One of the most common causes of action brought against a software vendor for a filed ERP implementation is a claim for breach of contract. If proven, a breach of contract claim allows the non-breaching party to be put into the position it would have been had the breach not occurred. Typically, this means that the non-breaching party can recover payments that the breaching party received from it under the contract. For an ERP implementation, this could include the software licensing and maintenance fees associated with the project as well as consulting fees associated with implementing the software.
In order to determine whether an ERP Customer has a viable breach of contract claim, a thorough analysis of all documentation related to the software and the performance of the ERP Vendor should be performed. This preliminary fact gathering stage includes a detailed analysis of, at minimum, the following categories of documents:
- Project Governance Documents: ERP Vendor contracts, ERP Vendor agreements and contracts, change orders, statements of work, project charters, go-live decision plans, payment milestone documents, requirements documents, and fee schedules;
- Project Management Documents: project plans, change request logs, executive committee minutes, deliverables and deliverable signoffs, and project dashboards;
- Documents For Design and Software Configurations: coding standards, design documents, and validation of requirements documents;
- Infrastructure and Network Documents: Hardware or software requirements documents, system or network upgrade documents, and configuration and environment management plans;
- Testing Documents: Testing plans or scenarios, bug fix documents, quality management plans, and parallel processing requirements documents;
- Additional Project Support Documents: Requirements management plans, schedule management plans, risk management plans, procurement management plans, project logs, cost management plans, and post go-live support plans.
While not exhaustive, the documents listed above are a starting point that will provide insight into whether the ERP Vendor breached the software licensing or software implementation contract. These documents will help narrow key issues related to the ERP Vendor’s breach of contract, such as: the failure to provide accurate estimates of costs; providing incompetent consultants; missing deadlines; and of course, providing nonconforming deliverables. For more information, please see the video below: