IBM is “surprised” by SAP project lawsuit

By Tony Collins

US-based Avantor Performance Materials manufactures chemicals and raw materials used in laboratories for research, pharmaceutical production and medical lab testing. Its electronics products are used in the manufacturing of semiconductors and flat panel displays.

The company has issued a press release saying it has filed a lawsuit against IBM in connection with a failed SAP software implementation.

Its complaint was filed on 8 November in New Jersey. Avantor says it retained IBM to upgrade the company’s global computer systems to an SAP platform. Avantor claims that IBM misrepresented the capabilities of its proprietary software solution.

“IBM representatives assured us that its Express Life Sciences Solution, a pre-packaged software solution, was suitable to run Avantor’s core business processes,” says John Steitz, President and CEO of Avantor. “In fact, the solution—and the service and support offered by IBM throughout the implementation—proved to be woefully misaligned with the unique needs of our company and our customers.”  IBM’s Express Life Sciences Solution runs on SAP.

“Over the past approximately seven months, Avantor has undergone an aggressive, company-wide initiative to recover from the failed SAP implementation, and Avantor is now largely operating at pre-SAP implementation service levels,” says the company which is seeking damages of tens of millions of dollars.

IBM told Reuters the accusations were blown out of proportion and that it was surprised by the move.

“We believe the allegations in the complaint are exaggerated and misguided and are surprised that Avantor chose to file suit,” said IBM which added that it had “met its contractual obligations and delivered a solution that Avantor continued to use in its operations.”

The writ is reported to claim that the SAP implementation caused a “near standstill” of Avantor’s business.  Avantor in 2010 chose to replace its ERP (enterprise resource planning) platform with SAP.  A global SAP roll-out was planned as part of a rebranding and growth strategy.

Avantor says the implementation failed to provide crucial functionality that Avantor needed to run its core business processes. In the writ Avantor also criticised some of IBM’s consultants.

After go-live a number of errors are said to have emerged, ranging from failure to track or process orders correctly to directing “that dangerous chemicals be stored in inappropriate locations”.  The company paid IBM $13m. It claimed that IBM was seeking more to remedy issues around the software implementation.

Computerworld reports an allegation by Avantor that IBM failed to tell Avantor about risks to the project and hurried towards a go-live date.

Computerworld says the lawsuit alleges that IBM conducted inadequate and truncated testing and recommended that Avantor proceed with the go-live as scheduled – even though Avantor had emphasised that meeting a projected go-live date was less important than having a fully functional System that would not disrupt Avantor’s ability to service its customers.

The resulting system did not process orders properly, lost some altogether, and did not generate paperwork for customs officials, the writ is reported to state.

IBM and Avantor met one of Avantor’s biggest customers, which expressed a concern that its EDI (electronic data interchange) with Avantor for product ordering wouldn’t work after the changeover, according to the suit. The EDI interface failed on go-live, the lawsuit is reported to say.

Avantor was told to cancel every pending order and reset the entire system in the light of pervasive warehouse problems. This was necessary to discover the root cause of the problem, IDG reports the lawsuit as saying.

IBM said it disagreed with the claims and will defend itself against them vigorously. Avantor’s lawsuit is said to accept that IBM made efforts to right the project’s course following a June meeting with Avantor’s then-CEO, Rajiv Gupta.

IBM “began to acknowledge the severity of the situation” and replaced many of the original consultants, according to the ;lawsuit. These workers did extensive redesign and programming.

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