Ending a nightmare - Overstock's data center journey

Overstock.com CEO Patrick Byrne refuses to believe that technology doesn't matter. The outspoken CEO watched as his computer systems crumbled in 2005, resulting in a customer service nightmare. Then, he watched data warehousing specialist Teradata barge into his computing center and save the day.

Before Overstock.com's IT meltdown, the online retailer had enjoyed a run of success thanks to its bizarre ads where a babe talked about "the big O" and thanks to solid customer service. That flirtation with good fortune ended as Byrne pushed his team to install a new Oracle ERP (enterprise resource planning) system in record time. As many of you know, Oracle is not to be trifled with and demands months, if not years, of fine-tuning. Byrne learned this lesson too late.

"Some things were going through okay and a lot weren't," he told us during a recent interview. "It was just spraying orders. Sometimes customers might not get a ship confirm. Sometimes the order might not flow through the system. Sometimes the order got misrouted."

You can see a picture of the ERP system as drawn by Byrne here.

We've documented - at length - the customer service debacle that followed as a result of this Oracle ERP implosion. Never one to run from issues, Byrne cops to the crisis.

"It was really my fault," he said. "I had us wait too long to upgrade the IT system and then pushed too hard to get a new one rolled out."

It's rare to see a CEO be so upfront.

The Big 'Oh Crap'

During the worst part of the IT meltdown, Overstock began manually sifting through data collected by its Teradata systems. This helped the company sort out orders that had gone wrong.

"We were really catching everything we needed to catch with the Teradata system," Byrne said.

Going through all this information by hand was painful and less than optimal, but at least Overstock had that option.