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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.

"Based on the initial bid responses from the replacement vendors, the direct, out-of-pocket cost to complete the BTI project will ... exceed Oracle's bid by at least $10,000,00 and as much as $20,000,000," it states.

Oracle also intends to sue the school for another $5.3 million, it adds.

Montclair is seeking a judgment against Oracle for breach of contract, gross professional negligence and other claims, along with compensatory damages.

ERP projects have been compared to a three-legged chair or stool, with the software vendor, implementation partner and customer all needing to play key roles in a project's success.

For example, vendors should provide software that either fits or can be adapted easily to the customers' needs, while systems integrators should ensure that realistic project timelines are set and met.

In turn, customers must provide adequate leadership as well as budget enough time and money for "change management" activities -- the training and other tasks needed to move users over to a new system.

The Montclair situation is far from the only time an ERP project ended up in court, with SAP, Ross Systems and other vendors also facing litigation in recent times.

It was not immediately clear how Oracle will characterize Montclair's role in the project. As of Monday, the company had not filed a response to the suit.


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