Why Software Fails

We waste billions of dollars each year on entirely preventable mistakes

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Photo: Graham Barclay/Bloomberg News/Landov
Market Crash: After its new automated supply-chain management system failed last October, leaving merchandise stuck in company warehouses, British food retailer Sainsbury’s had to hire 3000 additional clerks to stock its shelves.

Have you heard the one about the disappearing warehouse? One day, it vanished—not from physical view, but from the watchful eyes of a well-known retailer’s automated distribution system. A software glitch had somehow erased the warehouse’s existence, so that goods destined for the warehouse were rerouted elsewhere, while goods at the warehouse languished. Because the company was in financial trouble and had been shuttering other warehouses to save money, the employees at the “missing” warehouse kept quiet. For three years, nothing arrived or left. Employees were still getting their paychecks, however, because a different computer system handled the payroll. When the software glitch finally came to light, the merchandise in the warehouse was sold off, and upper management told employees to say nothing about the episode.

This story has been floating around the information technology industry for 20-some years. It’s probably apocryphal, but for those of us in the business, it’s entirely plausible. Why? Because episodes like this happen all the time. Last October, for instance, the giant British food retailer J Sainsbury PLC had to write off its US $526 million investment in an automated supply-chain management system. It seems that merchandise was stuck in the company’s depots and warehouses and was not getting through to many of its stores. Sainsbury was forced to hire about 3000 additional clerks to stock its shelves manually [see photo above, “Market Crash”].

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