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“The Cloud that Refreshes”

In chapter four I examine the issues around cloud computing, titling the section “The Cloud that Refreshes” because of the struggles organizations are having with the world of information technology.  It’s costly, hazardous and rarely lives up to its promise of better, faster and cheaper. The story that follows drives home the point in terms that would make any CEO consider any and all alternatives:

In 2005 Justin King, British retail giant Sainsbury’s new CEO, took a huge hit when he decided to scrap the mammoth Information Technology project he had inherited from his predecessor. That painful but necessary step cost the company a $526 million investment write-off. The new automated supply chain system functioned so poorly that it could not handle the sheer volume of merchandise customers had ordered. So much of that merchandise had gotten stuck in the company’s depots that Sainsbury had to hire 3,000 extra stocking clerks to fill backed-up orders.

A press release from Sainsbury associated with the write-off summed up the calamity: “IT systems have also failed to deliver the anticipated increase in productivity and the costs today are a greater proportion of sales than they were four years ago…. The rollout of future systems and upgrades has been slowed down while focusing on driving benefits from the systems already in place.” Translated into common English, that corporate doublespeak meant “Sainsbury will go back to using some of its old manual processes.”

  • About The Author

    John Bernard

    John Bernard ‘s work in redefining the fundamental drivers of business performance improvement has led to national recognition as a thought leader in employee engagement. As an equally experienced executive and consultant, his effective articulation of new ways of thinking about management and management systems has led to his forthcoming book, Engage to Win, The Surprising Secret to Extraordinary Employee Engagement. John is managing partner of Portland, Oregon based Mass Ingenuity at Check out John's book at Full

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