Introduction:
The paper discusses a classical example of why projects fail. The Denver International Airport Baggage Handling System is one of the most telling failures of why projects fail when there is ineffectual decision making
The project:
The Denver airport baggage handling system was considered to be one of the world’s largest automated airport baggage handling system. Confronted with the need for greater airport capacity, the city of Denver selected to construct a new state of the art airport that would cement Denver’s position as an air transportation hub. Covering a land area of 140 Km, the airport was to be the largest in the United States and have the capacity to handle more than 50m passengers annually. The airport 's baggage handling system was a critical component in the plan. Thru automating baggage handling, aircraft turnaround time was to be reduced to as little as 30 minutes. Quicker turnaround meant more efficient operations and was a cornerstone of the airports competitive advantage.
The project failed because it was too ambitious. The project’s complexity resulted in so much of public humiliation that the opening was delayed by almost 16 months. During this intermittent wait the expenditures to maintain the empty airport and interest charges on construction loans cost the city of Denver $1.1M per day throughout the delay. The most important reason for the failure of the project and the long delay was due to ineffective leadership.
Leadership:
646). Both stakeholders have valid ideas but this contrasting battle pushed all decisions toward reactionary efforts. There is a need for a win-win situation for those decisions but no proper process was in place to balance the issue. The city of Denver also allowed United Airlines and Continental to make major scope changes to the project construction. The increase in scope changes meant increase cost, more work and more delays were on the way. This in turn, will hinder the project construction’s progress. At this point of major scope changes, the airlines still had no signed agreement.
The New Denver Airport represents a model airport of the future. It was also planned to be the second largest hub, having huge local commitment and it was financed by a lot of different sources.
1. Why don’t information systems projects work out as planned? What causes the differences between the plan and reality?
Projects failure can often be brought about through their initial concept and planning stage. The creation of the projects goals and aims are outlined during the concept stage of the project. Here a failure to understand what the project is trying to achieve can result causes failure due to potential for unplanned growth and scope which further exacerbates the budget eventually pushing it over limit due to increased costs. An example applicable to this Target, with its attempting to pierce the Canadian retail market. Target’s entry level strategy entailed purchasing 189 leases from Canadian retailer Zellers(2) which operated in a similar market to Target, this allowed them to an access point to major retail outlet sites across Canada however
*A lack of efficient and effective communication between the city, project management team, and consultants. This manifests itself in basic issues like vendors blocking roadways for other vendors, the city canceling orders for electrical filtering components that were critical path, and too many unilateral decision made because "no one was in charge".
Shared leadership between city of Denver & Consultant team created many inefficiencies, duplicate work and lack of real ownership. Additionally no organizational structure change at DIA was ever made to accommodate this new baggage system project. Further complicating the matter was the communication channels and roles between city, PMT and consultants were not defined or controlled. All were working in silos.
Its operational capacity was severely limited by runway layout; Stapleton had two parallel north-south runways and two additional parallel east-west runways that accommodated only commuter air carriers. Denver’s economy grew and expanded greatly in the early 1980s, consequent to booms in the oil, real estate, and tourism industries. An aging and saturated Stapleton Airport was increasingly seen as a liability that limited the attractiveness of the region to the many businesses that were flocking to it. Delays had become chronic. Neither the north-south nor east-west parallel runways had sufficient lateral separation to accommodate simultaneous parallel arrival streams during poor weather conditions when instrument flight rules were in effect. This lack of runway separation and the layout of Stapleton’s taxiways tended to cause delays during high-traffic periods, even when weather conditions were good. Denver’s geographic location and the growing size of its population and commerce made it an attractive location for airline hubbing operations. At one point, Stapleton had housed four airline hubs, more than any other airport in the United States. In poor weather and during periods of hightraffic volume, however, its limitations disrupted connection schedules that were important to maintaining these operations. A local storm could easily congest air traffic across the entire United States.3
In the early 1980’s, Denver experienced significant economic growth due to the booming oil, real estate, and tourism industries. The major airport that operated within Denver during that time was the Stapleton Airport. Up to 1970, the Stapleton Airport was able to accommodate the demands of Denver but in subsequent years it was unable to meet the ever growing needs of the city. The Stapleton Airport was seen as a liability and limited the attractiveness of businesses that were swarming to it. Issues with handling high traffic volume, disruptions in connection schedules, and an overall poor airport layout led the city of Denver to decide whether they wanted to expand or replace the Stapleton Airport. A study performed in 1983
Dysfunctional decision making is the poison that kills technology projects and the Denver Airport Baggage System project in the 1990’s is a classic example. Although several case studies have been written about the Denver project, the following paper re-examines the case by looking at the key decisions that set the project on the path to disaster and the forces behind those decisions.
From the city of Denver’s perspective, it was an easy choice to award BAE Automated Systems with the contract. The initial project design (as cited in Montealgre et al, 1996, p. 8) did not incorporate an airport-wide baggage system; the city expected the individual airlines, largely consisting of United and Continental Airlines, to build their own systems in their respective concourses as in most other American airports. The city sent out initial requests for bids to take on the first attempt at implementing such a complex baggage system, with not much response. Eventually they had no choice but to approach BAE, whose superior reputation in the field of baggage handling had already motivated United Airlines to contract them to design their baggage handling system. This system was to be implemented in United’s Concourse B without integration with the other concourses (Montealgre et al, 1996, p. 8). In return, BAE offered the city of Denver a proposal to develop the “most complex automated baggage system ever built” (Montealgre et al, 1996, p. 9). The whole DIA project was to be a public works project involving many shareholders with various financial sources and intentions. The main shareholders
At first, identifying the potential problems. Though I will pay more attention to the top three classical problems, it is necessary to analyze other potential problems in specific project by investigating similar IT projects that is “Failure” or “Success” before kicking off project. The “similar” can be explained in many aspects, such as same goals, cost, scope, same industry, background and so on. I need to investigate how such similar project fails. For example, we assume that a company want to launch an ERP projects recently. In this area, there are many companies did it before. Failure of high-profile ERP projects is common. In order to avoid mistakes that usually occurs in such IT project, it can investigate many failure projects, such as Airforce, Saudi Telecom and so on. The project failure of Airforce due to the following reasons: weak teamwork & composition and lack of top management support. The Saudi Telecom’s failure attributes to lack of top management support, inadequate of company culture, and huge system customization (Aldammas & Al-Mudimigh, 2011). As you
Case Review Analysis of the Denver International Airport And Its Baggage Handling System Warner Sherman
thought in this area being: how success is judged and the factors that contribute to the
Lack of project management clarity: the planning activity had lot of material but lacked content, clear action items and lack of consensus on the milestones. The difficulties in the project only increased with time and a more performance driven style would have kept things on track if introduced early on.
The 1989 Denver Airport project was necessary to replace Denver’s antiquated airport with a modern facility. This would significantly reduce passenger turnaround time. This project has been considered a major failure when it comes to project management. One could argue that this project failed in all aspects; from planning, to design, to implementation; the project was doomed from the start. According to Kirk Johnson, a Chief Editor for the New York Times, “[d]ecentralization and mobile computing technology have taken over just about everything, allowing airlines, warehouse operators and shippers like FedEx to learn with just a few clicks the whereabouts of an item in motion, a feature that was supposed to be a chief strength of the baggage system” (Denver Airport Saw the Future. It Didn't Work, 2005.). With so many points failure, it is hard to focus on what caused the project to fail, but what we know is that a project of that magnitude required much more planning.