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Preparing IT for a New Product Launch
Royce D. Burnett, Mark Friedman, and Andre Prince

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n Tuesday, product launch are a
Website crashes during an online product launch
September 13, frequent occurrence. are a frequent occurrence—but the fallout can be
2011, Target’s
These types tremendous and widespread. The authors of this of events are not website crashed several times throughuncommon. For article show you how to identify IT risks for comout the day in the instance, during panies launching online products—and a strategy midst of their highly
Apple’s iPhone 4S to reduce those risks. anticipated “Missoni and Disney’s “Prin© 2012 Wiley Periodicals, Inc. for Target” colleccess Doll” product tion product launch. launches, customer
Shortly after the 6:00 traffic crashed the
a.m. product launch, online websites and disrupted the sale the storm that will brew. Using customers were greeted by of thousands of products. These
Target as an example, the ensuTarget’s mascot bulldog and an
“ongoing website failures and ing results relative to customer alarming message: “We are sud- impact were tremendous, espeperformance problems are costdenly extremely popular. You ing companies lost revenues and cially when one considers the may not be able to access our damaged reputation. . . . When errors that occurred during this site momentarily due to unusua website goes down, an online
“blackout” time. For instance, ally high traffic. Please stay business has effectively shut those customers who were able here and we’ll try to get you in its doors and is left wonderto place orders during the short as soon as we can!”1 When a blip when the website was work- ing will that visitor ever come back.”3 Thus, while every website crash occurs, the fallout ing were universally affected. is tremendous and widespread. online retailer dreams its new
For example, one customer
First, resources are instantly product will generate as much ordered about $300 worth of rerouted, which could result in website traffic and as many merchandise and received an operating inefficiencies. Second, e-mail with the expected ship sales transactions as possible communication lines become the day it launches, this just dates. However, the next day overloaded and telephone and/ may not be the case. Questions she was informed that three of or data lines freeze. The result: you may want to ask yourself the items she had ordered were information transfers come to as you embark upon such a not available for the estimated a standstill. Finally, and probship date and that she would not launch is whether your website ably most important, customers is actually ready to process the be charged until they were on are disappointed and countless increased volume of transacthe way, yet, she was already sales opportunities are lost. tions and if you can assure cuscharged for the entire order.2
For retail and service-oriented tomers of confirmed shipment
Firms may believe this is an companies, the loss of the IT dates and product availability. isolated event, but in actuality services is only the beginning of website crashes during an online If not, your product launch
© 2012 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI 10.1002/jcaf.21780

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The Journal of Corporate Accounting & Finance / July/August 2012

dream will quickly become your worst nightmare! Companies like Target, Apple, and Disney spent millions of dollars to create a “buzz” around upcoming product launches; however, the information technology (IT) and back-office systems needed to support the heightened demands were underserved. A successful product launch not only requires the creation of a strong market buzz, but perhaps overlooked is the required investment to prepare IT and back-office systems. This calls for a systematic, coordinated, and integrated approach. The purpose of this article is to provide a methodology to identify IT risks faced