Legal claims against ERP vendors proceed
08.07.10, 17:15, Msk
Eskperta Panorama Consulting Group selected five main recommendations which will allow to avoid failures at implementation of ERP systems. And the research shows that there are no sample, typical ERP failures, each vendor can fail with an equal share of probability.
According to the president of Panorama Consulting Group Eric Kimberling in the blog, five basic reasons are the cornerstone of failure implementation projects of ERP systems. Some of such unsuccessful projects lead to an overexpenditure of budgetary funds, and in certain cases clients submit legal claims against software makers, and for the last 12 months the number of such addresses sharply increased.
According to Eric Kimberlinga, the opinion most often prevails that the majority of failure ERP projects and legal claims should belong to implementation of the systems of SAP. It is enough to remember loud trial with Waste Management company when SAP paid to the client compensation for an ERP project failure and also mnozhestvot other unsuccessful implementations of ERP systems of SAP.
However the research Panorama Consulting Group shows that there are no sample, typical ERP failures, each vendor can can fail with an equal share of probability. SAP and Oracle companies have the smaller level of legal claims as a percentage of the general customer base. However as most the large and noticeable companies use applications from Sap and Oracle, they become the center of attention more often if something goes not so.
For example, for the last 30 days two new claims were submitted: one against Oracle another against division of i2 Technologies of JDA Software company.
| The supplier of the solution ERP | year | the buyer of the solution ERP | Cause of action, connected with the solution ERP | The link to article |
|---|---|---|---|---|
| The system of Epicor company from the very beginning did not satisfy Epicor Software Corporation | 2009 | Ferazzoli Imports of New England to plans and promises. Initial payment: 184,443.61 US dollars. Today it is paid: 224,656.42 US dollars (including the cost of additional software and the services connected with completion and correction of a system). | Read article | |
| Infor Global Solutions | 2009 | Vaughan & Bushnell | Infor, one of the largest developers of ERP solutions, takes the legal measures concerning clients aimed at providing mandatory licensing fees. The lawyer of manufacturing company of tools against whom Infor filed a lawsuit in this case, claims that his client already paid to Infor some amounts. | Read article |
| Lawson Software | 2009 | Public Health Foundation Enterprises | The project on the implementing solution ERP was not performed | Read article |
| Lawson Software | 2009 | Sisters of Charity of Leavenworth Health System | Network of clinics submitted a claim on Lawson Software in connection with the ERP applications taken out of service (breach of agreement). The supplier agreement of the solution ERP means that Lawson – for a small fee – should provide two software modules for replacement existing which will be written off next year. | Read article |
| Infor Global Solutions | 2008 | Carver Pump Company | The company filed a lawsuit against Infor because of the dispute connected with the account for the amount of 451,000 US dollars which Infor sent to Carver in August, 2008 on a charge of illegal use of a packet of Maxim ERP since 2000. Carver claims that it obtained the perpetual license from CA company (which purchased developer company of the solution Maxim, NCA) in 1998 within updating of Y2K. Carver also claims that it ceased to use the solution Maxim in 2006. The companies settled a dispute extrajudicially in November. | Read article |
| Infor Global Solutions | 2006 | Scientific Components | Scientific Components submitted on Infor a claim to district court of New York because of a dispute on payments for the temporary licenses necessary for access to the solution MAPICS which works at the standby server of iSeries connected via the software of iTera with high availability. The companies settled a dispute in December, 2006 | Read article |
| Infor Global Solutions | 2006 | Western Textile Company | The company filed a lawsuit against Infor because Infor claimed that Western Textile Company owes it more than 100,000 US dollars for exceeding of the number of sessions stipulated in the license agreement. Western Textile claims that originally the licenses obtained from CA considered the number of simultaneous users, but not sessions. The dispute is settled in March, 2007 | Read article |
| PeopleSoft and Kaludis Consulting Group | 2004 | Cleveland State University | Inadequate deployment of ERP solutions of the company. In the claim submitted on PeopleSoft it is told about breach of agreement and negligent misrepresentation, in particular, the claimant claims that the solution PeopleSoft for management of statements of students is no more than "phantom software". | Read article |
| Baan USA Inc | 2003 | Dexter Axle Company | The Dexter company brought 12 charges: agreement breach about providing the software and agreement on rendering consulting services, two claims about violation of express warranties, violation of implied guarantees, coercion to conclusion of an agreement about providing the software and agreement on rendering consulting services, fraud, negligence, constructive fraud, violation of the law and unjust enrichment. | Read article |
| EDS | 2003 | British Sky Broadcasting | Sky claims that EDS forged information on the opportunities and resources with participation in the tender that led to non-compliance with project deadlines and a lost profit in the amount of 709 million pounds sterling. Sky requires compensation of the specified losses. | Read article |
| Oracle Corporation and KPMG Consulting | 2001 | university of Cambridge, Great Britain | Feasible legal measures concerning Oracle and KPMG Consulting in connection with fault of a computer system for which installation the university spent 13 mln. dollars of the USA are considered. To the project two companies were attracted. | Read article |
| SAP (R/3) and Andersen Consulting (at present – Accenture) | 2001 | FoxMeyer Corp. | The company states that inadequate implementing solution SAP R/3 in the mid-nineties led it to ruin. In 6 years the authorized representative to whom business management of the bankrupt was transferred and Accenture settled a dispute. The claim was withdrawn on August 8, 2002 | Read article |
| SAP | 2001 | State of Arkansas | National federation of blind people of the State of Arkansas filed a lawsuit against the government, having accused him that the AASIS system does not provide full access for people with the broken sight. The government, in turn, submitted a claim against SAP, having accused the company of the mentioned problems. The SAP company agreed to finish an ERP system in the State of Arkansas. | Read article |
| PeopleSoft and Deloitte & Touche | 2000 | Gore & Associates | The claimant claimed that the consultants of PeopleSoft involved in project implementation for Gore had no sufficient qualification therefore the company was forced to address on a hot line of PeopleSoft to fix serious problems which arose right after start of a system. | Read article |
| Oracle Corporation | 2000 | Tri Valley Growers | The defendant was accused of fraud, negligent misrepresentation, negligence and agreement breach. TVG accused one of the DBMS largest producers of breach of agreement on rendering services in upgrade of the production and managerial systems of the company using the ERP applications from Oracle. | Read article |
| J.D. Edwards and IBM of | 2000 | Evans Industries Inc. | In the claim it was told that the solution OneWorld "contains errors and does not correspond to promises of the defendant". The defendant did not fulfill and refused to fulfill the agreement obligations and also together with IBM did not provide the proper OneWorld installation. | Read article |
Eskperta Panorama Consulting Group selected five main recommendations which will allow to avoid troubles at ERP system implementation.
1. Be convinced of functional and technical compliance of the selected software.
2. Have a realistic idea of cost and duration of process of implementation.
3. Be convinced of quality of implementation and maintenance.
4. Where it is possible, avoid completions of functionality of the software, use standard functionality better.
5. Be convinced of sufficient competence of the project team in the field of ERP-implementation systems.
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