Software failures $10 million to $100 million
MillerCoors and ERP implementation vendor sue each other over failed ERP project
In a contract initially worth $53 million, MillerCoors hired HCL America for an SAP project to integrate processes across the organization. The expectation was to save $550 million in costs by consolidating the MillerCoors’ and Molson Coors' supply chains.
The implementation project did not go well, with MillerCoors eventually suing HCL for $100 million claiming that the contractor missed project deadlines, delivered buggy code and used junior consultants with inadequate skills. Then HCL filed a counterclaim disputing the brewer’s allegations that they owned responsibility for the troubled ERP project. MillerCoors is accused of being unable to communicate requirements and of shielding its own leadership from blame for failure by making HCL a scapegoat for project problems. The case is ongoing.
Finish Line's Supply Chain disaster cost CEO his job and $32 million in lost sales
Finish Line CEO Glenn Lyon stated in the Q3, 2016 earnings report that performance was severely impacted by a disruption in the supply chain following the implementation of a new warehouse and order management system. Finish Line had trouble filling on-line orders and replenishing stores that cost it $32 million in lost sales, or about 8% of the company's revenue, and this caused an 11% drop in their stock price. CEO Lyon announced his departure simultaneously with the Q3 earnings release.
Finish Line had underestimated the challenge of the project, and especially the level of change management in moving from the old system to the new. There was not nearly enough training for associates and supervisors on the floor to help when ramping up the new system, and too much trust was placed in the software vendor and the implementation consultants.
Oracle sued by university for alleged ERP failure
Montclair State University is suing Oracle over an allegedly botched ERP software project, saying a series of missteps and delays could ultimately cost the school some $20 million more than originally planned, according to a complaint filed last week in U.S. District Court for the District of New Jersey.
Oracle "failed to deliver key implementation services, caused critical deadlines to be missed, refused to make available computer resources that it had promised, failed to deliver properly tested software, and overall, failed to properly manage the project," the complaint alleges. In the end, Montclair suspended the project, fired Oracle and began looking for a replacement systems integrator, it adds. Due to the problems, the school's costs will increase by greater than $10 million, according to the complaint, which goes on to describe Oracle's alleged failings in detail.
Burned by $30 SAP million deal, Marin supervisors seek new software contract
Mindful of "lessons learned" during the county's $30 million computer collapse, Marin officials will negotiate a new software systems contract with Tyler Technologies, the largest company in the nation focused solely on public sector software and services.
In a brief but carefully orchestrated presentation by a phalanx of top officials, the county administration recommended that top brass "enter into a contract and statement of work negotiations" with Tyler, a company that entered the local government software market in 1998 and has offices in 18 states across the nation, although not in California.
SAP ERP Woes Blamed for Lumber Liquidator's Bad Quarter
Lumber Liquidators is attributing a weak third quarter to a complex SAP implementation, saying the project imposed a significant drain on worker productivity. But the problems appear to be largely related to employees having trouble acclimating to the new system, versus malfunctions in the software itself.
The discount flooring chain "implemented the most significant phase" of its SAP project which included a new point-of-sale system along with warehouse management and inventory modules. While business continued without interruption during the project, and net sales rose US$6.7 million to $147.2 million, lower productivity led to an estimated $12 million and $14 million in unrealized net sales, according to the company. Net income fell nearly 45 percent to $4.3 million.
Avantor Performance Materials sues IBM over SAP project 'disaster'
IBM has been slapped with a multimillion-dollar lawsuit by chemical products manufacturer Avantor Performance Materials, which alleges that IBM lied about the suitability of an SAP-based software package it sells in order to win Avantor's business.
Fully aware that, given the competitive pressures of Avantor's industry, and the specialized demands of its customers, Avantor could not tolerate any disruptions in customer service, IBM represented that IBM's 'Express Life Sciences Solution' was uniquely suited to Avantor's business," the lawsuit states. "The Express Solution is a proprietary IBM pre-packaged software solution that runs on an SAP platform." But, after signing, Avantor discovered that Express Life was "woefully unsuited" to its business and the implementation brought its operations to "a near standstill," according to the suit.
Avantor has suffered tens of millions of dollars in monetary damages, as well as taken a hit to its reputation among partners and customers, the suit states. "IBM, meanwhile, has already pocketed over $13 million in fees from Avantor for a systems implementation project it mismanaged and was unable to perform properly," the lawsuit states. "Incredibly, IBM is now seeking to profit from its misconduct by demanding millions of dollars in additional fees to redesign and rebuild the defective System it implemented."
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