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Oracle, Montclair State University settle lawsuit over PeopleSoft software project

Expert: ERP project lawsuits are often the result of poor communication between customers and vendors

A nearly two-year-long, ugly legal battle between Oracle and Montclair State University over a troubled PeopleSoft ERP (enterprise resource planning) project has ended in a settlement both sides are calling amicable.

"Montclair State University and Oracle America, Inc. are pleased to announce that they have amicably resolved their dispute," the parties said in a statement released late Friday. "Both entities are now looking toward the future of their relationship." Terms of the settlement weren't disclosed.

The New Jersey school sued Oracle in May 2011, claiming that due to serious mistakes and delays on the part of Oracle, the project would cost up to US$20 million more than the original budget to complete. Among other things, Oracle staffed the project with unprepared staffers, missed deadlines and didn't adequately test the software, Montclair had alleged. Before it won the bid for the job, Oracle even used a "rigged" software demonstration that falsely made it seem like some functionality was part of Oracle's base system, according to Montclair. But Oracle countersued Montclair, claiming that the school's legal action was part of a "scorched earth" campaign meant to cover up its own shortcomings on the project. Oracle alleged that school officials were hard to work with, and that "MSU's project leadership, motivated by their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes," according to its countersuit. In September, Oracle managed to get some of Montclair's claims tossed from the case.

ERP projects are typically complex affairs that require software vendors, systems integration staffers and customers to each play important roles for the effort to be successful.

Cases like the Oracle-Montclair lawsuit have arisen with regularity over the years.

The disputes "usually arise from faults on both the customer and vendor sides, so settling just makes sense," said analyst Michael Krigsman, CEO of consulting firm Asuret. Faulty communication and mismatched expectations are usually to blame, Krigsman added.

But customers must take final responsibility for the success of their projects, according to Krigsman. If a customer "does not have sufficient experience to manage and absorb the business process changes created by an ERP project, then perhaps they should reconsider the software purchase," he said.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com


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