BIG Corp.

and C-Consulting
The Never-Ending Story

SUMMARY: This case describes an international software development project in Indonesia

with the involvement of an Indonesian owned once European company C-Consulting carrying
out a software project for the fifth largest financial leasing corporation in Indonesia, BIG Corp.*,
worth about $ US100 million.
BIG Corp
As a typical Indonesian company, BIG Corp. had an organizational culture where a lot of
importance was attached to personal relations. These personal relationships were considered
more important and relevant than processes and procedures of any kind. BIG Corp’s
information systems were based on software not fully catering to all the needs of this fast-
growing company. Therefore, the company was now looking for a new Information Technology
(IT) solution. C-Consulting would get the contract for this project.
C-Consulting
C-Consulting was a spin-off of an IBM subsidiary in Belgium, with offices in Singapore,
Indonesia, and Australia. Early in 2007, C-Consulting was acquired by an Indonesian consulting
company with strong international connections. At its peak in 1998/1999, C-Consulting along
with its Singapore-based parent company had a consolidated book accounting turnover of
about $US 60 million with one hundred employees.
C-Consulting was headed by two executives, an Australian (with an in-depth programming
background) and a Belgian national, (with an IBM consulting background). Both executives were
fully trained in standard project (PMI) management methodology. They were used to managing
projects according to strict milestones and tight schedules with clear procedures to sign off the
deliverables on the contractor and customer side. Despite their knowledge, they were not
consistent in the implementation of the project management tools and techniques.
In order to obtain suitable customized software for his company, the CEO of BIG Corp. called an
old friend whom he trusted fully, another Indonesian national who owned the Indonesian
consulting company that bought C-Consulting. Both men negotiated the following agreement:
BIG Corp. would pay C-Consulting $US 100,000 for the development of web-based leasing
software which would integrate all functionalities, from sales to lease insurance and accounting
reports. That quoted price came after tough negotiations by BIG Corp and the final price was
significantly lower when compared to the closest competitor of C-Consulting.

1|Page
This web-based lease software would be developed in a web-language with the possibility to
migrate to a more advanced version at a later stage. It also had the advantage of allowing
managers to access the software regardless of their physical location.
This type of software would create crucial advantages for BIG Corp. AS a result, both parties
intended to start a long-term collaboration for the mutual benefit of both companies. BIG
Corp. CEO and C-Consulting funder agreed on the price without bothering too much about
detailed specifications. As mentioned previously, the contract price was way below any
Indonesian competitor offer, let alone an international software supplier which would have
charged roughly ten times as much as C-Consulting. The agreement was based on a kind of
‘partnership’ with the aim of continuing to supply other leasing companies in Indonesia after
the successful implementation of the system at BIG Corp.
When the price was determined, the specifications of the financial lease software were more
vague and not precise. Somehow, the high-level specifications were considered sufficient at
that stage because of the long-term relationship between the senior managers of both
companies. The need for further detailing of the specifications to customize the software to BIG
Corp’s requirements was not seen, since no bad intentions (or ulterior motives) by either party
was assumed.
Such a ‘loose’ contract implied that the dates were ‘guidelines’ only and that the deliverables
were referring to generic modules without any specific features of the modules which needed
to be signed off. It was presumed that an attachment with the detailed specifications would
follow at a later stage when work was in progress.
Of course, the fact that precise specifications did not exist and were never signed off meant
that there was no legal reference or basis to refer to.
Nobody, however, made the effort to create and sign off detailed specifications. In the course
of modelling the business processes, the client, BIG Corp, unilaterally decided at least three (3)
times to request significant changes to the software concerning the information workflow.
Those changes seriously affected the information flows and the interdependencies between
different modules. In addition, the changes caused a lot of work which had already been done
up until that stage redundant and useless.
Due to the fact that the changes were not documented, it was as if the requests had never
taken place, resulting in a largely modified scope.
The project specifications became broader and broader while no real additional substantial fees
were granted since the spirit of the contract was that both parties were making an investment.
But BIG Corp. conceded by allowing a later delivery deadline, but which was then postponed a
couple of times.
During the first seven months the work process proceeded more or less according to the initial
schedule, or so it seemed, and no real conflicts appeared on the surface. Reports about the
2|Page
work in process were usually delivered orally. Some written progress reports turned out to
reflect more the expectations of top management rather than flagging actual delays.
Over time, those reports became increasingly defensive in tone from both parties since the
respective Indonesian project managers on either side did not want to admit to any wrongdoing
and did not want to ‘lose face’. The lack of open clear reporting against pre-defined milestones
was initially compensated for by the two CEOs (Big Corp and C-Consulting) whose good
relationship guaranteed the smoothness of the overall process.
Also, while the Indonesian project managers for both C-Consulting and BIG Corp. were well
trained and experienced, they were not used to such big change management processes and
ignored the requests of the international CEO of C-Consulting to implement some tough formal
procedures regarding time performance and progress. The Indonesian project manager of BIG
did not rely on formal sign offs, instead using only written statements of specifications without
signatures. A formal sign off could have been misinterpreted as distrust which was seen as
counter-productive in a business relationship.
Instead, the project managers of both parties relied on ad hoc management if issues occurred.
They did not ask probing (investigative) questions of their team members, and received only
vague, insufficiently detailed feedback about the project status.
When the Australian programmers of C-Consulting who were responsible for the quality
assurance of the software started to complain about the numerous change requests by the
Indonesian client BIG Corp. that were accepted by the Indonesian project manager and the
Indonesian team, resulting in so-called ‘spaghetti programming’ (see the note below at the end
of the case), it became obvious that the project was facing real time versus deliverables issues.
After the CEOs of both companies had found out that the progress reports were mere cover ups
rather than a reflection of the project reality, the CEO of C-Consulting decided to hire a new
project manager to bring the project back on track. The new project manager was a trained civil
engineer from a top Indonesian university with an international MBA degree from an Australian
university. By the time the new project manager was about to take full control, the project was
significantly behind schedule. The change requests had led to delays of 22 months in total. In
fact, one could argue that the whole program plan to be finalized within 9 to 12 months (based
on limited specifications from C-Consulting's perspective) was dragged up to almost 2.5 years as
a result of those changes and add-ons.
At that stage, the Anglo-European executives of C-Consulting tried to install strict procedures
and processes in order to rescue the project. The Australian partner of C-Consulting even got
involved operationally with the completion of the software, overruling some of the decisions
previously made by the respective Indonesian program managers of BIG Corp. and C-
Consulting.

3|Page
The Indonesian project managers interpreted these steps as a sign of distrust and as a way to
avoid taking real responsibility for the project. In another effort to rescue the project, one of
the lead programmers was removed, not for incompetence, but because of a lack of
commitment. Since this programmer’s bonus was linked to the successful completion of new
projects there was no interest in completing this old lingering project, despite an agreed time
schedule.
In the meantime, C-Consulting was acquired by a local business consulting company which
partially blamed the management of C-Consulting for not having taken appropriate early
measures to rectify the project. Ultimately, the project was outsourced to a third party in
Indonesia to cut further losses.
Source: Original case written by Peter Verhezen (2007). (See Koster, 2010)

Question: Using the Culture Gap Analysis Tool, specifically where do you see the impacts of
national cultures occurring in the case scenario? (Justify your responses!)
(Guide: 1000 words maximum)

Note: Spaghetti programming is a term used by programmers when many ad hoc changes are
added without taking into account the possible negative side effects these may have on
predetermined well-structured architectural design which accounts for the speed of the
software.

4|Page