Case study

Volume 14 Issue 3

September 2016 HEC138

Ça Va de Soi: A Phoenix Rises from the Ashes of a Failed IT Project – Part A – The Fall

Case1 prepared by Simon BOURDEAU,2 Dragos VIERU,3 and Amélie BERNIER4

April: “Our new IT platform [i.e., the ERP system and the on-line store] will give us a competitive edge and increase our productivity by giving us access to more information faster.” (Antoine Nasri, Ça Va de Soi’s owner and founder)

June: “The ERP system that INBIZ5 is developing for us seems to be more like a distribution system than a point-of-sale (POS) system, so we have to invest a lot of our time and energy making sure the ERP system will be adapted to our needs. For INBIZ, this is not a problem because it is developing a POS that it can sell to other companies.” (Kinza Nasri, IT project manager and owner’s daughter)

July: “Of course we have some doubts, but at the same time, we are optimistic that INBIZ will fix the bugs and that the bridges with Magento6 will be ready for next month’s launch.” (Kinza Nasri)

August: “Even though the bridge is not finished and there are still some bugs, we have just launched INBIZ’s ERP system at head office and in all our stores.” (Kinza Nasri)

September: “Since the launch one month ago, we are duplicating our transactions in the new ERP and in our old system. We are confused. INBIZ’s ERP doesn’t seem to work. The end-of-day totals don’t match, and we know that our old system is accurate. We’re still waiting for the bridge [with Magento’s e-commerce platform].” (Kinza Nasri)

1 This case study is part of a larger research program, PME 2.0, funded by the government of Québec and coordinated by CEFRIO with the aim of documenting and fostering the adoption of information and communication technologies by Québec SMEs. All the facts are real. The company name has not been disguised. A total of 16 interviews were conducted with all management team members, the warehouse employees, and some store employees.

2 Simon Bourdeau is an assistant professor of information systems at ESG-UQAM, Montréal, QC, Canada. 3 Dragos Vieru is an associate professor of information technology at École des Sciences de l’Administration, Téluq-Université

du Québec, Montreal, QC, Canada. 4 Amélie Bernier is an associate professor of industrial relations at École des Sciences de l’Administration, Téluq-Université du

Québec, Montréal, QC, Canada. 5 http://www.inbizerp.com/ 6 Magento (magento.com/) is an open-source e-commerce platform selected by CVDS to develop its transactional website.

© HEC Montréal 2016 All rights reserved for all countries. Any translation or alteration in any form whatsoever is prohibited. The International Journal of Case Studies in Management is published on-line (http://www.hec.ca/en/case_centre/ijcsm/), ISSN 1911-2599. This case is intended to be used as the framework for an educational discussion and does not imply any judgement on the administrative situation presented. Deposited under number 9 65 2016 002A with the HEC Montréal Case Centre, 3000, chemin de la Côte-Sainte-Catherine, Montréal (Québec) H3T 2A7 Canada.

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Ça Va de Soi: A Phoenix Rises from the Ashes of a Failed IT Project– Part A – The Fall

October: “Oh, la la!!! It’s October, we’ve been using the system for two months, and we’re still not sure if it works. What should we do? Give INBIZ one last chance? Antoine believes in them, he trusts them. A good friend highly recommended INBIZ.” (Kinza Nasri) November: “You know what? We’re jeopardizing our in-store activities and our team’s confidence… Too many people were involved. Too much energy has been invested so far.” (Antoine Nasri)

Episode 1 – Ça Va de Soi: History, Business Model, IT Maturity, and Challenges

Ça Va de Soi (CVDS) is a 30-employee SME specializing in the design, distribution, and sale of knitwear. Odile and Antoine Nasri,1 the current owners, founded CVDS in 1972. Their two daughters, Gabrielle and Kinza, both work at CVDS. Gabrielle is the operations/human resources VP and Kinza is the merchandising/marketing VP and the IT project manager. CVDS focuses on classic European garments; its products are considered high-end in terms of raw material and finishes. The company is associated with the “slow fashion” movement since it focuses on basic, good-quality clothing that lasts for years. According to Nathalie, the on-line store manager, “We continue to sell models we have had for nearly ten years – same model, same fabric, different colours. Some customers say, ‘I bought it five years ago. Do you still have it?’” Ça Va de Soi’s business model2

