tell you the only really safe way is not to talk about it at all. I suppose you could have some kind of anonymous posting of information, but then who would pay any attention to rantings of unidentified people. Worse, why wouldn't someone just be assigned to post glowing recommendations about their company? No, anonymous doesn't work very well.

    Having an account of good and bad experiences works fine when you are talking about a plumber. A plumber is unlikely to be impacted too badly by this and if the occasional job is lost, so what? Escalate this to thousands of dollars and you can see why some doctors might have a problem with this. Escalate this again to millions of dollars and you have a situation where negative comments can put a company out of business and you have something that just screams out for a lawsuit. Regardless of the accuracy, fairness and telling of all sides of an issue you are dealing with something that can change the direction of millions of dollars and affect a lot of people. I don't see any way you can effectively "share" negative information without at least the potential for serious consequences. And that will block just about everyone from any sort of "sharing".

    move to vote (1.00 / 9) (#35)
    by creativedissonance on Tue Sep 27, 2005 at 06:55:53 PM EST

    and lets see if it will sink or swim.

    ay yo i run linux and word on the street
    is that this is where i need to be to get my butt stuffed like a turkey - br14n
    wow (2.50 / 4) (#36)
    by Silver6 on Tue Sep 27, 2005 at 08:31:44 PM EST

    I interned at a defense company for a while and from what I could tell it is probably a better idea to get an in-house employee to figure it out or hire someone else to figure it out than to contract out. If you have someone dedicated to your company, inexperience can be overcome, and 9 times out of 10 you will get a better solution than if you contract the project out.

    Just posted on inquirer.net <eom> (1.00 / 3) (#47)
    by tyates on Wed Sep 28, 2005 at 07:34:53 AM EST

    Ok... (1.05 / 20) (#48)
    by NoMoreNicksLeft on Wed Sep 28, 2005 at 08:12:23 AM EST

    So, we voted that down once, and you didn't take a hint. You don't even try to alter it so you have an excuse that it is "new". You boast that it's posted elsewhere, as if to rub in the insult that you think we don't deserve original, exclusive content. You use this to spam your blog, and you whine that some trillion dollar defense contractor is getting bilked?

    And to top it off, you're still a fucking nullo. Rot in hell, you worthless fuck.

    Do not look directly into laser with remaining good eye.

    -1 No mention of GNU/Linux. (1.00 / 20) (#49)
    by Lemon Juice on Wed Sep 28, 2005 at 08:27:49 AM EST

    If you can't push it through the queue once... (1.26 / 19) (#55)
    by Pirengle on Wed Sep 28, 2005 at 01:07:05 PM EST

    ...give it an exciting, tabloid-ish title, don't change a single other damn thing, and push it through again.

    And I say again:

    Just think: you're a white male white-collar worker in a Fortune Whatever company with a college and maybe even a master's degree.

    My job involves cleaning toilets. Yours does not and never will.

    -1 on principles.

    A sure-fire way to make friends and influence people: transform the letters "l" and "i" into "-1"s whenever posting. Instant wit!
    Great content (1.53 / 13) (#57)
    by Fen on Wed Sep 28, 2005 at 01:51:12 PM EST

    Nice to have content from someone who's actually done something. Way too many CS taking shallow schoolkids (shallow and student--redundant)posting from mom's basement. In between frequent wank sessions that is.
    omg omg nullon on fp omg nt (1.05 / 20) (#61)
    by Super Good on Wed Sep 28, 2005 at 06:08:57 PM EST

    Regards, Super
    Legal exposure (3.00 / 2) (#62)
    by aphasia on Wed Sep 28, 2005 at 07:31:56 PM EST

    There's far too much legal exposure for any corporations with the appearance of deep pockets to share such information with other companies. I mean, most companies won't give an honest reference regarding an individual past employee... so they'd badmouth a ginormous corporation?

    Any such system would have to be anonymous and untrackable. In which case how do you verify the truthfulness of any given reference?

