SSA - $200,000 computer screw-up

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Steve Gibson

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Feb 20, 2002, 10:00:46 PM2/20/02
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Does anybody know why the SSA went $100,000 to $200,000 over budget for a
computer system? Did anybody lose their job over this mistake or is the SSA
being managed like Enron?
Steve Gibson


Nolaminar

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Feb 20, 2002, 10:36:59 PM2/20/02
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computer screw-up?
Wha ARE you talking about?
RE Gaines
USA

Eric Greenwell

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Feb 20, 2002, 11:54:52 PM2/20/02
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In article <C647D30974648817.BEFDFFA8E4614B8B.D19CA2BB6275E9E3
@lp.airnews.net>, l...@pdq.net says...

First, I'm told it was $100,000 to $125,000 over budget - about double
what was expected.

Second, your Regional Director should know, and will be glad to tell
you if you contact him. Give it try; it certainly works with my
region's Director.

Third, the article Al referenced (http://www.glider.com/2002
_spring_ssa_board_notes.htm) at the start of this thread also explains
what happened.

After you've had a chance to inform yourself, could you come back and
tell us if you still think it was an avoidable mistake, and if SSA is
being managed like Enron? That is a really gratuitous insult.
--
Delete the REMOVE from my e-mail address to reply directly

Eric Greenwell
Richland, WA (USA)

LarSwan

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Feb 21, 2002, 12:00:23 AM2/21/02
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>Does anybody know why the SSA went $100,000 to $200,000 over budget for a
>computer system?

I hear the vendor came on the recommendation of the EAA, who as an organization
got clipped for even more.

LT

Bob Kuykendall

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Feb 21, 2002, 12:45:58 PM2/21/02
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Earlier, Eric Greenwell <REMOVEeg...@prodigy.net> wrote:

> Second, your Regional Director should know, and

> will be glad to tell you if you contact him...

Or her, as is the case for us Sillycon Vally folks (Hi, Karol!).

I am personally not at ease with the idea of a national organization
that is ostensibly constituted of soaring pilots, for soaring pilots,
and by soaring pilots, but which in actuality offers so little
visibility into its internal operations. I think that information
about ongoing operations, including the occasional blunder, should be
published for all to see. I think that asking regional directors for
information is fine for administrivia such as, "what are the camera
rules for 2002" or "why did the post-Barstow Schreder trophy briefly
look so strange?" But when it comes to six-digit red ink, I'd think
that there would be a report, complete with post-mortem teardown and
lessons learned. I'd think that it was within my right and privilege
to expect that the report would be readable, understandable, and most
importantly, open and easily accessible.

Veering off on a tangent, as I have been at pains to respectfully
bring to the President's attention, if the SSA is to survive as an
organization, it must ask its constituents for more than just money.
It must ask for commitments of their time and attention. It must
demand occasional contributions of their professional expertise. In
return, it must open to our scrutiny its internal processes and
mechanisms.

Now, this is sure to get me in trouble later, so read on carefully.

Soaring pilots, statistically and in general, are rich people. The
very great thing about soaring pilots is that the general run of them
are rich not because they are greedy, but because they are smart,
resourceful, and love challenge. It is those characteristics that make
them rich and powerful even when they don't have much money. It is
those characteristics that make them my favorite people on all of the
earth. It is those people for whom I devote a great deal of my
personal time to a business enterprise that consistently loses money
in the most charming and fascinating ways. It is for those people that
I don't begrudge a single moment or dollar of it.

Select powerful yet cost-effective computers with a long
time-to-obsolescence? No problem. Any three of the contestants in the
Air Sailing contest could do it with a week's homework. Select
components for a scalable yet low-cost switched network with lotsa
bandwidth, Intraweb features, a firewall, and reasonable network
management? Gotcha covered.

Install the network and bring it up, complete with the inevitable
frisbee-toss contest conducted in the parking lot with broken ceiling
tiles? Two of us will buy our own airline tickets, and chip in for
tickets for a third. Four of us will converge on a rental car. Six of
us will show up at Hobbs. Five days days max, but you gotta buy us
dust masks and supply the insulated ladders.

If the SSA is really in the mess that it looks like it is, I propose
that it can only be so because the SSA has turned its back on its own
constituents. They had at hand a huge constituency of the smartest and
most resourceful people on earth, and didn't take the trouble to ask
them for advice or help.

We may even find that advice was offered, and not accepted. I know
that I've offered my own time, what little of it remains free, to help
make improvements and to keep things moving. I've waited yet a week
for a reply, and intend to wait patiently another couple or three
before I lose my good humor.

