Large ERP projects are notorious for cost overruns and missed deadlines, and these projects can sometimes lead...
to a large ERP lawsuit. That's what happened with MillerCoors, which filed a $100 million lawsuit last year against India-based IT services firm HCL Technologies. The American brewer alleged a bungled SAP ERP implementation. But, despite a series of harsh allegations over the project, the two firms recently settled the case.
When asked to comment, MillerCoors said in an emailed statement that all claims between the firms "have been amicably resolved," and the lawsuit "has been dismissed without any finding or determination by the court of any issue either for or against any of the parties."
The MillerCoors ERP project was "aimed at driving efficiencies, innovation and growth across MillerCoors' various breweries," with the help of a new enterprise SAP software system. But the project went awry. It exceeded the budget, wasn't delivered on time and the contractor didn't staff the project with enough people, the brewer alleged in court records.
ERP lawsuit highlights dissatisfaction with project
This lawsuit's claims and counterclaims brought to the surface tensions that can rise in ERP projects.
MillerCoors sought in "excess of $100,000,000" in damages, and accused HCL -- one of India's largest IT services firms -- of "gross negligence."
But HCL punched back and said MillerCoors was using HCL as a "convenient scapegoat to shield its own leadership from blame," according to court papers.
After a flurry of court filings, the two sides entered into settlement discussions and eventually reached an agreement in an Illinois federal court. The court records do not detail the terms of the ERP lawsuit settlement, other than noting that each party will bear its own cost in the action. The parties involved included MillerCoors, Molson Coors Brewing Co., HCL Technologies and HCL America Inc.
Many ERP projects exceed budget
But dissatisfaction with big ERP implementations is far from unique.
In a survey earlier this year, Panorama Consulting found just over half of enterprise ERP users were satisfied with their ERP vendors, with more than one-in-five saying they were "very dissatisfied." The survey was based on responses from 237 firms, mostly in North America and generating on average $439 million in revenue.
In the same survey, 64% of respondents said their ERP projects exceeded the budget. The No. 1 reason for this, cited by 45% of survey takers, was "unanticipated technical [or] organizational issues." The No. 2 reason, at 43%, was an "unrealistic budget."
Panorama also found most users never see the return on investment they were expecting. According to the survey findings, almost half of respondents (48%) said they only realized between 51% to 81% of the ERP project benefits. Another 43% of respondents reported an even lower number -- between 31% to 50%.
In August, Wipro, another large India-based IT services firm, settled an ERP lawsuit with National Grid, an electric and gas utility company. National Grid said the contractor was paid $140 million for an allegedly bungled project. Wipro settled the case for $75 million.