    "You have *huge* brass balls. Tex would be jealous." --ti dave

    Good lesson (3.00 / 10) (#63)
    by shinyobject on Wed Sep 28, 2005 at 08:45:19 PM EST

    $325/hour is a good indication that you're paying for a top quality sales pitch, not an engineer.

    Why not say you work for Lockheed? (none / 1) (#65)
    by SocratesGhost on Wed Sep 28, 2005 at 09:01:56 PM EST

    They're the only defense contractor that breaks the $30 billion mark. They make twice as much as their nearest competitor so it's not like you're really being all that obscure.

    I drank what?

    Contractor Versus Employee (3.00 / 8) (#66)
    by dogeye on Wed Sep 28, 2005 at 09:24:39 PM EST

    $325 is a little excessive, but for many large companies it is worth paying twice the price to have a contractor instead of an employee working for them. When I was at a Fortune 100 technology company, I once heard our site manager say "We didn't have any serious workplace related injuries last year - well, that's not entirely true, a guy fell off of a scaffolding and almost died, but he was a green badge, so he didn't count on the statistics."

    All for a lowly portal and some km! (none / 0) (#69)
    by bobzibub on Wed Sep 28, 2005 at 09:59:37 PM EST

    lol.  Great story.

    I've cut 'n pasted it for future reference when the lawyers come a knocking...

    Thanks for that!


    The best is yet to come (3.00 / 9) (#70)
    by oshu on Wed Sep 28, 2005 at 10:16:42 PM EST

    In a couple of years the Knowledge Management portal will be firmly entrenched.  It will also be riddled with annoyances.

    New employees with question why they have to use it and deal with it when they could just scrap it and create something so much better with off the shelf tools.

    They will be told "No no no!  We spent *way* too much on this to scrap it and start over.  I don't care how much better things could be.  We bought this and we are going to use it."

    Consultants be all up in my face sellin and shit (2.58 / 17) (#74)
    by Chewbacca Uncircumsized on Wed Sep 28, 2005 at 11:20:08 PM EST

    What I hate, too, is they always pair up a fairly competent dude with a total fucking assclown who doesn't know jack shit. That said on a recent project we started out small with a prove it to us attitude, and when they didn't deliver, they got clowned like Leroy Brown. We wuz all up in they face, with the don't pull this extend the schedule shit on me son! Do I look like a motherfuckin bitch? Then why you tryin' to fuck me!? I want a fuckin sales pitch, I'll call the phone company and listen to the hold message motherfucker! Don't TEST. That's how you need to deal with triflin crumbsnatchas like IGS. Keep the pimp hand strong, yo.

    From what I have heard... (3.00 / 9) (#76)
    by mikepence on Wed Sep 28, 2005 at 11:47:20 PM EST

    ...after being in the IT sector as a consultant for over 15 years, this is a common tale. I have even heard of lower-level developers inviting IBM in to sell what they have, only to have IBM also sell management on outsourcing the jobs of the very people who recommended them. So, underpaid foreign labor gets brought in at a premium under IBM's banner -- that is how IBM makes nearly half of their bottom line with Professional Services.

    Goodbye budget. Goodbye jobs.

    Evil. Simply evil.

    Corporate IT is so depressing... (2.00 / 5) (#77)
    by solstice on Thu Sep 29, 2005 at 12:35:19 AM EST

    when you have to see stupid shit like this happening every day. Get involved in a good open source project to raise your spirits and hope for humanity. :)

    Vendor vs. Integrator bill rate (none / 0) (#78)
    by omidk on Thu Sep 29, 2005 at 01:19:11 AM EST

    Obviously 325 and hour is excessive but in my experience it isn't all that unusual to see a vendor charge significantly more than a so called integrator due to their specialized knowledge.

    You are stupid (1.54 / 11) (#79)
    by gordonjcp on Thu Sep 29, 2005 at 02:33:09 AM EST

    You fucked up. You made a bad deal. You got into a big project with no clear idea of what you were going to do, and when inevitably it all came and bit you on the arse, it cost you a lot of money.

    Fucking stupid.

    Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll bore you rigid with fishing stories for the rest of your life.

