Oracle sued for $4.5m after ERP system delivery date 'moved from 2015 to 2016, then 2017, then... er, never'

Software giant Oracle was sued on Wednesday by Worth & Company, a Pennsylvania-based mechanical contractor, over a failed enterprise resource planning (ERP) software deal. The lawsuit, filed in a US federal district court in San Francisco, California, alleges Oracle breached its contractual obligations and fraudulently …

[elDog]

I'm really sorry for the customer. But they should have known that Oracle

is known to sell bills-of-goods. Non-rendered goods. Not that this is unique to Larry Leisure Suit's company but this behaviour has been known in the past.

So now Oracle will claw-back every dime it ever spent on the sales/technical support people on this project. It will stiff any contractors. It will deny responsibility. And it will sally forth to do this again.

(Reminds me of some 3rd world wanna-be potentate deals with his contracts.)

[a_yank_lurker]

Re: I'm really sorry for the customer. But they should have known that Oracle

Looking Worth & Company's website, they are mid-sized mechanical contractor who probably needed a lightly adapted, off the shelf system. A system that should be fairly straight forward if you know what you are doing. How good was their due diligence, I do not know but they probably are not aware of Larry's reputation within the IT field. So they were probably vulnerable to some shady tactics to land the contract.

[Anonymous Coward]

Re: I'm really sorry for the customer. But they should have known that Oracle

Oracle gets a bad rap but, really, I would say they are better than the other two major enterprise software companies - SAP and Microsoft. SAP has a worse implementation track record than Oracle and draconian licensing restrictions (see Diagio getting hit with a nine figure audit bill for external customers accessing their SAP generated order data through a non-SAP external portal). Microsoft just charges companies $5, $10, $30 million per year for a desktop OS and spreadsheets, basic software. Everyone just accepts that they have to pay the MSFT tax because they have had to pay the MSFT tax.

[FozzyBear]

NEW ERP implementation

Signed the dotted line in February 2015 and expected go live in the same year.

Yeah I call bullshit right there. I'm not sure if the customer pushed for that date or if the Consultancy firm suggested it. Either way that timeline should have been a big red flag to the other side .

[BebopWeBop]

Re: NEW ERP implementation

If that was what was agreed then surely it is binding - subject to renegotiation. We don't know the scope and complexity. Calling it bullshit seems somewhat premature unless you know more than you seem to.....

[Velv]

Re: NEW ERP implementation

I don’t know how “off the shelf” Oracles product is, but I’ve seen it done with other products where it was deployed “off the shelf” with no bespoke development work.

I’ve also seen worse failures where the development continued to bleed for 10 years before someone pulled the plug. The business survived on the pragmatism of the long serving emloyees who new the business and didn’t need the ERP to keep it turning over, but beencounters and marketeers kept tweaking the requirements.

[Anonymous Coward]

Re: NEW ERP implementation

How "off the shelf" is Oracle E-Business suite and associated services? Not. At. All. It's basically an empty vessel that needs to be painstakingly, carefully, constructed from the ground up. One year for an implementation that handles even a tiny number of business processes is a fantasy, like those gravity-free zones that a lot of top executives seem to believe in.

As for utilizing veteran employees to save the company from ERP-hell, that's only an option if the ERP plan didn't include an aggressive reorganization around outsourced/offshored services (a typical part of many ERP initiatives) that pushed those employees into early retirement or fleeing to more stable pastures. One of the benefits of that for remaining management is that there's no one left to point out how far off the mark they've landed the company.

[Anonymous Coward]

Re: NEW ERP implementation

Not necessarily. One of the better run ERP sites (1500 employees) I worked at had a 6 months start to actual go live on HR and Finance. PeopleSoft implementation, crewed by a largely Oracle team of about 10 very experienced PeopleSoft _functional_ consultants. _One_ whiz-bang dev only. Strict limitation of scope and firm guidance to configure, not customize. PM (also PS veteran) was good at holding the line and saying no to users when appropriate. C-level backing to just get it done and not faff around. Small set of pretty smart business end users, the rest were consulted but were not decision-making.