In the early 2000s, CVDS experienced a significant decline in sales due to the opening of international markets and changes in consumer buying habits. At the time, CVDS only designed and distributed its products. In 2004, it decided to focus on high-end materials, such as cashmere, Egyptian cotton, and superfine merino, and to reorient its activities based on its upscale product know-how to target high-end market segments. This reorientation was accompanied by the deployment of a two-phase organizational strategy based on the “bricks and clicks” business model. Phase one, the “bricks” phase, entailed the opening of physical stores and the development of CVDS’s brand image. Between 2006 and 2012, CVDS opened five stores in four cities in eastern Canada and a head office in Montreal to serve as a design studio, warehouse, and distribution centre. Phase two, the “clicks” phase, entailed the development and deployment of a new IT platform including an on-line store to provide a complementary distribution channel. Ça Va de Soi’s information technology maturity level

Since its founding in 1972, CVDS has always relied on IT. In the past two decades, the company has gone through three major IT reengineering phases. Its owners are in favour of IT investment and the use of digital technology. Each year, CVDS invests between 1.5% and 2.0% of its

1 Exhibit 1 presents a brief description of CVDS’s management team. 2 Exhibit 2 presents a timeline of the main events in CVDS’s history.

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turnover in IT, a high percentage in the fashion industry. However, IT investment seems to be done on an ad hoc basis. The company has a part-time employee to look after Raymark,1 one of its three inventory systems, and one external IT consultant, Fadi, who provides general IT support. Fadi has been advising the company and developing its IT infrastructure for over a decade. Ça Va de Soi’s information technology challenges

Growing from one to five stores during the “bricks” phase was problematic for CVDS: paper- based operations management was lengthy and expanding product lines created storage problems for the stores. Therefore, this situation resulted in lost sales opportunities because some potential customers had specific needs or requested items from the firm’s catalogues. Moreover, CVDS’s legacy IT infrastructure had three major shortcomings. First, it was relatively slow and regularly required expensive maintenance by external IT consultants. Second, it required numerous time-consuming data entries. The same data had to be manually entered in several systems since MBI, the main inventory system, FashionCart and Raymark, two additional inventory systems, and QuickBooks, the accounting system, were not integrated. As Gonzales, the warehouse manager, explained, “Every day I would use Raymark to print out a report of the sizes, styles, and colours sold. Then I would use MBI to check the warehouse inventory and reorder using FashionCart. This was time-consuming and resulted in a lot of mistakes.” Third, there was the issue of information reliability. Some of the information provided by CVDS’s legacy systems was not reliable or was duplicated. As Marc-Olivier, the warehouse clerk, explained, “When I saw that there was only one left in the inventory system, I couldn’t be sure. I had to go check the binder in the warehouse to see what inventory we appeared to have, then compare it to what was left.” At the end of 2012, CVDS’s management team realized that, with the opening of its five stores, the company had reached the end of its “bricks” organizational strategy phase, and the legacy IT infrastructure was limiting its growth. The time had come to launch the “clicks” phase of its organizational strategy: the deployment of an on-line store – a transactional business-to-consumer (B2C) website. According to Nathalie, the on-line store manager, “It was inevitable, really. All companies sell on-line these days. Not selling on-line makes you look bad.” Furthermore, CVDS saw that the clothing market was changing and that more and more consumers were buying clothes on-line. As the owner, Antoine, put it, “Now that we have fine-tuned what we do and our product line, the on-line store will allow us to review and simplify our structure and processes and focus on the essentials. The on-line store will give us a larger showcase.”

Episode 2 – Ça Va de Soi: The IT Project’s Vision, Strategy, and Description

In early 2013, CVDS’s management team developed a clear vision for the IT project: the on-line store was going to be their sixth store with its own sales and management teams and its own budget and objectives. According to Kinza, merchandising/marketing VP, “the on-line store is a

1 Exhibit 3 presents a detailed description of these three systems and CVDS’s existing IT infrastructure.

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complementary ‘tool’ to support the stores and raise the brand’s profile. The website will be a good tool to bring everything together and see it all in one place.” But to make all this possible, a new ERP system had to be developed and implemented because CVDS’s legacy information systems could not interface with an on-line store. IT project objectives and anticipated benefits

The objectives established by CVDS to guide the development and implementation of the new IT infrastructure (the on-line store and the ERP system) were to enable CVDS to consolidate its operations, maximize sales at its five stores, and jump-start its wholesale business, which had been dormant for more than a decade, by developing business-to-business (B2B) relations with retailers. The new IT infrastructure would allow CVDS to do the following:

1. Simplify data entry and retrieval so employees could focus on key activities such as serving customers, designing new products, and selling

2. Give management access to more accurate information (profit margins, sales trends, product returns, and inventory levels) to facilitate decision making

3. Help CVDS increase sales and profitability by better supporting store employees with both direct and on-line sales. As Kinza stated, “The e-commerce platform will help our sales. It will allow the sales clerks to say, ‘I’m sure I didn’t miss anything that I could have offered to the customer.’ Major efforts will also be deployed to develop a platform that will provide an on-line experience that is as close as possible to the store experience while being complementary to it.”

