Oracle, university settle over troubled ERP project

Oracle Corp. and Montclair State University have settled amicably on a headline-grabbing two-year-old lawsuit involving a trouble-plagued enterprise resource planning project the software maker undertook for the New Jersey-based school.

Back in 2011, Montclair sued Oracle because of mistakes and delays in the project which went $20 million over budget. The school alleged Oracle used unprepared personnel, missed deadlines and failed to conduct adequate software test in the assignment which used Oracles PeopleSoft ERP application.
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A countersuit by Oracle claimed that Montclair’s actions were all part of a “scorched earth” to gloss over its own shortcomings in the project.

However, last week, the two parties issued a statement saying they have resolved the dispute.

“Montclair State University and Oracle America Inc. are pleased to announce that they have amicably resolved their dispute,” their statement said. “Both entities are now looking toward the future of their relationship.”


The two parties did not disclose the terms of the settlement.

ERP projects are a common source of headaches for many organizations and vendors, and Oracle is not the only software company to face a lawsuit or complaint over alleged failed ERP project, according to analysts.

For instance, a survey released in 2012 by ERP implementation and software selection services Panorama Consulting, indicates that it is very common for ERP projects involving Oracle, SAP AG and Microsoft Dynamics software to take longer to finish than customers expect them.
The survey found that 61 per cent of firms said their projects went over schedule, 21 per cent said projects were completed on time and only 11 per cent said the projects were completed earlier than expected.

Companies undertake ERP projects because of the promise of big returns on their investment. However, Panorama found that nearly a third of the respondents have yet to achieve financial returns from their projects and 30 per cent said it took three years to being seeing any payback.

Most of the respondents laid the blame on the ERP software being used in the projects, while 14 per cent identified functionality issues on the vendor’s side and another 14 per cent identified technical issues as a reason for delays.

Change in the initial coverage of the project was a problem for 29 per cent of the respondents followed by organizational issues (20 per cent), data issues (17 per cent) and resources constraints (17 per cent).

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Jim Love, Chief Content Officer, IT World Canada

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