On the Hot Seat

by Peter Buxbaum

May 11, 2001 —

An IT project goes south -- what do you do? Call your lawyer, says Bill Donovan, CIO at CSX Lines LLC, a Charlotte, N.C.-based ocean transportation and logistics services provider. Call your headhunter, says Bruce Blitch, CIO at Tessenderlo Kerley Inc., a Phoenix-based chemicals maker. Computerworld posed a few hypothetical questions to these CIOs to see how they would handle some difficult legal situations.

A systems integrator you hired to develop a strategic e-commerce system has failed to meet the deadline spelled out in the contract and claims it will need at least 50% more time to complete the project. Your CEO wants to sue the contractor. What do you do?

Donovan: The fact that it's late isn't enough to warrant a lawsuit. I'd have to sit down with the CEO and explain the facts. If the contractor is doing a good job otherwise, the delay may involve a failure to define the specs properly. Dragging something like this into court would be ugly.

I'd tell the vendor the CEO wanted to sue them as a threat more than anything else. I'd ask them to help me work with the CEO and the business owner to clearly understand why the project is late and to see what the contractor and the in-house people can do to correct the problem.

Blitch: I'd call every headhunter I know and update my resume. In my mind, the blame lies squarely at IT's doorstep. Any project involves planning and controlling. The CEO is probably not upset by the delay so much as the hundreds of thousands [of dollars] it will cost. That should have been something the CIO was managing. Every project should have had a plan. Having a plan implies having a metric with which to measure its progress. You don't just wake up one day and find that what should have been 100% [complete] is really only 50% [ready].

A commercial software package that your organization licensed to help manage its financial activities has failed to perform as advertised, leading to inaccuracies in billing statements and tens of thousands of dollars in operating losses, along with customer angst. The vendor blames your firm for customizations that were made to the package by your IT organization. What would you do?

Donovan: You have to sit down and find out what caused the problem and then fix it. But the vendor has to cooperate. If they don't, threaten arbitration or litigation. But in most cases, the vendor will work with you on this. I have no problem going to court, but you have to be careful to have your facts in order. Blitch: I hear recruiters prefer the chronological format for resumes. The fault is not necessarily with the vendor. I don't believe all the advertising I see and read. An ounce of prevention is better than a pound of cure. You need to think through how to structure the deal upfront. Afterwards, it is a little late.

A hacker has gained access to sensitive customer data, including credit card information and personal histories. A group of customers has filed a class-action lawsuit against your firm. What steps would you and your organization take next?

Donovan: I'd turn that over to the legal department immediately and get some high-powered outside help to take care of it.

Blitch: Getting into a litigation duel with your customers is not a path to future goodwill. Depending upon the demands of the customers and the negotiatingg skills of your corporate counsel and CFO, you are probably better off settling quickly. Long legal battles make rich lawyers and poor you. Pick your fights carefully.

A software programmer from your firm is recruited by a rival. Six months later, the rival introduces a software service for customers remarkably similar to one that your company launched a year ago. How would you respond?

Donovan: If we were a software house and our business depended on it, I'd want to get our lawyers and some outside counsel involved. But intellectual property rights are so amorphous that it's hard to do anything about it, even with a confidentiality agreement.

Blitch: Have your lawyers draft a really stern letter to this person and their employer. Rattle your sabers, but don't pull them from their scabbards. It should never go beyond this stage. Hope they back down based on the noise you are making. Enforcing employment contracts is notoriously hard to do.

If they don't back down, then count your blessings that you have a 12- to 18-month lead on your competition. If you haven't made any progress on enhancing functionality in that period of time, then you deserve to fall behind.

Computerworld