J.D. Edwards user wins nearly $2M over ERP rollout gone bad

A related lawsuit against IBM remains pending

An arbitration panel has awarded a disgruntled customer of onetime applications vendor J.D. Edwards & Co. more than $1.8 million for a botched implementation of the software maker's OneWorld enterprise resource planning suite.

Yesterday, a American Arbitration Association panel in New Orleans found in favor of the Harvey, La.-based manufacturer Evans Industries Inc. The ruling ended a saga that began in 1999, when the company launched an ERP initiative around Denver-based J.D. Edwards' applications.

Evans' lead attorney, John Landis of the New Orleans law firm Stone Pigman Walther Wittmann LLC, said he couldn't discuss the details of the arbitration board's judgment but confirmed the award and the dollar amount.

However, the basic allegations in the arbitration were detailed in a lawsuit filed in September 2000 in New Orleans U.S. District Court against J.D. Edwards, now a part of PeopleSoft Inc., and its partner IBM. The suit alleged that OneWorld was "defective and failed to operate and function as promised by the defendants."

The OneWorld system had originally been expected to go live on Digital Equipment Corp. hardware in September 1999, with IBM providing the installation and configuration services. But a year later, the system still wasn't working.

As a result, Evans charged that J.D. Edwards "has failed and refused to fulfill its obligations under its agreements" and with IBM failed to install the OneWorld software "such that it is operational." Attempts to install subsequent releases of the OneWorld software to correct problems with the initial version also failed.

That prompted the company to sue for breach of contract, fraud and negligence, among other charges, and it sought to recover several million dollars. The suit against J.D. Edwards went into arbitration, as have a number of other similar legal actions against the software maker (see story).

A PeopleSoft spokesman acknowledged that the arbitrators had awarded the money to Evans, but he declined further comment about the case and wouldn't say whether PeopleSoft plans to appeal the ruling. The spokesman noted that PeopleSoft has a combined total of about 11,000 customers following its July acquisition of J.D. Edwards. "The vast majority are highly satisfied," he said.

Although the J.D. Edwards suit has now been resolved through arbitration, a separate case against IBM remains pending in federal court in New Orleans, said Landis. IBM officials didn't comment on that case.

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