4. Give CVDS better control over its own direct sales channels. IT project catalysts and success factors

Various organizational catalysts influenced the initiation of the IT project. First, the decision to launch the IT project was made internally. There was no direct pressure from suppliers, customers, competitors, or partners. Second, CVDS’s management team was convinced that the advantages of the new IT system would outweigh its risks and costs. Finally, the overall project goals were clear and communicated to the sales force; the working atmosphere was positive; and office staff turnover was low. CVDS’s management team was aware that the IT project was ambitious and that it lacked expertise with ERP systems and transactional websites. According to Kinza, “On-line sales were new to us and we didn’t know much about ERP systems or transactional websites.” To overcome this lack of expertise, several actions were taken. First, Kinza, who was in charge of the IT project, read up on ERP and transactional websites, attended conferences, and brought herself up to speed. She also developed business relationships with IT consultants, who advised her. Second, an informal assessment of the digital literacy of CVDS employees was carried out. Overall, CVDS employees had good knowledge and skills related to the business processes, practices, data, and IT in place at CVDS. However, they lacked technical skills. With this in

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mind, IT service suppliers that would provide training in that area would be targeted for the IT project. Third, once CVDS’s management team knew what it wanted to accomplish and had a clear idea of its employees’ digital literacy, it sought external funding and support from a research centre specializing in IT: CEFRIO.1 To maximize the project’s chances, CVDS’s management team identified the following key success factors:

1. Clear IT project vision, strategy, and goals 2. Clear, precise IT specifications, and available, clean, reliable data 3. Adequate funding available and approved 4. Top management support 5. Rapid, efficient decision-making process 6. Access to adequate human resources 7. Partner compliance with deadlines 8. Consensus of all parties involved 9. Conflict and problem management process in place 10. Efficient and accurate infrastructure

Next, a project steering committee that included CVDS’s management team was formed. The committee met weekly to discuss and decide on project changes, find solutions to problems, and monitor time lines to be sure the project would be on time and on budget. IT project description: ERP and on-line store The IT project, launched in 2014, consisted of two interrelated subprojects: an ERP system and an on-line store. The first subproject involved the development and implementation of an ERP system by INBIZ, a consultancy in Ottawa, Canada. The main functions of INBIZ’s ERP solution would be to facilitate inventory management in stores and at the warehouse and to manage logistics. The second subproject involved the development and implementation of an on-line store (a B2C transactional website) on the open-source e-commerce platform Magento. Fly Conseil,2 a Montreal-based web agency, was mandated to configure Magento’s templates to meet CVDS’s needs. With the development and implementation of a B2C transactional website, CVDS faced two major challenges. First, in terms of data, CVDS would have to consolidate and clean all the data from its legacy systems to create and maintain rich website content. Second, to support this new on-line store, staff would have to receive programming training so they could support and update certain components of the website.

1 http://www.cefrio.qc.ca/en/cefrio/ 2 Fly Conseil is now merged with Globalia – http://www.globalia.ca/.

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IT project strategic plan and selection process

To carry out the IT project, the CVDS management team developed a strategic plan including the sequencing of the two main phases. The first phase, which was supposed to start in November 2013,1 included the simultaneous development of the two subprojects: (1) the ERP system, and (2) the on-line store. The second phase included the almost simultaneous implementation of the two subprojects. Phase #1 – Subproject #1 – ERP system + software development firm selection: INBIZ

With the new ERP system, CVDS’s main goal was to completely restructure its business practices and processes by (1) centralizing and facilitating inventory management with one system instead of three; (2) increasing the accuracy and reliability of CVDS’s management information and the speed with which it could be accessed; and (3) increasing the amount of customer information gathered. As Marie-Lou, the accountant, said, “Information about customers is a rare and valuable commodity. We want a system that will help us organize and capitalize on that information.”

