You never want to be forced into a position where are you are contemplating suing your ERP vendor.  However, despite how many ERP vendors and ERP integrators provide implementation services, a surprising number of implementations are ultimately classified as failures. In extreme cases, these ERP implementation failures turn into ERP implementation lawsuits. The anatomy of an ERP implementation dispute almost always follows a predictable pattern. Below are three tips that can minimize the likelihood that you will end up in an ERP lawsuit:


  1. Have Reasonable Expectations: A new ERP system is not a silver bullet. Despite what an ERP salesperson might tell you, you should not expect an ERP vendor to provide you with out-of-the-box solutions tailored to your specific industry that will require little modification or customization. All ERP systems have functionality gaps. Even an ERP system designed for your specific industry will need to be modified or configured to meet your specific business requirements.


  1. Do Your Due Diligence: Use RFPs or RFIs to help you streamline the ERP vendor section process. Understand and document your business requirements and business processes. Verify that the ERP software incorporates your business requirements and business processes or that the ERP vendor has a plan to configure or modify the ERP software to address your needs. Make sure that you see any important functionality demonstrated in a live environment. Conduct site visits.


  1. Negotiate Contracts That Manage The Implementation Process: If an ERP implementation is going to fail, it usually fails because of poor project management – not because of a substantive issue with the software itself. To minimize this, you want to ensure that you negotiate implementation contracts that manage both your relationship with the ERP vendor and manage the implementation process. Consulting agreements should contain robust warranties that obligate the ERP vendor to utilize project management and implementation best practices. A process for remedying the breach of any warranties should be detailed and provide you with real relief. Statements of Work should include detailed deliverable requirements, deadlines and user acceptance criteria.  A mutually agreed upon process for extending deadlines and adding functionality should be included in your contracts and the ERP vendor should be obligated to provide estimates of the impact on the overall implementation budget.


High profile ERP failures provide many lessons on how to build a successful legal case against an ERP vendor. Ultimately, avoiding an ERP lawsuit altogether is preferable to being forced to sue your ERP vendor.