Oracle says ERP software woes are school's own fault

Oracle moves to dismiss Montclair State University's "scorched earth" lawsuit over a troubled ERP project

Oracle has fired back against a New Jersey university's claim it is responsible for a problematic ERP (enterprise resource planning) software project, saying school officials have embarked on a "scorched earth" litigation campaign in order to cover up their own shortcomings.

Montclair State University filed suit against Oracle earlier this month, saying missteps and delays caused by the vendor's staff may end up costing the school around US$20 million more than it originally budgeted for the PeopleSoft system. It ultimately fired Oracle from the project late last year.

But Montclair still owes Oracle more than $5 million for services and work it has received, according to a counterclaim filed Friday by the company in U.S. District Court for the District of New Jersey.

"Instead of paying Oracle for the work it performed, MSU embarked on a misguided ruse which, unfortunately, is costing the taxpayers of New Jersey millions of dollars and threatens to waste millions more," the filing states.

In order for ERP projects to be successful, vendors, implementation partners and customers all must perform well at key roles as the often-complex software is implemented and old ways of working are transformed or replaced.

Oracle's filing attacks Montclair officials on this basis, while denying wrongdoing on Oracle's part.

"When issues arose during the course of the project, it became clear that MSU's leadership did not adequately understand the technology and the steps necessary to complete the project," it states. "Instead of cooperating with Oracle and resolving issues through discussions and collaboration, MSU's project leadership, motivated by their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes."

Montclair's failings "created a vacuum for outside consultants to exercise perverse influence over its direction," the filing adds. "Indeed, at the point when MSU decided to terminate the contract with Oracle and refused to pay amounts owed, a lawyer from Illinois was, in large part, running the project for MSU, and continued to profit from promoting a dispute with Oracle at taxpayer expense."

The lawyer was not identified in the document. A Montclair spokeswoman did not immediately respond to a request for comment.

Montclair officials refused to cooperate with Oracle at "critical points" and turned back a number of efforts to resolve issues, Oracle's filing adds. Instead, the school has decided to start the project over with another vendor, a move that will drastically increase the cost to taxpayers, it states.

Oracle wants a judgment for the money it is owed as well as the dismissal of the school's complaint.

Montclair has told a much different story of the beleaguered project, which is supposed to replace a set of legacy systems.

After entering into a contract with Montclair in 2009, Oracle missed deadlines and didn't properly test software, and workers assigned to the job had no idea how to execute the implementation methodology being used, according to the school.

The vendor also asked the school for $8 million more than the $15.75 million fixed-fee implementation contract originally agreed upon, it adds.

In addition, much of the work Oracle completed is substandard and the results won't be usable, according to Montclair.

It's not clear how the dispute between Oracle and Montclair will play out, but in some cases ERP customers have won significant awards against vendors and consultants sued over allegedly failed projects.

Last year, a jury in Alabama awarded pet food maker Sunshine Mills $61 million in connection with a suit it brought against Ross Systems. The vendor is appealing the verdict.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is

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Tags enterprise resource planningOraclelegalservicessoftwareapplicationsCivil lawsuitsRoss Systems

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Chris Kanaracus

IDG News Service
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