CVDS’s management team was aware that developing such a system would be risky. To minimize the risk of failure, it analyzed its business situation before selecting a software development firm. It identified and documented all of the company’s processes, practices, business rules, assets (e.g., technology infrastructure, data, employees), and needs/requirements (e.g., management reports, new processes). As Kinza, the team leader, said, “We did a ‘business X-ray’ of our activities to identify the information needed in the system and the activities that had to be supported.” Once the diagnosis was complete, CVDS was ready to select the ERP software and the software development firm. To this end, Kinza attended various industry conferences and participated in meetings with other SMEs to get advice and referrals. She also met with potential software development firms. Based on what she had learned, Kinza developed an evaluation grid to help CVDS make the right decision. However, Antoine, the owner, decided to hire INBIZ based solely on the recommendation of Fadi, the company’s external IT consultant and Antoine’s friend. Fadi endorsed INBIZ because one of his professional contacts worked there. INBIZ was a small company with very little experience in ERP development. CVDS’s project was by far the biggest and most complex it had ever undertaken. INBIZ would be responsible for developing and testing the new ERP system, migrating data from CVDS’s legacy systems to the ERP system, and developing the interfaces with Magento, the selected e-commerce platform. Based on Fadi’s recommendation, CVDS’s management team decided to develop a custom ERP system that would be perfectly adapted to the company’s requirements and business situation. As Nathalie, the web store manager, reported, “On paper, the ERP system proposed by INBIZ seemed like a dream because it was adapted to CVDS’s specific needs and ways of doing business.”

1 Exhibit 4 presents the project activities as originally planned.

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The agreement between CVDS and INBIZ was formalized with a short, basic contract prepared by Kinza and CVDS’s management team. The contract stipulated only CVDS’s main needs, but it did include some success conditions. One of those conditions was the successful bridging of INBIZ’s ERP system and Magento. Since the relationship between INBIZ and CVDS was based largely on trust, CVDS did not include a detailed list of all its needs. Both companies agreed that a complete list would be sent later by e-mail and incorporated in the ERP system. On the financial side, the costs set out in the contract were relatively low since CVDS and INBIZ had agreed that the ERP system developed for CVDS would serve as a showcase for INBIZ and eventually be adapted and sold to other companies in the fashion industry. CVDS would pay $12,000 in development costs, mainly for programming and testing, and $1,000 per month for use and maintenance once the system was launched. Phase #1 – Subproject #2 – E-commerce platform + selection of development agency: Magento and Fly Conseil

In parallel with the launch of the ERP development project with INBIZ, CVDS began its transactional website development project. Kinza and CVDS’s management team undertook a rigorous selection process to choose the right e-commerce platform and web development agency. As reported by Kinza, “Our short list of e-commerce platforms was Magento, Big Commerce, and OpenCart. However, in the end, what was important was to ensure that the technology would support our activities and to have a good relationship with the firm that was going to develop, implement, and support our website. We were looking for a good relationship and for a firm that would help us develop the on-line store. We wanted to build a ‘team’ with that firm.” After checking out several companies and evaluating each platform using the evaluation grid developed by Kinza, the firm selected Magento because its product was open-source and because of the solid reputation it had built since its founding in 2007. Magento also offered a stable e- commerce platform with templates that could easily be configured to meet CVDS’s needs. Fly Conseil, a small but experienced web development agency, was selected by Kinza and the management team to carry out the project. It had carried out more than 600 web-related projects and was familiar with the Magento platform. It would be responsible for configuring Magento to reflect CVDS’s needs and requirements, verifying that the interfaces between the new ERP system and Magento were operating correctly, and developing the e-marketing strategy. Phase #2 – Implementation of the ERP system and the on-line store

The second phase was supposed to start at the end of spring 2014 and include change management, ERP and transactional website rollouts, and deployment of the e-marketing strategy. The management team was supposed to receive training in the new ERP system and the Magento platform first. Then, each store and department head would be responsible for training the employees under their authority. The ERP system and the on-line store were planned to be launched almost simultaneously. This full implementation meant disconnecting the old inventory

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systems, switching inventory to the new ERP system, launching the website, and deploying the interfaces between the ERP system, the website, and the accounting system. Ça Va de Soi’s roles and responsibilities during the IT Project

