Over the past 16 years, we have been involved in hundreds of disputes involving failed ERP software implementations. While the specific facts are always different, the claims and allegations involving a failed ERP implementation are remarkably similar. If you are, or have been, involved in a problematic ERP software implementation, the claims, allegations and counter-allegations outlined below will sound familiar.
Misrepresented Experience And/Or Skill Set:
- Customer Allegations: (i) the ERP Software Vendor misrepresented its experience or skills in the customer’s industry or its experience or skills in implementing the particular software; (ii) the ERP vendor assigned inexperienced consultants who were using the customer’s implementation project as a training ground; (iii) the vendor’s consultants showed up late to work or failed to attend project meetings.
- ERP Software Vendor Response: (i) the customer’s project manager and decision makers were unavailable when needed; (ii) the customer experienced employee turnover; (iii) the customer’s resources assigned to the implementation project had a limited understanding of how the business was actually run; (iv) the customer’s resources lacked the power to make decisions; (v) the customer’s steering committee members were not fully invested in the conversion to a new software system.
Misrepresented Software Functionality, Capabilities Or Features:
- Customer Allegations: (i) the software does not work as represented; (ii) the software does not meet the customer’s business needs disclosed by the customer to the ERP Software Vendor during the sales cycle; (iii) significant functionality basic to the customer’s industry is missing; (iv) the software lacks basic functionality common to all software and included in the customer’s legacy system.
- ERP Software Vendor Response: (i) the software met the agreed upon acceptance testing criteria; (ii) the software performs as warranted because it substantially conforms to the documentation; (iii) the sales process was open and transparent; (iv) the customer was able to conduct reference checks and site visits; (v) the software and its functionality were demonstrated; (vi) the customer’s expectations are unreasonable.
The Software Is Unusable Post Go-live:
- Customer Allegations: The customer claims that after the software has gone live it cannot use the software because it is experiencing: (i) excessive overtime; (ii) the inability to ship product; (iii) ongoing loss of revenue; (iv) the inability to invoice customers; (v) loss of reputation and brand equity; (vi) loss of customers; or (vii) the inability to comply with federal or state regulations.
- ERP Software Vendor Response: (i) the customer failed to re-engineer its business processes; or (ii) the customer failed to implement organizational change so it could properly use the system.
Training In The ERP Software Was Inadequate:
- Customer Allegations: (i) the ERP Software Vendor’s consultants responsible for training were not knowledgeable; (ii) the application training environment was not suited to the customer’s industry or was broken; or (iii) the training did not utilize real data.
- ERP Software Vendor Response: (i) “super users,” “champions,” managers or employees failed to attend training; (ii) the training was conducted in addition to full user work schedules so the customer’s employees were not adequately focused on learning the new system; (iii) the customer failed to allocate adequate time and resources to the training.
The ERP Software Vender Underbid The Implementation And Failed To Follow Best Practices:
- Customer Allegations: (i) the ERP Software Vendor intentionally provided an unrealistic estimate of the cost of the implementation to secure the contract; (ii) the ERP Software Vendor failed to follow best practices for software implementation and/or project management without alerting the customer to the associated risks; (iii) the ERP Software Vendor cut corners and provided inaccurate status reports to conceal issues and meet deadlines; (iv) the ERP Software Vendor approved go-live without adequate testing; (v) the ERP Software Vendor never developed or followed a project plan; (vi) the ERP Software Vendor never conducted acceptance testing; or (vii) the ERP Software Vendor ignored defects and issues prior to go-live in favor of “fixing them later.”
- ERP Software Vendor Response: (i) the customer prevented the ERP Software Vendor from following best practices; (ii) the customer failed to delegate tasks; (ii) the customer unreasonably refused to push back deadlines; (iii) the customer prioritized cost savings over mitigating risks; or (iv) the customer took shortcuts on important tasks that were the customer’s responsibility, including data conversion.
The Customer Believes That The System Will Never Work:
- Customer Allegations: (i) the system cannot be saved; (ii) the system has too many errors and functionality gaps; or (iii) the system is now highly customized and too expensive to maintain.
- ERP Software Vendor Response: The ERP Software Vendor counters by asking for more time, more patience, and most importantly, more money.