Boeing Company’s recently announced six-month delay of its new 787 Dreamliner jet shows defects in both their EA insight and oversight.
The Wall Street Journal, 7 December 2007 reports that “layers of outsourcing slow 787 production…a look inside the project reveals that the mess stems from one its main selling points to investors—global outsourcing.”
How did global outsourcing reveal the breaks in both effective insight and oversight at Boeing?
- INSIGHT—EA is the synthesis of business and technology to improve organizational decision-making. EA develops information products, so that the organization has the information it needs to improve mission execution, and so that business is driving technology. In the case of Boeing, they were so focused on getting the technology of the new jet right, that they overlooked the underlying business problems. “It figured the chief risk lay in perfecting a process to build much of the plane from carbon-fiber plastic instead of aluminum. Boeing focused so hard on getting the science right that it didn’t grasp the significance of another big change; the 787 is the first jet in Boeing’s history designed largely by other companies,” and this has been plagued with problems ranging from language barriers to their contractors subcontracting out key tasks, such as engineering. Boeing’s focus on the technology led them to ignore important aspects of the business of designing and producing the new planes. Boeing did not have sufficient insight into the business side (versus the technology) of managing this tremendous endeavor.
- OVERSIGHT—EA involves IT governance, so that IT investments are made based on sound principles of business alignment, return on investment, risk management, and technical compliance. Generally, the Investment Review Board, the EA Board, and the Program Management Office sees to it that IT projects are reviewed and managed in terms of cost, schedule, and performance parameters. In the case of Boeing, they did not ensure adequate EA oversight for the 787 jet. “Boeing overestimated the ability of suppliers to handle tasks that its own designers and engineers know how to do almost intuitively after decades of building jets. Program managers thought they had adequate oversight of suppliers but learned later that the company was in the dark when it came to many under-the-radar details.” Boeing’s general expertise in project oversight was outsourced along with the engineering and production tasks, and this led to, what an executive of one major supplier has called, chaos.
The Boeing 787 Dreamliner may well end up being a true “dreamy” jet plane, but from a User-centric EA perspective, the 787 has been a real nightmare and a example of ineffective EA insight and oversight!