IT Failure in Ford Motors Report 2022

Running Head: IT Failure in Ford Motors
Issues Related to Information Technology in Ford Motors
Report
System04104
9/29/2019

IT Failure in Ford Motors
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Introduction
Ford Motors is known for its luxury cars in the world and it is one of the popular car
manufacture company of the world. The production of the cars in the company is generally
done under the advanced information technology and modern computer systems. This report
analyses the use and implementation steps of new procurement system being put in place by
the Ford, with the help of Oracle. The company introduced a technology called Everest,
which was a third-party information system to replace the existing legacy system in the
company. However, the failure of system was a major concern for Ford because the new
information system in the company failed to meet the deadlines and increase the cost of
operation. The company also uses the robotics technology to manufacture its cars but
somewhere company was lacking to manage its information system in the company that
causes many problems and challenges for the Ford Motors while managing the supply chain
and production of the Cars for the customers.
This report analyses the issues related to information technology in Ford Motors and analyse
which type of problems company has faced because of improper management of its
information system. The report also analyses the implications of failure information
technology in the organisation. The report also analyses that how company can avoid this
type of issues in the future to stay competitive in the market.
About the Company
Ford Motor is one of the largest American suppliers of luxury cars in the world. The
company is also one of the popular automobile companies in the world that operates its
business in all the six continents of the world. The Ford Motor was established in 1903 and
its head office is in Dearborn, Michigan (USA). The company sells automobile luxury cars
under its Ford brand and Lincoln brand. The CEO of the company is James Hackett. The
company produces more than 6 million cars every year worldwide and it has more than
199,000 employees (Ford, 2019). The company manufactured its first model T in 1925 in
Geelong. Victoria. In the Early stage, the company has aced many issues related in its
management system and slow production system. Apart from this, the company was also
blamed to deliver false or damaged products to the customer that costs so much for the
company as it recall its damaged product from the market and take it for the repair in the

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factory. Although, the company was also facing strong issues related to its information
technology while producing and manufacturing luxury cars (Ford, 2019).
Introduction about New Information Technology in Ford Motors
The use of information system in an automobile company is very complex because an
automobile company have to generally deal with many stakeholders such as customers,
suppliers, vendors, and partners. The Ford is known for its best IT strategies and
implementation of system in the organisation and still Ford uses a third-party system called
‘Covisint’ to share information among its partners, suppliers, customers, or vendors. The
system provides lots of facilities to the company such as Inventory optimization, supply chain
integration, and production models to anticipate built to order workflow. The system also
provides the facilities to its vendors to monitor and manage the requirements related to raw
materials and related to ordering or bidding (Ford, 2019). There were lots of benefits to the
ford using the third-party information system called “Covisint” because it also enables the
vendors and supplier to access the information from anywhere about the requirement and
requisition. The major advantage of this system was that it reduced the time of procurement
process. The software also helps the company to reduce the time and cost related to finding
information about payment status, shipment notice and purchase order (Laudon and Laudon,
2016). The current system also removes the old information system from the organisation
which was non-integrated with other functions of Ford Motors. The “Covisint” system is web
-based centralise system that enables the organisation and its vendors, suppliers, of partners
to access the information from anywhere in the world (Yeoh and Koronios, 2010). However,
this project was intended to implement in the organisation in phases and remove the old
‘Everest’ system from the organisation. The Ford Motor want to replace the old Everest
System from both functionally and from the site (Bell, 2016).
The purpose of bringing new system was to bring efficiency in the various operations of the
organisations and improve the business processes in the organisation (Palmatier and
Crecelius, 2019). The company also want to improve the performance of its supply chain
process by streamline procurement system. The system was designed in such a way that can
reduce the manual cost and system errors from the operational function and from the business
organisation. However, the management wanted to manage the controlling, distribution
system, and shared timely information with the various functions and partners of the
organisation (Baxter and Sommerville, 2011).

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Issues related to Information Technology in Ford Motors
After the implementation of new Oracle based information system, the Company was facing
strong challenges related to managing the software and information system in the
organisation. The implementation of new system has increase the overall cost of maintenance
and also affects the production system of the company. The new system was failed to
coordinate with the integrated system of the company and it has taken lots of time to adjust in
the organisation (Biček, Gotovac, Miljavec, and Zupan, 2015). The installation of new
information system in the company needs different type of software vendors, different
language, and different processes for updating. The system was also failed to reduce the
inventory cost rather it increases the material costs by its inefficiency of managing suppliers
and order placements. These all are the major reasons that leads to the failure of new
information system in the Ford Motors.
Causes of Failure of IT Projects
There were many reasons behind failure of Everest in the Ford Motors. Although, it can be
said that there are various stakeholders can be responsible for the failure of the information
system in the Ford Motors such as Suppliers, project team members, or other stakeholders of
the company who are engaged with the implementation of information system in the
organisation (Hanawalt and Rouse, 2010). Some of the major causes of failure of the new
Oracle Information system in the Ford Motors are as follow:
1. Poor Planning: Planning before implementing the information system in the
organisation is crucial. Sometimes it is not meticulous because the organisation is
facing issues or pressure related to time management. Although, most of the system
implementation starts without proper analysis of the scope and functionality of the
system in the organisation. The deviation of implementing the project from the
original path may leads to failure of the project or it has involved heavy risk. The
same was happen with the new information system in the Ford Motors (Liu, Wu, and
Xie, 2015).
2. Unclear Objective and Goals: Sometimes the organisation failed to define clear
objective and goals for the information system that leads to the failure of the system
in the organisation. However, it has been observed that Ford Motors was failed to set
a clear and SMART goal objective for the new IT system in the organisation and that
is the major reason of its failure in the organisation.