In addition to coordinating the ERP system and website development projects, CVDS’s management team had two other important tasks to perform. First, the team had to clean data from its various legacy systems by checking for overlapping data, editing and correcting erroneous data, and creating detailed data for each product. Data cleaning was done before the data transfer to eliminate errors and redundancy, increase data reliability and accuracy, and ensure consistency and completeness. Another important task for CVDS was to coordinate the ERP system and on-line store development projects. INBIZ and Fly Conseil were independent firms that had complementary expertise but had never worked together. CVDS therefore had to ensure that the roles and responsibilities of each partner were clear, that the correct information was exchanged between them, and that no conflicts arose. Ça Va de Soi’s preliminary project: Yammer as a learning project

Before launching the main IT project – the ERP system and the on-line store – CVDS decided to implement Yammer,1 a private social network for organizations based on a “software as a service” (SaaS) platform. “Yammer is a kind of Facebook for companies. It works pretty much like Facebook. Each person has a profile, you ‘like’ another person to follow him or her, you can create groups, so each store has its own group, and you can easily share training videos,” said Gabrielle, HR and operations VP. As CVDS’s network of stores had grown, it had become increasingly difficult to centralize and share the enterprise’s values and culture. By implementing Yammer, CVDS aimed to create a sense of family and to give employees experience with their first IT implementation project. The project’s objectives were to (1) have staff assist with implementing a project and ensuring compliance with new rules and procedures; (2) standardize communication between all project team members and employees; (3) communicate decisions and changes adopted by senior management; (4) promote a tight-knit family environment and share employees’ ideas and insights; (5) prepare employees for the upcoming IT project; and (6) build momentum by carrying out a successful IT project. Yammer was configured by Kinza and Marie-Lou, the accountant, and implemented in February 2014. The rules and procedures for how Yammer should be used at CVDS were co-created with the participation of all store managers. Since the rollout, all employees have used Yammer for most of their communications. Even the owner uses Yammer. According to his daughter, Kinza, “He [Antoine] replies and writes on it. It took him maybe a month to get into it.” For most of CVDS’s employees, this implementation was their first experience with a technological deployment. CVDS planned to build on this success for its next IT project.

1 https://www.yammer.com/

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Episode 3 – Ça Va de Soi: Heading Toward an IT Project Failure

From the beginning of the ERP development subproject, discussions between CVDS’s management team and INBIZ were positive and constructive. INBIZ confirmed that it was able to meet CVDS’s specific IT needs and guaranteed that all its existing data would be transferred to the new ERP system. CVDS’s management team was aware of the risks inherent to the ERP development subproject. Data loss during data remastering, cleaning, and transfer was a real possibility. As Gabrielle said, “Our customer information is crucial. Customers want their history to be accessible. It’s basic to our customer-focused approach.” To mitigate those risks, Nathalie, the web store manager, was put in charge of the data. She spent almost all her time cleaning and remastering the company’s data. The management team knew that complete, reliable product information was essential for product development, purchasing from and negotiating with suppliers, launching e-marketing strategies, and keeping customers informed. As Kinza put it, “That information is the ‘brains’ behind our products.” All product data was extracted from CVDS’s inventory systems and exported into Excel spreadsheets. Because of the complexity of the task and INBIZ’s data formatting requirements, the remastering and cleaning took five months, from January to May 2014. INBIZ’s ERP development challenges

The development of the custom ERP system was challenging for both CVDS and INBIZ, probably more so than either company expected. Several challenges stemmed from the fact that the ERP technology platform was actually a distribution system originally created by INBIZ to support the distribution activities of an organization with a single warehouse. So the technological platform had very limited POS functionalities, could not support multiple inventory locations, and was not developed to support retail activities. These features were crucial for CVDS since it is a retail operation with inventory in its warehouse and each of its stores, and its POS system uses advanced features such as loyalty programs and advanced management reports. These technical limitations were not disclosed to CVDS’s management team until several weeks after the project began, when a lot of time, energy, and money had already been invested. CVDS nevertheless decided to continue working with INBIZ since, according to Kinza, the new ERP system would be “designed and developed to [its] specifications.” CVDS’s experience with MBI, Raymark, and FashionCart had shown the company what it needed and helped it to prevent potential mistakes. CVDS had limited IT experience, but it had a thorough understanding of its own business processes and worked closely with INBIZ to explain its various retail practices. Kinza served as an intermediary between CVDS, Fly Conseil, and INBIZ. She worked hard ensuring that all requests were taken into consideration and that the development was going as planned. Originally planned to be completed five months after the project launch (April 2014), the ERP implementation was finally finished in August 2014. Identifying and reviewing key product information and doing the data cleansing required additional workweeks for CVDS, but most

