Computer glitch wipes out millions in funds

Every week I hear about businesses getting in the spotlight because of issues with their IT systems. It's actually amazing how many news stories come out every week, reporting on how consumers or users are impacted by outages, errors or other mishaps. This week I came across this article about an insurance company in Israel letting millions of dollars vanish due to a computer glitch.  

This story illustrates two important points we make in The Opposite of Luck. 1) Errors are a "hidden killer", and 2) Transparency is the best policy.

1) The Elusiveness of Errors

Many IT managers think about making their applications perform well, be available, and scalable. But errrors, as we state in Chapter 3, are a hidden killer where a business can die a death from a thousand cuts. Many IT managers don’t even know about errors. Errors are microorganisms, and these managers are living in the eighteenth century, so they only believe what they can see with the naked eye: large, obvious events, such as a database server crash or a firewall failure.

The insurance company in the article took 5 years to notice the error that was wiping out millions. It needn't be that way. Errors can be detected.

2) Transparency

The insurance company didn't come clean on the problem when it detected it, only making matters worse and severely damaging its credibility.

This is a mistake made both by large corporations like the one in the article, and IT organizations supporting customers. Whether it's at the corporate level or the department level, covering up problems affecting IT service quality always backfires. In Chapter 8 of The Opposite of Luck, our key message is that the notion that using facts, data, and analysis in a completely transparent way across the whole IT organization can make the entire organization work toward your quality goals. In addition to giving specificc examples of scorecards and health reports, we discuss how using this information in various forums builds alignment and
business success.

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