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3. Lack of User Involvement and Executive Support: Another reason of failure of an
IT system in the organisation is related to lack of support form the tope executives of
the organisation. The manager at the functional level and during procurement and
supply chain function should interact with the system teams and business
development teams. It is the responsibility of Business manager to ensure that IT
system will fulfil the needs of the business requirement and provide all the necessary
information on the time (Bayandin, and Kretov, 2012).
4. Lack of Appropriate Skills: The rapid change in technology needs fast adoption and
learning of new skills and technology knowledge. The Ford Motor is a large
organisation that uses a multiple of technology in its [production and manufacturing
of cars. A person who involves in managing information technology in the
organisation needs sound knowledge of technical skills and management skills.
5. Lack of Network and Communication: The large organisation needs a huge
network of IT system and a complex IT system in the organisation requires a large
amount of work and information gathering and processing. However, this is generally
done through the variety of subsystems and team members. To successfully used the
Information Technology system, it is required that all the team and sub teams
communicate with each other in effective and efficient manner. Lack of
communication leads to failure of the entire IT system in the organisation and it is
really a major concern for any company (Sira Jr 2011).
What Went Wrong with ‘Everest’
There are various reasons of failure of Everest in the Ford Motors. Some of the key reasons
are as follow:
1. Escalation cost: The initial cost of the IT system while implementing in the
organisation was around $200 million but after the completion or implementation of
the IT system in the organisation, the cost was raised up to $400 million. This shows
that company bear a high cost for the new information system in the organisation,
which was not expected by the company, and finance team.
2. Integration Challenges: There were various sub teams were working on the Everest
and it requires an effective communication bond among them. Although, the lack of
communication and lack of support among the various sub-teams that were working

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on the various sub system of Everest was major reason of failure of this IT system in
the company (Sharma and Sharma, 2010).
3. Unrealistic Goals: Sometimes the organisation changes its final objective of goals
that has to be achieved by the Information system in the organisation. This will also
lead to the failure of entire project in the organisation. The major causes of such
changes are uncontrollable changes in the requirements of customers, change in trend
or technology in car manufacturing and changing expectations of user while using
current information system (Ambekar, Edlabadkar, and Shrouty, 2013).
4. Lacking Ease of Use: The new system was not easy to operate for the end users and
it was a serious problem for the company. The comfortability of end users was
compromised with technically a complex IT system that was required more
authentication and affords from the end users. Even the suppliers who were using the
new system go back to the old system for some assistance and gathering information
related to their records and supply of raw materials.
5. Questionable Choice of Partner: The Company used the Oracle based information
system, which was known for its integration issues. The Ford Company is a large
organisation that is required integration among the sub-teams of its IT system.
However, the selection of Oracle as the software platform for the IT system in Ford
Motors was questionable and one of the causes of its failure (Leonard, 2011).
Recommendations and Conclusion for the Ford Motors
The Ford Motor is a large organisation and it has varieties of functions to perform digitally in
the organisation from procurement to production and assembling to supply of the product in
the market. In such scenario companies needs to adopt and implement the IT system phase-
wise. The company should also train its employees to adopt the new system and adopt the
changes. The complexity of using the new IT system for the end users was the major reason
of its failure in the organisation. The organisation should also care about the proper timing
and planning for the project because planning and implementation two are the important
phases in implementing a system in the organisation.
In conclusion, Everest in Ford is one of the best examples of failure of IT system in
Automobile sector and the major reasons were related to poor planning of implementing the
system, unclear goals, lack of experience and participation of end users, and proper
implementation of the system in the organisation. The company can avoid the failure of

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Everest by just prioritizing the steps and with a better implementation planning. However, it
can be said that this past failure or issues related to IT can be a big lesson for the Ford Motors
and other companies like this. If the organisation adopts the technology and IT system after
analysing its need and planning with clear and specific goals, then it can be easily avoided by
the Ford Motors. However, the lack of support of top executives and manager was also a
concern and if it was avoided by the company then they can prevent the failure of Everest in
the organisation.

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