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Fixing the payment system at Alvalade XXI: a case on IT project risk management
Tilburg University, The Netherlands Correspondence: RO’Callaghan, School of Economics and Business Administration,Warandelaan 2, Tilburg University, PO Box 90153, 5000 LE, Tilburg, The Netherlands. E-mail: email@example.com
Abstract This case describes the implementation and subsequent failure of an innovative system installed in the bars of Alvalade XXI, the recently built football stadium in Lisbon, Portugal. Casa XXI, the company running the bars, had entrusted the project to an IT supplier who had limitedexperience with large systems. During the inauguration, the system failed spectacularly creating a chaotic situation. The fiasco meant not only a financial loss, but also a blow to the reputation of the company. The management blamed the supplier for the failure. The supplier, however, claimed that the problem was not technical but organizational, that is, poor planning of operations. Subsequenttests were inconclusive and failed to restore trust. At the end of the case, the CEO is considering the possibility to switch to an alternative supplier. He also wonders what they could have done to manage the project and the associated risks more effectively. The case highlights risk and project management issues in large systems implementations. The discussion can be structured aroundcost/benefit analysis, risk assessment, and project management. Relevant dimensions include: company operations, project scope, degree of innovation, technology used, system architecture, supplier selection, and project organization. In addition, the case raises governance questions: Who is responsible for the project? Even if the project is outsourced, how should the roles and responsibilities beapportioned between the company and the IT supplier(s)? What mechanisms should be used to plan and execute IT projects, and control their risks? Journal of Information Technology (2007) 22, 399–409. doi:10.1057/palgrave.jit.2000116 Keywords: risk management; project management; innovation adoption; systems implementation;
Introduction n August 2003, while many Europeans wereheading to the beaches to mitigate the effects of the worst heat wave ´ on record, Jose Eduardo Sampaio, the CEO of Casa XXI, ˜ was faced with another kind of heat.1 Cartao 21, the innovative payment system of Casa XXI that he had personally conceived and subcontracted, had dramatically failed on 6 August during the high-visibility inauguration of Alvalade XXI, the newly built football stadium ofthe Sporting Club of Portugal. Casa XXI had been granted the rights to exploit all the bars and restaurants in the stadium. Based on pre-paid cards, the new payment system was supposed to make bar operations more efficient by eliminating the use of cash. In addition, the system was supposed to give Casa XXI an
image of innovation and modernity enhanced also by all the free publicity itreceived in recent newspapers articles covering the inauguration. The failure of the system represented not only a significant financial loss for Casa XXI but also an embarrassment for the Sporting Football Club as well as a major blow to the reputation of Casa XXI and to the ´ credibility of Jose Eduardo, himself a former football player. ´ Jose Eduardo was quick to point the finger at Meag, the companywith whom he had contracted to design ´ and implement the system. But Jose Almeida, Meag’s manager, claimed that the system worked fine. In his opinion, the nature of the problem was organizational.
Fixing the payment system at Alvalade XXI
He believed the mishap had to with the late activation and distribution of the cards, as well as the lack of training of the...