Trouble with large teams and long time ERP projects is that they often expand scope by trying to do too much and then want to redefine usage of their chosen product. Short times, budgets and small teams can force you to focus IF the underlying product is fit for purpose* (e-Business suite might not be) AND you have very good leadership.

The operative word above is can. Failure modes in ERP are complex and frequent. Small and short does not guarantee success and nor does large and deliberate. I would not generalize small means good and I think your opposite generalization is also off the mark.

* be very, very, cautious during the purchasing process.

[Headley_Grange]

Hmmmm

I'm no lover of Oracle but I have been involved in a few ERP projects (one of them SAP). They all followed the same three-act story arc:

Act 1. ERP vendor works with customer to understand the business and provide quote for bespoke ERP solution customized to fit their processes.

Act 2. Company sees quote, chokes, buys the vanilla off-the-shelf ERP system.

Act 3. Company spends next 2 years frigging its internal processes to fit the new ERP until the hero emerges; his name is Excel.

I suspect there's more to this story than meets the eye.

[GlenP]

Re: Hmmmm

Or (and this genuinely happened with a sister company of a former employer)

Act 1: ERP vendor* works with customer to understand the business and provide quote for bespoke ERP solution customized to fit their processes.

Act 2: Customer accepts solution and beats vendor down to a minimum possible price.

Act 3: Costs spiral.

Act 4: Customer outsources continuing implementation to India.

Act 5: Several million pounds later system is just about adequate.

Act 6: Don't know, I'd long left the employer.

Agree that it's probably not as simple as the story presents.

*SAP for the record

[Anonymous Coward]

Re: Hmmmm

Or Even.

Act 1: ERP vendor works with customer to understand the business and provide quote for bespoke ERP solution customized to fit their processes.

Act 2: ERP vendor can't actually deliver most of what the sales guy promised. Promises to get it to where it should've been cost a ton. Everyone in the company and supplier side is pi**ed off with the whole project.

Act 3: The next 10 years are spent getting it to a functioning system, mainly by changing your business to mould to the nuances of the product

Act 4: Every declares the system pretty poor and just about functional but very dated

Act 5: The search for a new system starts and you head on back to Act 1.

[Anonymous Coward]

Re: Hmmmm

Or Even.

Act 1: ERP vendor works with customer to understand the business and provide quote for bespoke ERP solution customized to fit their processes. Customer embraces change with open cheque books.

Act 2: ERP vendor delivers a system that largely fits the customers requirements with a few cost overruns. Project is considered "mostly successful". Note that the value of success will vary largely between customers.

Act 3: The next 10 years of business change/acquisitions results in a system that is barely fit for purpose. Company is unwilling to invest in further customization as vendor has announced a new release which will require re-implementation from scratch. ERP system patching/maintenance upgrades considered optional.

Act 4: ERP system struggles to support business due to pretty much every change conceivable. Attempts at implementing required patches are largely unsuccessful creating a sufficient work for a consulting firm to move to larger offices in a prominent part of an expensive city. While outsourcing the consulting work was considered, Hell withdrew from the tendering process on ethical grounds.

Act 5: ERP vendor encourages customer to move to new system. Customer firmly refuses to budge.

Act 6: Company employees a reassuringly expensive consulting company to scope requirements for replacement systems. Open warfare breaks out between those using the system that like it and those using the system who find it unfit for purpose. There is uncertainty over the difference between "long term sick leave" and "Susan was struck with a chair for suggesting a change to the order entry system",

Act 7: Company investigates alternative systems, but reject them. Goto Act 4.

[a_yank_lurker]

Re: Hmmmm

Or

Act 1 - Vendor works with customer/victim to understand what the needs are.

Act 2 - Vendor realizes the victim needs a vanilla system which has low cost and profit.

Act 3 - Vendor proposes a 'custom' system to jack up the price and profit.

Act 4 - Vendor tries to stretch out the project to squeeze more money of the victim.

Act 5 - Victim finally sues vendor for breach of contract.

