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Project Management: AT&T Wireless Self-Destructs

Jack Lee marked Nov. 24, 2003, on his calendar because that was the day he would finally be able to ...

 

April 15, 2004CIO

Jack Lee marked Nov. 24, 2003, on his calendar because that was the day he would finally be able to change his cell phone carrier without losing his phone number-thanks to a Federal Communications Commission ruling. But Lee, president of Tangara Technologies, a company that develops software for forms, decided to wait a day before switching to AT&T Wireless to let the chaos of "number porting" die down a little. Little did he know that the chaos was just beginning.

Lee ordered his new phone on Nov. 25. When he went to the AT&T Wireless website to check the status of his order a day later, he was greeted with a message: "We could not find a porting request for this number in the system. Please contact Customer Care." It was the beginning of a two-month odyssey in which Lee estimates he made 15 to 20 calls to AT&T Wireless, sent nearly as many e-mails and spent 60 hours on the phone dealing with customer service representatives or waiting on hold-with the line often going dead when AT&T Wireless’s customer service lines became overloaded.

After being routed all over the company, Lee finally discovered what was going on. A major CRM system had crashed during an upgrade, and customer service representatives could not set up or access new accounts. The system breakdowns, which continued through February 2004, swamped other AT&T systems, gridlocked customer service phone banks and sent furious customers scurrying to other providers.

The breakdown couldn’t have come at a worse time for AT&T Wireless. It deprived the telco of thousands of potential new customers and cost the company an estimated $100 million in lost revenue. But that wasn’t all. The failure so damaged AT&T Wireless’s reputation that many analysts believe it hastened its sale to Cingular in February for $41 billion, or $15 per share, which was just under half the value of AT&T Wireless’s shares when it went public in April 2000. While an AT&T Wireless spokesman says the company would have been sold regardless of the fiasco because "it was the right thing to do," the crash and resulting confusion could not have helped AT&T cut a good deal. "The system problems made AT&T look like a wounded provider, and the sharks smelled blood and circled," says Roger Entner, a wireless and mobile services analyst at The Yankee Group, a research company.

AT&T Wireless’s mistakes offer valuable lessons for CIOs. For one, it’s unwise to freight major system upgrades with external complications. AT&T Wireless’s CRM upgrade was hamstrung from almost the very beginning by rumors of outsourcing deals and future layoffs. These rumors generated pervasive morale problems that hurt the productivity of project staff.

 
 
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WHITE PAPERS

Top 10 Habits of Highly Effective PMOs

This white paper outlines the top ten habits necessary to make your PMO more effective and maximize its benefit to your organization.
 

Why an Enterprise Project Portfolio Management, EPPM

Beyond traditional project portfolio management, Primavera P6 EPPM improves visibility into every aspect of the project manufacturing process.
 

Does Your Organization Need a Project Management Office?

Read this paper to find out if a Project Management Office (PMO) could be your solution.
 

Making Earned Value Management Work for Every Project

Earned Value Management (EVM) allows you to predict your project results within 15-20% of completion, in time to make a difference.
 

Project Management Office Best Practices

Once best practice basics are in place, the PMO has demonstrated improvement in project delivery and the office has gained credibility.
 

Automate and Accelerate with Project Management

This white paper asserts that the common thread that must run through all phases of project manufacturing is a Project Portfolio Management (PPM) system.
 

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The Last Software You'll Ever Buy? The CRM Platform as Development Platform

Join Stan Gibson the principal of Stan Gibson Communications and CDC Software's Scott Munro for an engaging discuss...
 

Real World Performance: More Than Just Benchmarks

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