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Oracle sued by university for alleged ERP failure

Chris Kanaracus, IDG News Service | May 23, 2011
Montclair State University is suing Oracle over an allegedly botched ERP (enterprise resource planning) 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 also "unilaterally removed or downgraded" risks identified by university officials, the complaint states.

Meanwhile, staffers Oracle placed on the project were unprepared to pull off the implementation successfully, according to the complaint.

While Oracle required the school to use a number of proprietary methodologies, many workers assigned to the job were actually subcontractors who "had no knowledge of the [methodology], didn't understand it, and weren't trained to use it."

Moreover, Oracle "continually rotated staff in and out of the BTI project," causing confusion and wasted effort "as new Oracle staff wanted to do things their way."

Oracle "ignored" many complaints lodged by Montclair officials about the staffing changes, according to the complaint.

School and Oracle officials had a series of meetings between July and September 2010, during which the university repeatedly asked Oracle for a project plan with realistic completion timelines, it states.

On Sept. 27 of last year, Oracle asked the school for about $8 million more than the original $15.75 million fixed fee to complete the job, according to the complaint. In addition, Oracle blamed the school for the project's woes while accepting no responsibility for any problems, it adds.

Oracle then threatened to pull its staffers off the project on Oct. 28 if a new agreement wasn't reached, according to the complaint.

Montclair subsequently sent Oracle a letter on Oct. 11, saying the vendor was in breach of contract and demanding the problems be fixed with 30 days, it adds.

A number of Oracle personnel came to the school on Nov. 1 "to continue previously scheduled data mapping and work on HCM (i.e., business as usual), all of which was inappropriate given the project failures and breaches previously identified," the complaint states.

After conferring with an Oracle attorney, the workers handed their access keys to Montclair's CIO, "said 'here you go' and 'we're out of here," left campus and never returned, the complaint states.

The contract was terminated on Nov. 11, but tensions between the school and Oracle did not subside, according to the complaint.

Oracle allegedly refused to turn over a number of "deliverables" related to the project, which could have made it easier for another systems integrator to complete the job, unless the school agreed to pay for them.

Montclair ultimately paid Oracle about $370,000 for several deliverables, which turned out to be substandard and not reusable, the complaint states.

The school has paid Oracle more than $6 million in connection with the project, and much of that work will not be usable either, according to the complaint.


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