To those who would challenge the SSA regarding the computer system, I
suggest that you study, or at least survey, the bylaws. They're
published right here on the www.ssa.org Web site:

http://www.ssa.org/Bylaws.asp

In specific, see ARTICLE VIII, SECTION 2, which says:

> "Annually, after the close of the fiscal
> year, the books and accounts shall be
> audited by an independent accounting firm
> and the findings and opinions of the firm
> published and distributed to the Directors,
> and to others requesting same."

The part about the independent accounting firm is a bit of a hoot, and
does serve to clarify an earlier comparison between ENROFF and the
SSA. But don't stop with that cheap (or at least inexpensive) shot.
The important thing is that the report is specifically to be
distributed to directors "and to others requesting same." Not
published. Not printed. Not placed on the Web. Just handed out to
those who request it. There it is, in black and white. Ask, and ye
shall receive. Eventually.

Another of the SSA bylaws that we might find of interest is ARTICLE X,
SECTION 1:

> "These bylaws may be amended at a regular
> meeting by the affirmative vote of
> two-thirds of the whole Board of
> Directors."

SSA members, I propose that we campaign our directors to take
advantage of article X, section 1 to change the bylaws to require the
publishing of the fiscal report, and other such operational documents,
in some cost-effective manner. I'm sure that we could craft some
verbiage that basically says that it goes on the SSA Web site, or is
to be published in whatever reasonable and accessible manner is deemed
appropriate by thus and such a committee. Which in this year and the
next three or so essentially means Adobe Acrobat format .pdf files on
the Web or via an autoresponding email address at ssa.org.

SSA directors and administrators, I suggest that you be on your toes.
I'm a do-it-yourself kinda guy, and I think that the Society should be
more of a do-it-yourself kind of organisation. One of these days some
damn fool is gonna nominate me for some office or other, and when it
happens I do not intend to sit on my butt. If you see me getting any
closer to Hobbs, keep you an eye peeled.

Please address private comments, concerns, flames, propositions, and
admonishments to:

mailto:b...@hpaircraft.com

I will respond with as much care and thought as I have time for.

Thanks, and best regards to all

Bob K.
http://www.hpaircraft.com

Thomas Knauff

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Feb 21, 2002, 8:51:39 PM2/21/02
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Finding out the actual details about the new computer purchase is not easy.

Before, during and after the SSA convention, I spoke with several officers
of the organization. The following is my unerstanding:

The old computer system was sadly outdated and with Y2K coming up it was
decided to search for a replacement system.

The full SSA board of directors approved an $85,000 expenditure. I spoke
with several directors who had no prior knowledge of the huge final
expenditure.

Several well known and highly visable SSA members who are computer experts
were never consulted. It is possible others were so consulted.

For many reasons the cost overruns for the new system ran up to "over"
$250,000 however, the SSA made the company make concessions the EAA did not
make. The annual cost to keep the system running is $60,000.

It was stated at the SSA Membership meeting the new system will pay for
itself in the long run.

For me, the disturbing issue, if true, is a very small group of people were
able to make a financial decision that could bankrupt the organization.

Finally, it was admitted, in so many words, if the same scenario were to
occur, it would not happen again, and some officers expressed regret for the
decisions made.

Bottom line - it was a bad decision, but we need to get on with the business
of doing business.

It would be appropriate for the SSA to publish more details.

I intend to publish more information about the SSA convention in my
newsletter as this newsgroup format is not one I enjoy. You may subscribe on
our web site listed below.

--
Thomas Knauff
Knauff & Grove, Inc.
Schempp-Hirth Sailplanes
3523 South Eagle Valley Road
Julian, Pa 16844
Phone (814) 355 2483
Fax (814) 355 2633
www.eglider.org
"LarSwan" <lar...@aol.com> wrote in message
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Alan Reeter

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Feb 21, 2002, 10:57:47 PM2/21/02
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I begin by certifying that I asked three SSA directors about the computer
deal prior to and during the SSA convention. All were concerned but they had
very little in the way of facts. One opined that he didn't think many on the
board understood what happened. That director was not Tom Knauff, although
he implies the same thing.

Larry Sanderson, you would do the membership a great service by providing
this newsgroup with some additional information. Then, hopefully we can put
this behind us. Specifically,

1. What does this computer system do that couldn't be done with custom
configured, off the shelf software? I know of a business remarkable similar
to the SSA. It's a for-profit with similar revenues. It tracks 11,000
customers, publishes, maintains inventory, and manages large mailings. That
business operates with Quick Books Premium (the $500 networked version),
$5,000 worth of contact management software, and two computers. I've heard
other computer savvy SSA members express similar concern. You could help
stop rumors by helping us understand this.

2. What is the yearly cost of maintaining the software? From my experience,
5 to 15% of the original purchase price is typical. Assuming that the
original cost was $250,000 this would amount to $12,000 to $37,000. Tom
Knauff's report of $60,000/year must be an error, right?