    Experience (3.00 / 17) (#80)
    by the77x42 on Thu Sep 29, 2005 at 02:47:51 AM EST

    First off, this should come as no surprise.

    When I worked as an know-IT-all for a company who just had a $1 million commercial made, the production company was going to charge $300 to recompress a 30 second MOV file as an MPG. I did it in 10 minutes for a pair of free hockey tickets.

    My current job consists of producing and editing training videos for $100/hr. Believe it or not this is a TENTH of the average rate for the same (inferior) product. I'm not going around shooting with a 35mm Arriflex, I just have a simple Sony DV camera and Final Cut Pro. The end result, however, is WAAAY more professional than other production companies.

    I also do contract programming on the side. Instead of giving them my rate, I now simply ask what their budget is. Sure, they probably tell me at least half of the real figure, but the number they tell me is usually about three times greater than the quote I would give. This doesn't mean my rate of $40 - $75 is low, it just means I'm incredibly fast at what I do. Kind of like tattoo artists who charge by the piece and not the hour.

    What this all leads me to believe is that executives simply do not know. It's your job to let them know. They did a risk assessment and came up with a reasonable answer. IBM, for all intents and purposes, is perceived to be reliable. The devil is in the details though. The rates should have been nailed down. This sounds like it was your job. The total cost of the project should have been negotiated before hand and then compared with the budget. This too sounds like your job. When the cost of the project went over budget, everything should have come to a grinding halt and everyone should have been brought together to see where things were and how long they would take to get to where they needed to be. This, unfortunately, also sounds like something you should have played a major role in, since, by your account, you were project manager.

    Now, this article is dangerously close to slander. You have your full name on their. From your resume you've linked to it's obvious you work for the big NG. This article just bleeds stupidity. Inaction on your part allows contractors (read: crooks) to milk tons of money for otherwise clueless people. Sure the payoff is that I make more money for my own contracting, but I try and keep it mostly honest. When you are talking COMPLETE FUCKING ROBBERY OF GOVERNMENT DEFENCE CONTRACTORS, taxes just go up to pay for all this shit. Budgets are there for a reason, they aren't made up.

    "We're not here to educate. We're here to point and laugh." - creature
    "You have some pretty stupid ideas." - indubitable ‮

    sounds like... (3.00 / 7) (#86)
    by Insoc on Thu Sep 29, 2005 at 08:07:24 AM EST

    "I've sold monorails to Brockway, Audbinville, and North Haverbrooke, and by gum, it put them on the map!
    Well, sir, there's nothing on earth
    Like a genuine,

    I bet you've bought a thinkpad lately. (1.66 / 3) (#87)
    by lukme on Thu Sep 29, 2005 at 08:31:29 AM EST

    Even though the sticker says IBM, they are made in china - by some other company.

    It's awfully hard to fly with eagles when you're a turkey.
    There is not a little (2.12 / 8) (#89)
    by guidoreichstadter on Thu Sep 29, 2005 at 10:26:28 AM EST

    bittersweet consolation in seeing the likes of a large "defense" contractor getting its comeuppance.

    A pity it won't make a dent in the industry.

    you are human:
    no masters,
    no slaves.

    Why are you surprised? (2.76 / 13) (#93)
    by ckm on Thu Sep 29, 2005 at 12:11:22 PM EST

    The fact that you were surprised by all this and choose to write about it is a sign of your own inexperience.

    What you describe here is par for the course.  Every single large consulting company works like this.   Accenture, IBM, EDS, etc.  They all lowball projects, wow management with high-level experts, then put inexperienced staff on it to complete the project.  Accenture has a whole campus near Chicago where they train college grads to operate in this sort of scenario.   And people who are actually employees of said consulting company get paid even less than those contracters you saw, somewhere around $40k/$50k a year...

    The only lesson here is that if management can't say no, they will get screwed.  That's true at every level and esp. when dealing with outside vendors.

