Failed Oracle ERP Project Leads to Legal Spat
Oracle and Montclair State University's legal conflict is a classic case of a relationship gone bad due to misaligned expectations, said Nour Group CEO David Nour. "You said you were going to do this, and you did something else -- with a gap between the outcome I experienced and what I expected from the onset. Now we have a problem."
A legal dispute between Oracle and erstwhile client Montclair State University illustrates that despite the steady evolution of ERP technology and implementation methodologies, these projects can still turn ugly.
The two have filed suits against each other over a failed project, called the "Bell Tower Initiative." Montclair has accused Oracle of violating the terms of its agreement to build a new Web portal for the school. It claims that Oracle's gross negligence resulted in project cost overruns of some US$20 million.
Oracle, for its part, says the New Jersey school still owes it for work done -- to the tune of $5.3 million. It has filed suit demanding payment and requesting that Montclair's charges be dismissed. Among other allegations Oracle has made is its claim that the school didn't have the tech savvy to fully understand the scope of the project or what its completion might entail.
Both Oracle and the university declined CRM Buyer's requests to comment on the matter.
A Trip Down Memory Lane
Such disputes were more common 10 years ago, when most firms saw ERP as the only choice for a wired, integrated operation; cloud computing was barely a concept then. Also, ERP software tended to be far more cumbersome and difficult to use than it is now.
Some things, though, haven't changed -- at least based on the Oracle-Montclair debacle -- and that is the risk of misaligned expectations on both sides.
Oracle and Montclair State University's legal conflict is a classic case of a relationship gone bad for that very reason, Nour Group CEO David Nour told CRM Buyer. "You said you were going to do this, and you did something else -- with a gap between the outcome I experienced and what I expected from the onset. Now we have a problem."
Misaligned Expectations, No Buy-in
This happens for several reasons, he said. One is that most large implementations are not scoped correctly. Also, most large implementations are technology-focused vs. business-outcome focused.
"Implementers can forget that the technology is an enabler of the business results," Nour pointed out.
Finally, most large implementations are launched with grand visions vs. a stair-step approach.
"They forget that success comes in incremental stages, and we should take smaller bites," said Nour.
Buy-in from the key stakeholders at the company is essential, Patrick Gray, president of the Prevoyance Group, told CRM Buyer. "Companies act as absentee landlords and let their implementation firm run the show, expecting them to show up with a working system some number of months later."
In these situations, he said, "something" gets produced by the implementation firm, but it will take three times as long -- and not meet the needs of the end-users.
A related problem is that a defined decision-making process is rarely put in place, continued Gray.
"For an ERP to finish on schedule, tough decisions on scope, processes and schedule must be made," he explained. "In many environments, making the wrong decision is punished so onerously, no one wants to make any decision. Implementation firms often don't help this process, since a long decision cycle adds billable hours."
The Short Route
If nothing else, the Oracle-Montclair legal dispute serves as a timely reminder of why more firms began gravitating to shorter, more discrete projects, J. Lance Reese, president of Silver Peak Consulting, told CRM Buyer.
"Larger implementations that take several years no longer make any sense for CIOs. By the time the applications go live, many of the features may not apply or no longer serve the needs of a rapidly changing business," he said.
As a result, more CIOs are avoiding large ERP implementations, said Reese, and pursuing best-in-class applications, systems comprised of multiple vendors, and products that can be integrated -- especially if the integrations are already built-in and supported.
"Integrations come with their own headaches," he acknowledged, "but are minuscule compared to the difficulties faced in implementing, supporting, upgrading, and ultimately trying to remove a massive ERP solution when it is too outdated."