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delays were due to technical problems caused by INBIZ’s technology platform. During the project, almost all of INBIZ’s deliveries were delayed. Extending INBIZ’s original distribution system from a single location to multiple locations was more complex than expected. In addition, developing interfaces between INBIZ’s ERP system and Magento’s e-commerce platform proved to be impossible for INBIZ because the two platforms were incompatible. Implementation of INBIZ’s ERP

The new ERP system was officially launched in CVDS’s five stores and at its head office on August 1, 2014. At that time, the ERP system was still not fully functional and interfaces with the Magento e-commerce platform had not yet been developed, but INBIZ pressured CVDS to launch the system anyway. CVDS agreed because it wanted to have a system up and running before the Christmas season, the busiest and most important retail period of the year. The management team knew it would take several months for the system to be adopted by employees. Originally, the new ERP system was going to be implemented using the “big-bang” approach – turning “on” the new system and turning “off” the old one. However, because of the instability of INBIZ’s ERP system, CVDS’s management team decided it would adopt a “parallel” strategy, using both INBIZ’s ERP and CVDS’s legacy systems simultaneously for several weeks. This meant that employees would have to enter all of their transactions in both systems. Still, as Kinza explained, “it didn’t matter since Raymark was still working, and we had confidence in that system. We kept both systems operational until we were sure that our needs would be met by INBIZ.” To facilitate the transition and train employees, a section of CVDS’s Yammer site was dedicated to the new ERP system. In that section, self-explanatory documents and “how to” videos were posted. FAQs were also posted and regularly updated. After investing time, energy and conviction…

From the outset of the ERP implementation process, CVDS began encountering managerial and technical problems that went on for several months. First, there were recurring system bugs such as incorrect end-of-day sales reports, inventory mistakes, missing or misapplied sales taxes, misplaced or non-functional interface buttons, security issues, and reduced processing speeds. As Nathalie said, “these problems were not communicated [to all CVDS employees] because we did not want staff to lose confidence in the system.” Second, INBIZ kept postponing the delivery dates for the system patches. Moreover, when one problem was fixed, two new ones would appear. Third, INBIZ was unable to develop a bridge between the ERP system and Magento. This situation created conflict between INBIZ and Fly Conseil because each blamed the other for the bridge’s technical problems. The outcome of this conflict was that, despite all the patches developed and implemented and all the time and energy invested by the management team, INBIZ’s ERP was still not working properly in October 2014. Yet Antoine had been paying INBIZ monthly fees for the use and maintenance of the ERP system since August! In October, he asked Kinza to draft a report on the project’s progress. So, later that month, Kinza called a meeting of CVDS’s management team and

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presented an update of the situation. During that meeting, she said, “I believe that INBIZ has been unprofessional and dishonest. We have given them several chances, but I no longer believe them when they say they will be able to build a bridge between their system and Magento.” After that meeting, Kinza decided to meet with INBIZ representatives to let them know how dissatisfied CVDS was with their work. The INBIZ representatives finally admitted that they had not fixed all the bugs to provide a working ERP system and they had no idea how to configure a bridge between their ERP system and Magento, even though that requirement was stipulated in the contract. They then offered to develop an e-commerce website on a Microsoft .NET platform that would link the ERP system to the Magento platform. At that point, Kinza and CVDS’s management team realized that INBIZ had insufficient expertise to complete the project. Finally, in early November 2014, Antoine made a decision. “You know what, we’re jeopardizing our in-store activities and our employees’ confidence; we’re asking our employees to use a system that doesn’t work properly; and we’re all tired. We should do things differently. Enough with this ERP, let’s stop, pull the plug, and take a break.” INBIZ’s ERP system was decommissioned; all CVDS’s operations and transactions were transferred back to its old system, Raymark; and the contract was cancelled because some of the contractual success conditions had not been met by INBIZ. No financial penalties were imposed on INBIZ, and CVDS lost its entire financial investment. CVDS was now back to square one. But it still needed an on-line store more than ever. What should CVDS’S management team do next? 2016-06-14

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Exhibit 1 CVDS’s Management Team

Name Function Task Description

Antoine Nasri Founder and owner of CVDS

• Responsible for product design, supplier/manufacturer relationships, finance and budget approvals

