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Biggest ERP failures of 2010

By Chris Kanaracus
December 17, 2010 03:25 PM ET

Here's a look at some of the top ERP project boondoggles, flameouts and failures of the year -- and these are just the ones that entered public view.

New York's CityTime 'disaster'

CityTime, an effort by New York City to modernize its payroll system, is more of an ERP "project failure of the decade" and then some, as it dates to 1998. But in recent weeks allegations of massive corruption and waste regarding the project have come to a boil.

It was originally budgeted at around $60 million, but has since ballooned to a colossal $700 million-plus, the New York Daily News reported recently.

New York Mayor Michael Bloomberg has called the project a "disaster." This week, federal authorities charged a number of workers on the project with being the ringleaders of a fraud scheme that siphoned some $80 million from taxpayers, reports said.

On Thursday, New York Comptroller John Liu suspended Joel Bondy, executive director of the city's office of payroll administration, and stopped all payments to consulting firm Spherion until a thorough review has been conducted.

New York officials simply did not understand just how complex the project would end up being, Bloomberg said in a radio interview Friday. "Once they started, part of it was they just kept adding things that it made sense to do," he said.

But he stressed that the city still needs the system "desperately," and it is saving money for agencies that are using it. The project is on track for completion by June, he added.

BSkyB settlement from HP/EDS

While the £318 million settlement broadcaster BSkyB received in June from Hewlett-Packard was technically for a CRM (customer relationship management) implementation, not ERP, the award still stands to make a serious impact on the outsourcing business.

A court found that HP's EDS division had lied about how long it would take to finish the project, which was started in 2000 and originally budgeted at £48 million. BSkyB fired EDS in 2002 and completed the job itself, but costs ultimately quintupled.

Some believe the massive verdict will give systems integrators and salespeople pause from here on out when making promises at the contract negotiating table.

Marin County's "rip and replace"

If there is a worst way for an ERP project to end, it's with a "rip-and-replace," and that's what officials in Marin County, California, decided to do in August.

Officials decided that it would be less expensive to simply replace its ailing SAP system with something else, instead of trying to fix widespread problems with it.

Marin County sued system integrator Deloitte Consulting in connection with the system earlier this year, saying Deloitte used the project as "a trial-and-error training ground" for inexperienced employees, and the result was a "costly computer system far worse than the legacy systems it was intended to replace."

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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