    Ban Powerpoint (2.83 / 6) (#94)
    by n8f8 on Thu Sep 29, 2005 at 02:14:50 PM EST

    I'm currnetly on both ends of this issue. I both work for a government contractor and I market to the government. In my personal experience most of these problems happen because decision-makers are sold with fancy PowerPoint slides and are technically incapable of determining the difference between a real product and FUD. I see it happen again and again. Clue to the decisionmakers: if the salesman/marketeer can't explain it technically with a whiteboard or chalkboard AND show you a working mockup demonstration - Then toss them out! Powerpoint slides are cheap.

    Sig: (This will get posted after your comments)
    IBM may be after you and kuro5hin for defamation (2.80 / 10) (#97)
    by spurious on Thu Sep 29, 2005 at 05:07:31 PM EST

    Disclaimer: IAAL, who has had some involvement with defamation litigation (ie slander, libel). I really enjoyed your article, but I think you should consult a lawyer in your jurisdiction. There have been a number of cases recently in the US where people have been sued or disciplined over their blogs about their employers or other companies. Your article, and the title in particular, uses defamatory language such as "conned".

    You should seriously consider editing this article to remove references to actual companies. As a cautionary fable, it's not necessary to actually refer to anyone by name.

    Re-publishing the article to the Inquirer etc. may also increase your liability, so you may want to reconsider that. Again, you should consult a lawyer.

    kuro5hin.org may also be found liable, for publishing your article.

    the only sad thing (2.00 / 9) (#104)
    by jcarnelian on Fri Sep 30, 2005 at 10:13:22 AM EST

    Wow, a defense contractor complaining about overbilling. That's amusing. The only sad thing about your story is that it didn't bankrupt the defense contractor. If it had done that, we would likely have one wasteful and overbilling defense contractor with incompetent management less.

    Scary story o.o (2.00 / 2) (#106)
    by A synx on Fri Sep 30, 2005 at 11:29:00 AM EST

    Oh, how horrible and sad!  It really hurts to think of the people getting all that money that they didn't earn, when others are starving in their own homes. I wish we could stop these people. Good advice I say.  Hopefully others will take it seriously.  And... in tandem with some of the others here...

    Anti-SLAPP resource center
    States with SLAPP protection

    Though they have no right, IBM still may try to sue via the USA court system, in order to censor you.  Such is called a SLAPP lawsuit, and you may be able to receive protection or compensation for it.  So might kuro5hin, but I'm sure they know about all this stuff already.

    its very common in IT (3.00 / 6) (#111)
    by shrubbery on Fri Sep 30, 2005 at 01:06:49 PM EST

    The most well known are the big 5 accounting companies who hire right out of college. I know. I was one of them. They put me in there and charged alot of money for what was basically junior level work.

    I had the same ordeal once too with IBM Global services. They had a team of about 30-40 at one point doing all sorts of things from project managers to straight out of college coders. This was to use one of IBM's own products too which required customization. After it was all over, it needed an overhaul to a new architecture. The company IBM was contracting to hired all independent contractors.. about 10 of them at very reasonable market rates including me. We were all fairly experienced in this product and all pretty good coders. Bottom line, we rearchitected the whole thing, wrote the code, QA'ed it, and delivered a fairly robust product in 2 years, about 2/3s of the time IBM took but with only a quarter of their personnel.

    I worked for IBM once... (3.00 / 12) (#115)
    by z84976 on Fri Sep 30, 2005 at 03:26:37 PM EST

    For about a week. I was actually a contractor in my current position (before I was hired permanently). My contracting company somehow convinced my primary employer to let IBM borrow me for a week. So off I went to Iowa to help some company "identify" their problems. I have no clue what IBM charged for me, but it was a lot. I got there and met the guy that originally developed SCSI. Let's just say their tech crew was quite sharp. Turns out they knew all along what their problems were (token ring, coax and 10baseT ethernet, twinax, appletalk, unix, mainframe, novell, nt server, nt workstation, win95, dos and mac machines-- you just KNOW something's wrong with all that under one roof) but management refused to believe them until they had paid some IBM guy a lot of money to confirm it. Funny thing is, I didn't even know I was the IBM guy until I got there and they said "you must be the IBM guy."

