Posted on 02/11/2016 10:41:34 AM PST by Swordmaker
Unmanageable deadlines and disastrous IT wrecked this top US retailer's attempt at international expansion. The moral of the story: IT drives the enterprise.
Business school case studies tend to fall into two categories: epic wins and oh-my-gosh-how-could-they-possibly-have-been-so-stupid epic failures. This article discusses a real-world billion dollar story that falls into the second category. As epic failures go, this one is worthy of the history books. . .
EVERYTHING WENT TERRIBLY, TERRIBLY WRONG
. . .
(Excerpt) Read more at zdnet.com ...
It was a Canadian Software Company that was contracted to build the software for ObamaCare? I wonder if it was the same company who was contracted to do this job for Target Canada? It sounds like the same kind of Fiasco. . . It resulted in a similar FUBAR, only Target Canada did not survive the It disaster.
It’s off the topic of Retail, but certainly no one does IT worse than the feds. Obamacare, Office of Personnel Management, IRS system upgrades, etc. etc.
They screw it up every time. But they never go out of business.
Lack of inventory at the stores due to the computers not being able to talk to each other is what killed Target Canada. The same inventory problem is happening now in US Target stores
Any government agency. They are always resistant to change. If you still have a 9 track tape machine in your office, it is because you send data to the government.
It’s the same reason every CPA office has a fax machine.
Fedgov IT has two problems:
1. It has no competition, and a limitless money trough to feed from, therefore there is no incentive to provide a serviceable project.
2. It’s client is a gigantic unaccountable spending machine that is so large, and simultaneously so dysfunctional, that even the best IT services in the world would be overwhelmed by the task.
Computers and IT had squat to do with this failure. Bad business decisions and putting their faith in ‘omnipotent’ computer systems is their downfall. The largest consumer retailers in the world from the 19th century to late 20th century didn’t rely on computers, and they did just fine.
Sounds a lot like KMART.
They had a disastrous inventory management system that was actually only part of their problems.
My guess is that based strictly on chronology the original Target systems were developed by US contractors and thanks to visa and offshoring mania the contractors for the Canada expansion were, shall we say, less than perfect speakers of English, especially the idiomatic kind.
Excellent article. Thanks for posting.
I live in East Canada. I watched as our former Zellers location was gutted, expanded and completely done over in the process of a year, then went to the newly opened Target to check it out.
The place was like... a TOMB. The lighting, the atmosphere, so much red it almost looked like a Communist showplace. I know it’s the chain’s signature color, but come on! There was hardly a soul around. The goods looked like Zellers quality at Sears prices. I’ve seen cheerier and more welcoming funeral homes. No thanks and good riddance.
Interesting. I have been in 3 Target stores in the past 4 days in the San Jose, CA area looking for pet food. two stores were out completely and the 3rd had 1 package. I also shopped for food and noticed bare shelves and empty freezers. They were out of most bread but no problem with soft drinks though. I suspect that those vendors track and stock that themselves. I was wondering what was going on and this may be the explanation. Worrisome as it is not rocket science. I learned how to calculate the appropriate reorder point and the optimal reorder quantity in Biz school in the mid 80’s.
Target also gave the impression that customers would receive the same Target experience they had known when visiting the States, like getting Target exclusive products. Canada’s bilingual laws made this impossible because too many manufacturers weren’t willing to change their labels to comply with the law, so a lot of products that would have sold here couldn’t be brought.
Another thing they did that screwed themselves over was that they were in such a hurry to open big is that they opened twice the number of stores than they probably should have, requiring them to maintain an unrealistic level of sales to maintain.
A third factor that killed Target in Canada was that Canadian retailers outright mauled them. Wherever there was a Target, retailers surrounding their nearby stores to drop their prices and allowed those stores to lose money. So, while select Wal-marts, or Canadian Tire, or Home Depot or whatever store would lose money, every Target was guaranteed to lose money.
Try running your business without it.
You’re thinking of CGI.
I’m in Calgary and I agree with you. It was like a re badged Zellers instead of the much broader selection I saw at a Seattle Target.
I wanted to spend some money with them because they spend a bundle on auto racing, but they had nothing I wanted.
Cheers,
Jim
You just described my ex.
The Kmart in my town seems to have been reduced to a skeleton crew in terms of employees ever since Wal-Mart opened nearby; I was shocked that it didn’t close. I was buying some little thing in electronics and I noticed that eventually a half dozen of us were waiting at an unattended register (initially thinking someone had run to the can or something). I would have simply brought it to the front but I needed something in a locked case. Eventually an employee behind a nearby jewelry counter saw us and called someone on the PA; someone came, rang us up, then left again.
I don’t think this store is long for this world; there is another a couple of miles north (the opposite direction from Wal-Mart), and they will be opening a Costco or something next door that will drain off even more sales.
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