Oracle sued by university for alleged ERP failure

Montclair State University is suing Oracle over an allegedly botched ERP (enterprise resource planning) software project, saying a series of missteps and delays could ultimately cost the school some $20 million more than originally planned, according to a complaint filed last week in U.S. District Court for the District of New Jersey.

The school entered into contracts with Oracle in 2009 for a PeopleSoft suite that was supposed to replace a 25-year-old set of legacy applications, the complaint states.

Those pacts included about $4.3 million for software and support. The school and Oracle also agreed on a $15.75 million fixed-fee contract for implementation services, according to the complaint.

Under the latter agreement's terms, Oracle would undertake the project in a series of "pillars," each with a specific completion date. In turn, the school would pay out the fixed fee in a number of "milestone" payments, "each of which was tied to Oracle's satisfactory completion of a particular project deliverable," the complaint states.

An Oracle spokeswoman did not immediately respond to a request for comment.

Dubbed the Bell Tower Initiative, the project was supposed to be done over a 25-month period, according to Montclair.

But Oracle "failed to deliver key implementation services, caused critical deadlines to be missed, refused to make available computer resources that it had promised, failed to deliver properly tested software, and overall, failed to manage properly the project," the complaint alleges.

In the end, Montclair suspended the project, fired Oracle and began looking for a replacement systems integrator, it adds.

Due to the problems, the school's costs will increase by greater than $10 million, according to the complaint, which goes on to describe Oracle's alleged failings in detail.

For one, the school's contract stated that Oracle would use an application called iProjects to manage documents related to the implementation, but was unable to implement it "after numerous failed attempts," according to the complaint.

Oracle asked the school if it could instead use a program called Blackboard, for which Montclair already had a license. The school agreed, but Blackboard "proved ineffective," according to the complaint.

Oracle was also supposed to produce and maintain an "integrated project management plan," but failed to do so, according to Montclair. This "led to confusion amongst Oracle and University staff," the complaint states.

In addition, Oracle failed to keep a separate log for tracking issues and risks associated with the project, instead including them in weekly status reports, according to Montclair. This allegedly led to serious issues getting "lost with simple project problems that required minor fixes."

Oracle also "unilaterally removed or downgraded" risks identified by university officials, the complaint states.

Meanwhile, staffers Oracle placed on the project were unprepared to pull off the implementation successfully, according to the complaint.

While Oracle required the school to use a number of proprietary methodologies, many workers assigned to the job were actually subcontractors who "had no knowledge of the [methodology], didn't understand it, and weren't trained to use it."

Moreover, Oracle "continually rotated staff in and out of the BTI project," causing confusion and wasted effort "as new Oracle staff wanted to do things their way."

Oracle "ignored" many complaints lodged by Montclair officials about the staffing changes, according to the complaint.

School and Oracle officials had a series of meetings between July and September 2010, during which the university repeatedly asked Oracle for a project plan with realistic completion timelines, it states.

On Sept. 27 of last year, Oracle asked the school for about $8 million more than the original $15.75 million fixed fee to complete the job, according to the complaint. In addition, Oracle blamed the school for the project's woes while accepting no responsibility for any problems, it adds.

Oracle then threatened to pull its staffers off the project on Oct. 28 if a new agreement wasn't reached, according to the complaint.

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