3. Has the board considered dropping the system, or at least, consulting
with knowledge individuals about replacing the system? Perhaps a better way
of asking this is; When the board approved the annual upkeep for the
software did it ignore the original sunk costs. (For those who don't know a
"sunk cost" is a cost incurred in the past that will not be affected by any
present or future decision. Sunk costs should be ignored in determining
whether a new, or continued investment is worthwhile.)

4. How was the money for the entire system approved? Tom Knauff's post
indicates that the entire board originally approved the initial $85,000.
When and how were the remaining amounts approved?

This is not just about computers. It's about the SSA's priorities. The SSA
spends almost no money or no detectable effort at marketing. Alternative
uses of that computer money might have included; funding a full time
marketing person, producing several broadcast quality videos for cable,
providing FBO's with marketing assistance.. well you get the idea.

Alan Reeter


"Thomas Knauff" <tkn...@earthlink.net> wrote in message
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John Shelton

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Feb 21, 2002, 11:23:02 PM2/21/02
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I would like to point out that the use of Endrun in Pez is not a gratuitous
insult but merely a coincidence. Same-o for the reference to QuickBooks.
Just luck of the draw.


"Eric Greenwell" <REMOVEeg...@prodigy.net> wrote in message
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John Shelton

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Feb 21, 2002, 11:24:14 PM2/21/02
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Good. I like being the second stupidest sucker in a scam.


"LarSwan" <lar...@aol.com> wrote in message
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John Shelton

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Feb 22, 2002, 12:16:27 AM2/22/02
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The truly infuriating thing about this fiasco (which we have all known about
for 8 or 9 months) is that the information has NOT been made available. It
has been hidden for some reason. And that action has caused distrust.
Doesn't everyone know the PR maxim that you reveal it as soon as possible,
take the hit, and move on?

I think irreparable damage has been done. Sure, the purchase was dumb and
the maintenance contract may be dumber. But the biggest damage is done to
trust. When the membership rates are raised, what is that for? To pay for
marketing of the sport? Do you believe it is for an increase in phone calls
and travel expenses due to the 9/11 crimes? Or do you think it is to pay for
this fiasco? I really don't know. I just know that I would not have asked
those questions 8 or 9 months ago.

That's human nature. Reversing distrust is a pretty hard thing to do.

Just be forthcoming with the information now. Sooner would have been better.
But, it is truly better late than never.

"Steve Gibson" <l...@pdq.net> wrote in message
news:C647D30974648817.BEFDFFA8...@lp.airnews.net...

Chris OCallaghan

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Feb 22, 2002, 10:29:17 AM2/22/02
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Yikes! I thought my comments on Alan's and Tom's posts would be short.
Ah well, here you go:

Better orgs than the SSA have repeatedly fallen victim to system
development cost overruns.

The fault lies not with the vendor, but with the org for not doing its
homework.
Orgs that caredfully manage their development project budgets almost
always start with an outside consultant to establish requirements and
objectives. The 10% they spend on total project costs up front will
typically save 5 to 10 times that amount by the end of the project.

Most orgs don't fully understand what they want until well into
development, when it starts getting expensive to deconstruct what's
been done. That's why many developers are adopting iterative
development strategies. Harder to sell since they are more expensive
from the outset, but save the client money at completion. (Imagine
saying, in a subtler way. "Look friend, you're really not nearly as
smart as you think you are. In fact, I suspect you don't even really
know how your business works. Why don't you spend a few more bucks up
front and we'll teach you about your business while building you a
system that makes sense.") Automating processes requires unravelling
their logic. Where there isn't any, then you have a new design chore
to fulfill. The effect is cascading. That's why it is so critical to
do your homework...

Asking SSA members to volunteer to do this type of work is
unreasonable. Few have the expertise in all the needed areas, and
assembling the expertise would be very difficult. The likely outcome
would be a less costly system that did not meet its objectives.

Maintenance is typically 15% of product price (services not included).
Enterprise maintenance contracts run closer to 20 to 25% of product
price. If an org does not have a technical staff, maintenance will
often include a fixed number of "use or lose" monthly consultant
hours. If you figure 20 per month at $150 per hour, you can see how
the annual service contract can start going through the roof.

The SSA, though not rich, is probably a pretty easy sell. Since they
are far from any substantial business center, I suspect it would be
tough for them to get a reasonable sampling of vendors out to show off
their wares. They probably could have found a cheaper system, but what
sales team is going to make the trek out to Hobbs for a $50K sale?