Odile Bougain Nasri Founder of CVDS and head of marketing

• Responsible for CVDS stores and branding

Gabrielle Nasri VP operations and human resources

• Responsible for human resource management, store operations, training, and internal communications

Kinza Nasri VP merchandising and marketing

• Responsible for marketing strategy including campaign management, web strategy, and social networks

• IT project manager Stephanie Boridy Content manager • Responsible for content management (newsletter,

website) • Manages social media campaigns and blog

Gonzales Elpidio Warehouse manager

• Responsible for logistics and warehouse • Manages inventory levels

Fadi External IT consultant

• Responsible for maintenance and upgrading of CVDS’s IT infrastructure

Nathalie Giroux Web store manager • Responsible for the web platform: product entry, data analysis, serving on-line customers, etc.

Marie-Lou Joly Accountant and process specialist

• Responsible for accounting and formalizing business processes

Marc-Olivier Joly Comptois

Warehouse clerk • Warehouse and logistics employee • In-house specialist in Raymark system

Geneviève Labrosse Store manager • Montreal regional manager and head of training for the two stores in Montreal

© HEC Montréal 12 This document is authorized for use only by Julie Bonner ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or

800-988-0886 for additional copies.

Ça Va de Soi: A Phoenix Rises from the Ashes of a Failed IT Project– Part A – The Fall

Exhibit 2 Timeline of Main Events in CVDS’s History

Date Event

1972 • Founded as a knitwear designer and distributor • Focused on quality of both manufacturing and product design • Used information technologies (IT) since its founding

1988 • Strengthened its position in the premium products market and adopted a mission to design products with a soul, a personality

1990–92 • First IT reengineering phase 1996 • Moved into Italy to source the yarn that constitutes the raw material for products 1998 • Second IT reengineering phase 2000 • Significant reduction in sales due to the opening of international markets (more competition from

abroad) and changes in consumer habits 2004 • Third IT reengineering phase 2006 • Opening of first “bricks-and-mortar” store on Laurier Avenue in Montreal

• Entered the retail market (previously limited to wholesale) • Gradually eliminated wholesale and distribution operations • Implementation of new marketing strategy focused on educating customers about fibre quality

and the importance of upscale product know-how 2010 • Opening of second and third “bricks-and-mortar” stores at Ogilvy in Montreal and on Sussex

Drive in Ottawa 2010 • Launch of informational website: http://www.cavadesoi.com/ 2012 • Strategic planning: decided to focus on its stores and its brand and sell on-line

• Opening of fourth “bricks-and-mortar” store on Saint-Jean Street in Quebec City 2013 • Opening of fifth “bricks-and-mortar” store in the Yorkville district of Toronto 2014/01 • Data cleansing of existing inventory systems: MBI, Raymark and FashionCart (5 months).

• Recategorization and creation of fine-grained data on all products 2014/02 • Yammer implementation: to standardize communications between stores and head office,

disseminate CVDS’s culture to stores and simplify business operations 2014/08 • INBIZ ERP Implementation in all stores and at head office. Parallel implementation strategy: all

transactions entered in both the new ERP system and Raymark. 2014/10 • INBIZ ERP Implementation: After two months of use, the new ERP system still had major

problems since no bridge had been developed to the new transactional website developed by Fly Conseil; the management information generated by the new system contained errors and was unreliable.

2014/11 • Company owner decided to stop the IT project and decommission the ERP system 2015/02 • A new IT project was launched with new business partners to develop a simplified “stand-alone”

on-line store without automatic integration into CVDS’s inventory systems 2015/05 • Launching of CVDS’s “sixth” store, a transactional website: https://shop.cavadesoi.com/

© HEC Montréal 13 This document is authorized for use only by Julie Bonner ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or

800-988-0886 for additional copies.

