Abstract

In August 2003, while many Europeans were heading to the beaches to mitigate the effects of the worst heat wave on record, José Eduardo Sampaio, the CEO of Casa XXI, was faced with another kind of heat. Cartão 21, the innovative payment system of Casa XXI that he had personally conceived and subcontracted, had dramatically failed on August 6th during the high-visibility inauguration of Alvalade XXI, the newly built football stadium of the Sporting Club of Portugal. Casa XXI had been granted the rights to exploit all the bars and restaurants in the stadium. Based on pre-paid cards, the new payment system was supposed to make bar operations more efficient by eliminating the use of cash. In addition, the system was supposed to give Casa XXI an image of innovation and modernity enhanced also by all the free publicity it received in recent newspapers articles covering the inauguration. The failure of the system represented not only a significant financial loss for Casa XXI but also an embarrassment for the Sporting Football Club as well as a major blow to the reputation of Casa XXI and to the credibility of José Eduardo, himself a former football player. José Eduardo was quick to point the finger at Meag, the company with whom he had contracted to design and implement the system. But José Almeida, Meag’s manager, claimed that the system worked fine. In his opinion, the nature of the problem was organizational. He believed the mishap had to with the late activation and distribution of the cards, as well as the lack of training of the bar staff; and these were responsibilities of Casa XXI, not his. But it was difficult to know what went wrong and whom to blame. In reality, the system had never been fully deployed and tested before the event. The construction of the stadium had been completed just a few days before the inauguration, and neither Casa XXI nor Meag had prior access to the stadium. Thus, nobody knew whether the installed configuration actually worked. With such uncertainty and the next match just days away, José Eduardo demanded a comprehensive system test. By the end of August, Meag conducted such a test in the presence of Casa XXI’s management team. The results were discouraging: the system failed to operate properly. Casa XXI lost faith in both the system and the supplier.

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