I too felt like someone needed to lose his job over this. But if that
were to happen in all such cases, I'd have no one left to do business
with. Most people think such systems happen by Magic. Enough
developers on this board to know that's not the case. It involves alot
of hard work, and if the system is mission critical, add another 50%
on top for business analysis, QA, testing, a development environment,
a testing environment, and the production environment. And do you want
documentation? And training? There's much more to business savvy than
uderstanding your own business, though that's a pretty good first
step. You need to understand your partner's business too. The SSA just
didn't do its homework. But that just makes them members of a very
large majority.

I was at Barnes and Noble a couple of weeks ago. That org has business
modlers on staff! They contract them out to divisions with development
needs. Very unusual. Very smart.

Caracole

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Feb 22, 2002, 11:13:22 AM2/22/02
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"Bob Kuykendall" <b...@hpaircraft.com> wrote in message >
snips

> But when it comes to six-digit red ink, I'd think
> that there would be a report, complete with post-mortem teardown and
> lessons learned. I'd think that it was within my right and privilege
> to expect that the report would be readable, understandable, and most
> importantly, open and easily accessible.

Exactly the way I feel.

> If the SSA is really in the mess that it looks like it is, I propose
> that it can only be so because the SSA has turned its back on its own
> constituents. They had at hand a huge constituency of the smartest and
> most resourceful people on earth, and didn't take the trouble to ask
> them for advice or help.

> We may even find that advice was offered, and not accepted. I know
> that I've offered my own time, what little of it remains free, to help
> make improvements and to keep things moving. I've waited yet a week
> for a reply, and intend to wait patiently another couple or three
> before I lose my good humor.

> SSA members, I propose that we campaign our directors to take


> advantage of article X, section 1 to change the bylaws to require the
> publishing of the fiscal report, and other such operational documents,
> in some cost-effective manner. I'm sure that we could craft some
> verbiage that basically says that it goes on the SSA Web site, or is
> to be published in whatever reasonable and accessible manner is deemed
> appropriate by thus and such a committee.

The above statements and many others recently posted by
Tom Knauff, Alan Reeter and John Shelton do reflect the
sentiments of a large segment of the SSA membership.

At the general membership meeting at the convention, I watched one
member ask two questions about the computer issue. Basically Mr.
Sanderson said that these types of cost over runs are typical. And
that we should be thankful that he kept us from getting screwed as
bad as EAA. What a line of crap. In corporate America, if a CEO
mismanages a company to the point of nearly bankrupting it, there
would be little doubt that his head would roll. The idea that they
would expect a pat on the back is ludicrous.

Tim Wells replied to this member by saying that all the directors were
involved each step of the way, and it was old news and we should
move on. To an untrained eye this could have been mistakenly
been interpreted to mean "sit down and shut up".

At the commercial business operators meeting, Mr. Sanderson told
us that this was the first convention where the convention was
structured to be a means of promoting soaring to the public, rather
than just a trade show. I sure wish someone could explain to me
what SSA did to promote the convention to the general public. I
talked with volunteers who were selling day passes at the
convention. They were indeed keeping track, and they said there
were but a few handfuls of the non affiliated general public that
attended.

I live in Southern California, and none of our customers is aware of
any advertising that had been done on radio, TV, or newspaper.

In closing, for those of you who went to the convention, did it
seem strange that not one Southern California based FBO
bothered to have a booth? If you can't figure that one out, then
you're definitely in that portion of the membership that thinks the
SSA is doing a great job.

Discontent is often the beginning of change.

M Eiler


John Shelton

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Feb 22, 2002, 11:46:53 AM2/22/02
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You Irish marsupials can really think out of the pouch.

"Chris OCallaghan" <fiveni...@yahoo.com> wrote in message
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Raphael H. Warshaw

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Feb 23, 2002, 12:19:02 AM2/23/02
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Tom:

I agree that it's time to get on with business, but the same business in the
same way and place? The dues increase needed to pay for this will likely
cost us members pushing us further to the margins of visibility and clout.
What safeguards are in place to prevent a reoccurence of this sort of
fiasco? Who takes responsibility and what are the consequences?

Raphael Warshaw
Claremont, CA

"Thomas Knauff" <tkn...@earthlink.net> wrote in message
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F.L. Whiteley

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Feb 23, 2002, 11:43:43 PM2/23/02
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"Chris OCallaghan" <fiveni...@yahoo.com> wrote in message
news:236582a0.02022...@posting.google.com...

Quite right, about 65% of IS projects fail due to the lack of adequate
system/project analysis. In other words, the manager doesn't know what the
user needs and contracts for the wrong services/project specification.
Primarily, it boils down to too little front end work (cheap). It's as much
the fault of the vendor as the customer. My teams have turned away work due
to unrealistic or ill-defined customer demands or expectations. Secondly,
the spec can't be a moving target. I'm sure we don't have the full story,
yet. Whether fiduciary irresponsibility is involved remains to be seen.

Frank Whiteley


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