Ça Va de Soi: A Phoenix Rises from the Ashes of a Failed IT Project– Part A – The Fall

Exhibit 3 CVDS’s Existing Information Technology Infrastructure (before projects)

Hardware

Description Computer • 4 stand-alone computers; 7 laptops (IBM and Fujitsu); 1 server; 7 printers; 4 smart phones; 2 iPads Network • Access to a local area network (LAN); access to WAN/VPN (Cisco); Wi-Fi; internal and external

servers (updated last year) Software

Description Personal computer software

• Windows operating system with Microsoft Office • Symantec or Norton security

Management software

• QuickBooks and Ritz (Bright Accounting) used for accounting • ADP (Automatic Data Processing) used for human resource management • ActionPad for memo management • TeamViewer for access to remote computers • No EDI system installed • Outlook messaging used by staff to communicate with customers and other employees • Google Drive scheduling and Outlook used to manage everyone’s tasks and schedules • Dropbox, WeTransfer, Google Drive used to share and gain access to documents • Sales force functionalities used for customer relationship management

Design software • Most of these activities done manually • Adobe InDesign used for catalogue layout and Photoshop for image processing

Production software #1: Raymark

• Point of sale (POS) and inventory system used in bricks-and-mortar stores • Incompatible with MBI and FashionCart • Does not generate inventory reports • Difficult to track customers (no customer relationship management [CRM] function) • Difficult for HR management • No unified communication between stores • Incompatible with the chosen e-commerce platform • CVDS has had some connectivity issues in the last two years that created insecurity • Possible to update the software and/or functionalities but requires a financial investment and must be

done by the software publisher Production software #2: FashionCart

• Used by store managers to send orders to CVDS’s warehouse • Used by Gonzales, the warehouse manager, to order from suppliers • Incompatible with Raymark and MBI • Incompatible with the chosen e-commerce platform

Production software #3: MBI

• Warehouse management and distribution system used to manage inventory in the warehouse • System used to manage purchasing (purchase orders) and receiving (packing lists) • Last updated 11 years ago • Incompatible with Raymark and FashionCart • Incompatible with the chosen e-commerce platform • Outdated system no longer supported by software publisher • MBI server located at CVDS’s head office • Low level of security and redundancy • Many data extraction problems

Production software: Other

• Symbol (now Motorola) bar code system and readers used in stores and warehouse

© HEC Montréal 14 This document is authorized for use only by Julie Bonner ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or

800-988-0886 for additional copies.

Ça Va de Soi: A Phoenix Rises from the Ashes of a Failed IT Project– Part A – The Fall

Exhibit 4 IT Infrastructure Project – Original Plan

Date Planned Activities

2013/10 – IT Project – Yammer – Enterprise social network • Establish CVDS’s requirements, identify possible solutions, and select one

2013/11 – IT Project – ERP system • Establish a list of needs and requirements plus a list of technology and general needs of the new ERP

system: hosting issues, financial system and security, logistics and transport, web platforms, accounts (e.g., QuickBooks, Moneris)

• Compare existing system (i.e., MBI) with proposed system + do a gap analysis • Weigh the pros and cons and the cost differences – IT Project – On-line store • Develop website content: texts, photos, video, and product inventory • Present graphic images and website navigation for approval • Integrate products on e-commerce platform in presented grid: prepare statement for A/B testing of store and

product navigation • Prepare e-marketing plan based on CVDS’s overall strategy: identify social networks to be used • Develop newsletter platform and blog

2013/12 – IT Project – ERP system • Decide which ERP system to implement • Check references and visit selected software publisher

– IT Project – On-line store • Prepare search engine optimization (SEO) plans following key word analysis on Google Trends. Review

every 3 months. • Analyze and plan for a mobile version or application according to site needs the following year

2014/01 – IT Project – Yammer – Enterprise social network • Configure and implement Yammer • Present the solution to employees and launch it • Collect feedback and make adjustments

– IT Project – On-line store • Launch beta version of website: allow one month to change, make improvements, and integrate with social

media 2014/02 – IT Project – On-line store

• Official launch of website: first banner campaigns and social media. Post content on blog. Send first official newsletter to list of active customers

2014/04 – IT Project – ERP system • Full implementation of part one of the ERP system: Inventory and warehouse management, import data and

customer history • Integrate with Magento platform and QuickBooks system • Identify possible options for integrating CRM, SEO, social media optimization (SMO), and supply chain

management (SCM) with the ERP system and the Magento platform 2014/07 – IT Project – ERP

• POS Integration: integrate POS and ERP systems 2014/08 – IT Project – On-line store

• E-marketing SEO-SMO: Maximize and invest in e-commerce campaigns to seek new markets. First cycle: 3 months

– IT Project – ERP • Full implementation of part 1b of the ERP system: integration with QuickBooks, final bug fixes to part 1a,

B2B integration system on the platform • Integrate product life cycle management module

© HEC Montréal 15 This document is authorized for use only by Julie Bonner ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or

800-988-0886 for additional copies.