    yuo is gonna get raped (1.00 / 12) (#120)
    by bg ex plus alpha on Fri Sep 30, 2005 at 09:58:58 PM EST

    But they have funnier commercials.... (2.75 / 4) (#121)
    by deanoh on Sat Oct 01, 2005 at 05:35:26 AM EST

    Than most other folks peddling the same IT snake oil. IBM hardly wrote the book on high-powered, big-name consulting and "value-added" services that cost dearly. But at least you can be entertained at home while getting your pocket picked at work:-)

    rob from the rich (2.00 / 3) (#123)
    by hildi on Sat Oct 01, 2005 at 10:15:15 AM EST

    give to the poor


    Let me get this straight... (1.57 / 21) (#126)
    by der on Sun Oct 02, 2005 at 12:49:24 AM EST

    You're in an industry entirely grounded on killing people for profit, and IBM is the bad guys? Riiiight.

    Shame they didn't put you under entirely, murderer.

    Keep up the good work, IBM.

    OMG, this sounds SO familiar. (2.60 / 5) (#129)
    by LeglessMarine on Mon Oct 03, 2005 at 04:30:54 AM EST

    1 year ago, I was a Sysadmin with a Canadian Telco.

    After a suspiciously brief courship, management accepted IBM's proposal to upgrade our infrastructure, to the unhappiness of several other suitors who'd been trying harder, for longer, to get in the door.

    I can't speak for the money involved, but from the outset, I saw that both the manpower estimates, and the timeless were grossly unrealistic.   It didn't take a rocket scientist to see it.  I wouldn't doubt if a few well timed "gifts" helped make the picture seem rosier to the decision makers.

    As expected, all went to shit in a few months, with the internal staff struggling to administer new servers and a SAN that we'd had no training on.    The promised training had been forgone so we could "assist" IBM with the implementation - An implementation/integration that we were promised from the beginning would be completely taken care of by IBM  Like the original article, IBM "offered" To bring in contractors  to "help us" meet our timelines.    

    To make a long story short, it very quickly turned our workplace into a living hell.   Several of us SAs left, leaving the few remaining to should a mad load.  

    I lay the blame squarely at the feet of stupid managers, who were all too ready to buy into IBM's very obvious lies.   The department is still reeling from the episoede.   Only a fraction of the originally involved parties remain.

    Buyer beware.

    commercialism at its finest!!!! (2.00 / 2) (#130)
    by kbudha on Mon Oct 03, 2005 at 01:36:10 PM EST

    I wonder if this is how Rome started to fall.
    Give it another 200 years.
    Hopefully my decendants will have moved to Canada by then.

    The end of civilisation as we know it (1.00 / 3) (#131)
    by MikeGale on Mon Oct 03, 2005 at 03:25:11 PM EST

    Think about this for a second.

    Companies syphon money out of taxpayers' pocket.

    Result is worse than doing nothing.

    These companies grow with the help of legal abuses, fear of whistle blowing, basic dishonesty and the money they make.

    Taxpayers go broke.

    Country goes belly up, people literally die.

    (Now where are the terrorists? Have we met they enemy and they are us??)

    I'll do it! (2.60 / 5) (#134)
    by GhostfacedFiddlah on Mon Oct 03, 2005 at 08:43:19 PM EST

    So if IT execs want an independent report on a vendor, they are going to have to create one by sharing resources and information.

    Hey - drop me a line regarding this.  I can have such a system up and running in one month, providing transparent information-sharing across multiple world-class enterprises while keeping classified information secure.  Assuming that all goes well - and you already have all of the required licenses - I can have this done for under $5000.

    Your friendly neighborhood software vendor.

    Not quite the way it went...... (2.50 / 6) (#135)
    by ibmer050 on Mon Oct 03, 2005 at 09:19:04 PM EST

    I was on the IBM team for the engagement in question. Tristan's entitled to his point of view, but I think his portrayal of the engagement is neither fair nor correct.
    There are several inaccuracies.  Just one example -- while Tristan asserts that Larry Prusak "runs [IBM's] knowledge management practice," Prusak in fact left
    IBM several years ago to start up his own consultancy, and his presence at this engagement was requested by the client.  I could go on about specifics of this
    engagement that are inaccurately represented, but this is not the forum for that (any good consultant knows the value of protecting his client's privacy and not
    revealing details of an engagement).

