Users, J.D. Edwards Face Arbitration

Cases involve early rollouts of applications

The fallout from problematic early installations of J.D. Edwards & Co.'s OneWorld business applications continues to be felt by the vendor and some would-be users that are pursuing legal claims against it.

Analysts said performance issues and functionality gaps that affected some early adopters of OneWorld have long since been resolved. But J.D. Edwards this month is scheduled to go into preliminary arbitration hearings with Los Angeles-based Spectratek Technologies Inc., which is one of at least five disgruntled customers that took legal action after running into problems on OneWorld rollouts.

Spectratek, a maker of decorative products such as holographic films and glitter, alleged in a lawsuit filed in June 2000 that J.D. Edwards didn't deliver promised data-sharing and bookkeeping functions in the OneWorld release it tried to install under a contract signed in late 1998.

"The system wasn't ready yet when [Spectratek] bought it," said company attorney William McTaggart, who works at Los Angeles-based law firm Parker, Milliken, Clark, O'Hara & Samuelian. Spectratek stopped work on the project in early 2000 and has had to continue using its legacy procurement and accounting systems, he said.

As part of its suit, the company is seeking to recover more than $660,000 that it paid in licensing and service fees to Denver-based J.D. Edwards and Business Systems Specialties Inc., a systems integrator in Newport Beach, Calif.

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The World of OneWorld

History: The software was introduced in 1996 and became available the next year. A collaborative OneWorld Xe release was added in 2000.

Number of users: 1,300

Key components: Distributed object architecture, built-in business rules engine, Web-based user portal

Operating systems supported: Windows 2000/Windows NT, AIX, HP-UX, Solaris, OS/400

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Another user that sued J.D. Edwards, Park Hill, Okla.-based Greenleaf Nursery Co., last week said it turned off most of a OneWorld-based enterprise resource planning system in December and replaced it with a combination of homegrown code and applications developed by Microsoft Corp.'s Great Plains Business Solutions division.

Greenleaf's OneWorld applications went live in late 1999, but company attorney Reece Morrel Jr. said the software didn't properly handle functions such as invoicing and inventory management. That forced Greenleaf to rely on manual processes and resulted in lost sales, spoiled inventory and an inability to collect accounts receivable, according to the company's lawsuit.

In the suit, which was filed last July, Greenleaf alleges breach of contract and seeks $40 million in project costs, damages and legal fees. The case is expected to go to arbitration this year, Morrel said.

OneWorld was J.D. Edwards' first product that ran on Windows and Unix servers in addition to IBM AS/400s. Other early adopters that have taken action against J.D. Edwards include Evans Industries Inc., a container maker in Harvey, La.; Supercom Inc., a Fremont, Calif.-based computer parts distributor; and Doskocil Manufacturing Co., an Arlington, Texas-based maker of pet products and sporting goods.

Evans filed a suit in late 2000; J.D. Edwards said it has since been dismissed, but an official at Evans disputed that claim. Doskocil requested arbitration proceedings last November, while Supercom did the same in June 2000.

A J.D. Edwards spokesman said the software vendor believes it did nothing wrong and will vigorously defend that position. "The [OneWorld] solutions did not meet the expectations of these particular customers for a wide range of reasons, and we do not believe it was because of the quality of J.D. Edwards' software," he said.

A spokesman at Business Systems Specialties declined to comment in detail on Spectratek's suit. "Our involvement in the case is only because of alleged problems with the J.D. Edwards OneWorld product," he said. "Everything we did was appropriate."

Jim Shepherd, an analyst at AMR Research Inc. in Boston, said it's not surprising that OneWorld had some start-up problems because of the new technologies that were built into the software, such as its graphical user interface and distributed object architecture. But J.D. Edwards acknowledged the problems and fixed them, Shepherd said. He added that he considers OneWorld to now be "very stable and high quality" software.

Copyright © 2002 IDG Communications, Inc.

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