[Chairman of the Bored]

Re: Hmmmm

@Headley_Grange- dear God, man, you just about owe me a new keyboard. Excel and LibreOffice's Calc have been the salvation of several of my employers ater getting victimized by either SAP and Oracle. One bounced straight from SAP .to. Oracle.- that was a clusterf$ck squared

[Anonymous Coward]

Re: Hmmmm

True, these ERP systems are successfully implemented at literally thousands of firms. It does work. If there is an issue, it is generally unrealistic customer expectations... which are set by the consulting firm, not the software provider. Usually it is a case of the consulting firm, in competition with several other firms for the project, making claims about how their industry 'accelerators' will get it up and running in six months. They sue Oracle, or SAP, because they have the deep pockets... and usually lose as Oracle delivered the software as promised. The consultancy did not deliver as promised.

[Nonymous Crowd Nerd]

Re: Hmmmm

Excel is always the elephant in the room - sometimes ok, always "quick and dirty."

We genuinely had a client - maybe a forty strong company - which more or less crashed and burned as a consequence of a single fateful Excel sort.

And this, of course, is the cautionary tale that the next client always thinks you've made up to frighten them into doing things the hard way.

[Tim99]

Re: Hmmmm

1. Spreadsheet jockey thinks that they drive business with Excel reports.

2. Jockey thinks that Excel "databases" are all they need to run business.

3. Consultant tells business that they need a basic SQL database to store data.

4. Jockey gets business managers/owners to ignore consultant's report.

5. Crap happens.

6. Smarter consultant suggests use of "Server" (consultant's favourite SQL system).

7. New consultant gets jockey on-side by showing them how to get data into Excel.

[Headley_Grange]

Re: Hmmmm

@Tim99 -Excel works OK, usually because it can be run and modified by someone on-site to make it deliver stuff (analysis, reports, pretty formats) that the high-paid-help want but forgot to spec. when ERP was put in. The risk to the company is that the Excel file becomes a macro-tastic mini-ERP itself, running a cycle behind real-time, with the added benefits of no documentation and only one person in the company who knows how it works - and the only copy sits on the local drive of his PC.

[Mark 85]

Another day, another lawsuit against Oracle.

Nothing new to see here of late. Same story, different day, different litigant.

[Mpeler]

FWIW

So, it looks like 'Orrible is pretty much Worth-less...

(And that's one of the worth puns I've ever seen).....

[Martin Summers]

It's Oracle. What were they expecting. A quick Google should tell you what you need to know. They don't deserve customers, they couldn't give a shit once you've handed over your money. A lot of companies are like this but Oracle are in a special category of their own. I have to support their products and seriously considering my career choices as a result.

[Secta_Protecta]

If your job involves fixing feckups involving Oracle products then I'd say your career choice is bang on, there will always* be work for you! :)

*As long as Oracle products exist.

[Martin Summers]

Well that's one way of looking at it I suppose. Not sure how long the wall or my head can go on for without caving though.

[Vulture of Silence]

Best they can hope for is their money back... 800k

I really do find it strange how the poor guys at Worth, think they can win this (I am a long time purchaser, seller and implementer of ERP solutions both client side and selling side)...

1. Spending a year to evaluate the market just stinks of laziness and confusion at best

2. Oracle do have lots of customers using the solution in similar industries and many of them are happy with the functional coverage

3. Worth paid EDREi for implementation services - configuration, data conversion and testing of the Worth processes in the Oracle solution - Not sure how contractually EDREi and Oracle are linked - but most likely they are not.

4. Data would have always been Worth's responsibility - crap in crap out

5. Seems like a lack of governance and process gave Worth a sense of comfort - If this was so important they should have had bi-weekly steering committees to track progress and escalate

6. Doesn't look like many of the business users were on board with the changes coming - Though I'm sure they all feel they worked hard, probably none were truly bought in - Did Worth really put their best people on this ?

7. Worth paid around 800k to Oracle - I think they will be lucky to get that back - Most get offered deals on buying more of something else...

8. EDRi are now conveniently out of business - So they can't get any money back from their implementor

9. The internal people that Worth assigned to the project should be reprimanded or never put on a project again

It astounds me that the owner of a multi million dollar business is paying good money to lawyers to try and keep face - It very rarely ends well and just is a bad hangover for a long long time...

