Implementation of ERP from Epicor ended with a failure

One of clients of Epicor filed a lawsuit against the company because of the ERP project during which implementation costs were five times higher than initially expected. The Whaley Foodservice Repairs company from the city of Lexington of the American State of South Carolina which is engaged in sales and installation of a kitchen equipment for the first time was engaged in purchase of ERP from Epicor in 2006, said in the statement of claim which was submitted last week to District court of the USA.

Further in it it is said that Whaley Foodservice Repairs looked for vendor which could provide it "the solution which is completely integrated, working in real time capable to support primary activity, including sales and service aspects".

By March, 2007 a system had to be brought into operation at the main office of the company and 12 divisions, but start was postponed several times, and a system never worked for further two years of operation properly, the document says.

At the same time it was initially supposed that expenses on implementation will make $190 thousand, but eventually they reached $1 million Whaley accuses Epicor of fraud, contract breach, violation of terms of trade and unpremeditated false representation. The company wants to return completely the money and plus to that to receive compensation for damage. The last similar claim to Epicor, we will remind, the private investment company Apax Partners gave, it concerned much more expensive contract in $976 million.

The contract between Whaley and Epicor was signed on October 16, 2006 after demonstration of software by vendor. Further in its implementation failures because of numerous shortcomings of software of Epicor began, the customer company claims. For example, a system could not provide control of movement of goods within 12-18 hours after they were already delivered to customers. A system also could not approve data from bases of sales, distribution and service support and also to support transactions of data in the necessary volumes.

At this Epicor, according to Whaley, tried to eliminate system defects, but it did not work well. A part of a system at the same time was developed by Evron Computer Systems system integrator to which Whaley paid for elimination of defects. Besides, in Whaley note that during the project from Epicor permanent staff rotation was observed.

In 2009 the parties signed the pact on the solution of a question extrajudicially, but it did not help establishment of a compromise between them. According to experts, the failure of the project can be explained with the different reasons.Ray Wang, the CEO of Constellation Research, says that almost always ERP projects go beyond the initial estimate, but in a case with Whaley the overexpenditure of means appeared above regulation.

If arguments of Whaley are reasonable, then, most likely, at the customer the correct understanding of functionality of a system was not initial, he considers. At the same time, Epicor, perhaps, had no enough detailed maps of workflows to bring a system into accord to them, the analyst added.