Double Jeopardy

CIO —

Published: October 15, 1998

Ernie Aschermann is a good software salesman. He knows how to pitch and he knows how to write code—a rare combination of talents in the software industry. On Jan. 16, 1992, he had a rapt audience in the managers of the Oklahoma City Water Utilities Trust, the public corporation that sells water to the citizens and businesses of Oklahoma City.

Desperate to replace its antiquated customer-billing system, the Trust had invited Aschermann and his sales sidekick, Steven "Pax" Darlington, to give a demonstration of a utility-billing program developed by their company, Network Computing Corp. (NCC). In a small conference room at the Trust's headquarters, Aschermann delivered an impressive presentation. He practically finished the Trust people's sentences for them, showing off his knowledge of the water utility business and his software know-how.

After building up the Trust's expectations, Aschermann finally hit a button on his laptop and the screen filled with arcane references to utility-billing functions. "What I want to show you now is Affinity Revision One," he said. "I'm going to show you this because number one, I don't want you to go away with the impression that there's anything that doesn't exist—any smoke or mirrors." Then he drove the "trust me" point home with a bit of self-deprecating humor. "What's that joke about computer salesmen and car salesmen? At least the car salesmen know when they are lying?"

During the disastrous software project that followed, questions arose as to where Aschermann and Darlington fit in that sales spectrum. Allegations of misrepresentation and fraud would land NCC in court a few years later, where a jury decided that the two men might, in fact, have made great car salesmen. Even within the Charlotte, N.C.-based software company, Aschermann's colleagues had their doubts about his Affinity sales pitch, referring to it from the beginning as "smoke and mirrors." George Mackie, who was president and CEO of NCC at the time, charged that Aschermann "was stretching the truth to his favor."

Unstretched, the truth was that Affinity Revision Two (or Affinity 2.1), which the Trust would later buy from NCC for $1.3 million, was far from being fully developed, contrary to the impression left by Aschermann and Darlington that day. The Trust became an unwitting beta site for a desperate, financially troubled software company that needed a big sale to stay afloat.

Ironically, the ensuing catastrophe was not the first of its kind for the Trust. As the NCC salespeople spun their tale in the Trust's conference room, across town the Trust's hired-gun lawyers were busily preparing legal documents for the Trust's case against Peat Marwick Main & Co. (now known as KPMG Peat Marwick LLP), the accounting and consulting firm that had tried and failed to develop a custom-billing program just a few years prior. Like the NCC debacle, that case also involved an unproven software product encased in a sweet, candy-coated sales shell. The complex software overwhelmed Peat Marwick's well-meaning software developers and the Trust's expensive new computer system dissolved—like the project—leaving a bitter taste in everyone's mouth.

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