    However, I know that after Tristan posted his impression, my bosses contacted the client, and I know we were assured that they were satisfied with both the
    process and the results -- in fact, they continue to work with us.  Of course, as a consultant you're always looking for ways to improve your practice, and you're
    open to legitimate criticisms... and we'll continue to review our processes with this client. And if we find anything that needs improving or that's not in
    our client's best interest, we'll implement the fixes.

    No one likes criticism, especially when you take great pride in your work and your professionalism. But that's the thing about blogs, right? Everyone gets to
    express their opinion, no matter how off-base it may seem to others with similar knowledge.  I just wanted you to know that the rest of us who were actually there (including most importantly the client) saw it quite differently than Tristan.

    Leonard Lee
    Senior Consultant

    It already exists.. (none / 1) (#162)
    by AlfaWolph on Tue Oct 18, 2005 at 05:56:47 PM EST

    Here's the problem. An IT executive isn't going to get unbiased information about IBM's strengths and weaknesses from IBM, and they probably won't get it from a magazine or web site that IBM advertises in - and IBM advertises everywhere. So if IT execs want an independent report on a vendor, they are going to have to create one by sharing resources and information.

    It's called the golf course.

    Couldn't pass the first sentence... (2.00 / 2) (#172)
    by Awutee Mokaka on Sat Nov 19, 2005 at 05:15:21 PM EST

    Last year, I worked as part of a project management office for one of the biggest defense contractors in the world.

    ... and you want to discuss IBM screwing someone? Here's my little story. I worked for the USN as an ATI, that's Aviation Technician Intermediate. I worked on communication and navigation equipment for the EA-6B Prowler, specifically the ACLS, or Automated Carrier Landing System. The device I worked on predated 1970 and a design change hadn't been made since 1977. A part of this system involved a 128k memory module, which when needed to be replaced through the defense contractor cost US $10,000.00. The funny part, was that had ALWAYS been the price. Since 1977.

    I don't know if anyone else said it, but, FUCK YOU.

    It goes like this (none / 0) (#173)
    by pkej on Tue Nov 22, 2005 at 08:31:47 AM EST

    Employees: It failed, it isn't better or more effective, and why weren't we asked about what we need?

    Accounting: It saved us a lot of money in the long run, it was a success. Our employees are learning to use it as the need arise, and it is an valuable accounting tool.

    Middle management: A few small problems are being ironed out, you will have to use this software in your work, it is a valuable accounting tool and everything will work much more efficiently now.

    Management: The project was a success, the vendor supported us all the way and provided innovative solutions and met our specifications. We are happy to work with them in the future.

    Vendor: The customer found we delivered on time, on specification and at less cost than our competitors would have.

    That's how it seems to be in all such projects. You get a "portal" with lots of bugs, unstandard user interface, inferior search (compared to normal web search engines), and rigid input which requires detailed knowledge of how the software is working.

    Client and Vendor at Fault (none / 0) (#177)
    by libertas83 on Mon Feb 20, 2006 at 02:50:56 AM EST

    Hi, I just graduated college in December. I have a BS degree in Information Technology and a second discipline in Management. Every class in the IT major made it clear that successful implementations have a lot to do with the users of the software. If you don't get users involved in the process, then it has more of a chance of failing.

    Vendors will always sell their solution as the best that can do it all. They will lie so its the responsibility of the project team to investigate and get the truth. One suggestion a guest speaker made to my Software Acquisitions class was to have the RFP give Yes/No answers wherever possible to keep the marketing jargon down.

    Anyway, failures happen all the time so the only thing we can do is learn from them. Thanks for posting.

    How IBM Conned My Execs Out Of Millions | 176 comments (142 topical, 34 editorial, 0 hidden)
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