I also really don't like Oracle or their practices - but if you want the benefits of the technology and a long term solution, who else can you trust ? SAP, Microsoft, IBM ?

Worth first and foremost really should have taken the project seriously and done a proper job...

Oracle, EDREi Monument are all cowards, who just wouldn't step up to the job...

[Milton]

Consequences

But surely, if Oracle were sued every time its sales and marketing lizards made untruthful claims for its products' performance and/or made a monumentally expensive and incompetent mess of a project, then it would by now be a mistrusted dinosaur of a company, with a terrible reputation, on a trajectory to slow death and irrelevance?

[Anonymous Coward]

SOP

This is just what Oracle does. Why *anyone* would voluntarily do business with them is a mystery.

[John Geek]

my experience, as a former employee of a company that used Oracle ERP, do NOT try and customize Oracle to match your old business practices, restructure your business practices to work according to Oracle's default model, and you'll be much happier.

[JMiles]

Question

I’ve read this about most big ERP systems but couldnt work out hlw customers would want to bend the rather flexible software.

Could you give an example you’ve experienced?

[John Geek]

Re: Question

used to be a MANMAN system.

first version of Oracle, we extensively customized it to match our existing business processes, took a couple years., finally went live, was quite clunky.

we skipped a major release and when we went to the next release, we redesigned our processes to follow the default model of Oracle, and were live in 6 months. sure, some people in purchasing, AR, AP, etc had to be retrained to the new workflow but that wasn't that hard.

[Amos1]

A former employer did SAP right

Old, large diversified manufacturer with disparate lines of business from acquisitions and no ERP system. Nine financial systems, fifteen phone systems, etc.

Decided early on to modify company processes to match SAP regardless of the pain to avoid, at all costs, any software customization. It took two years to do that part, before the SAP implementation could actually start. Several older people left the company because of it. The 43-year-seniority Fixed Assets manager sat through the discussions and presentations on his area and then said "That looks great but I need all of the screens to look like this" and handed out printscreens of the current AS/400 green screen. Company regrouped and assigned three people to learn the fixed assets business and realized what a horrible mess it was (we were paying personal property taxes on equipment that had been disposed of years earlier kind of thing). Old manager was thanked for his years of service and got retired. Other stories were similar.

One major customer heard of the SAP project and summoned the division president to their headquarters. Customer read him the riot act about how how their business had been seriously damaged by other suppliers switching to SAP. Customer demanded three months of materials on site prior to the SAP cutover date, to be billed on usage (consignment). Our president readily agreed. Customer was very happy that we had agreed so easily and asked what the cutover date was. Our president replied "Three weeks ago." And it was.

It's all about whether a company says they want change or whether they really do want to change. Too often it's the former. We've all seen numerous examples of that behavior too often.

[Stuchop]

Oracle No Better or Worse Than Other Vendors

In my experience Oracle are no better or worse than other vendors. This story throws up so many additional questions about the approach to the Program, the structure of the Program and how it was delivered which highlights the importance of selecting a competent partner or Si that can deliver a program of work. I have been on many successful large ERP delivery programs but also have experience of challenging programs - for a variety of reasons :

Who was original vendor - Oracle direct or via an Si or Partner? If via a Partner or Si then surely there is a responsibility on them to deliver the project rather than Oracle who provide the software?

Who manged the project - Oracle,Client or Si? Who was responsible for scope and change management? What was view on customisation - should be looking for as vanilla as possible.

Data migration, testing - client responsible and unable to deliver? Again what was scope of these element?

On face value I would also query the choice of solution EBS and Cloud for a mid-sized mechanical contractor would be more suited to Oracle JD Edwards ERP.

[Britt Johnston]

a gorilla is not better than an elephant, but different - and both are expensive pets

Oracle business modules are more flexible than SAP, which leads to more ways to link the modules together, mostly inappropriate I I have twice seen a sales rep whip up a credible critical module in a few weeks,to get the contract, leaving a different company to do a cheaper development

The SAP modules are already linked together, and SAP recommends the company learn to model the business to the application, As mentioned above, with optimism and Excel, this is possible after a few years and expensive updates.