The DHL IT disaster — and what we can learn from it

The logistics enterprise DHL Digital Forwarding is rumoured to be up for sale for a knock-down price. Reuters says Deutsche Post wants to get rid for around $4-5 billion, something the company has flatly denied. Whatever the true ins and outs of the business dealings going on behind the scenes, we're here to talk about why that rumoured price is so low: namely, the problems the firm has had with scaling up and developing its IT systems.

Logistics is one of the key areas where businesses can really get ahead. Consider Amazon, Uber or new initiatives like Deliveroo — they all succeed because they excel at logistics, the 'magic ingredient' that makes sure your paperback book turns up on time or connects waiting taxi drivers to customers stood on the pavement. For another example, look at the way John Lewis invested heavily in logistics for last year's Black Friday.

It's therefore no surprise that DHL prioritised the need to succeed in logistics, having spent some $10 billion on acquiring logistics and freight forwarding firms since 2000. While these were all successful and flourishing businesses before DHL picked them up, they've since been crippled by attempts to integrate all of the various IT systems they use across the board.

Essentially, logistics (like so many other processes) really depends on software to make everything tick — that's the kernel of truth that makes these Little Britain sketches so funny and so accurate. Deutsche Post tried hard to make it work, spending €750 million in 2012 alone: that's the equivalent of hiring between 10,000 and 15,000 people for a single project, but as we've written before, large teams don't always outperform small ones.

So if you can't buy your way into having great software and logistics, what can you do? Our answer: getting top-quality software really means getting top-quality project management. It affects every part of an operation, from costs to timescale to the results you're going to get out of it.

Consider this case in point: Computer Weekly lists six reasons the NHS National Programme for IT failed, namely motives, buy-in, excessive haste, poor contracting, multisourcing and accountability. How many of those reasons are actually technology-related? None of them.

They don't represent issues with the underlying technology, they represent issues with project management, and whether you're building a freight logistics business or IT infrastructure for the National Health Service, solid project management is essential. Fortunately for our clients, it's one of the areas we have a huge amount of experience in.