Avanade sued over failed ERP project

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Avanade sued over failed ERP project

Terminated project cost three times the original estimate.

US-based point of sales ISV Scansource is taking Avanade to court over a failed enterprise resource planning project that ended up costing three times as much as the original estimate.

In a strongly-worded statement, ScanSource says the Microsoft and Accenture joint venture misrepresented its skills and provided a "revolving door of consultants" that knew little or nothing about implementing Microsoft Dynamics AX or managing large ERP projects.

"The result was an incomplete and defectively designed system that suffered from numerous flaws and required extensive remedial work," the statement read.

"Avanade’s incompetence was reflected in, among other things, the staggering 500,000 lines of software code it wrote in an attempt to have the Microsoft Dynamics AX platform meet ScanSource’s business requirements."

ScanSource claimed this amounted to 'bait-and-switch sales tactics', as the company has had to de-scope functionality for the project and even write some applications itself to fill the gap.

ScanSource says the project was originally estimated by Avanade to cost US$17 million (A$17.25 million) and take eleven months to implement.

However, Avanade has charged ScanSource US$37 million (A$35.4million) throughout the implementation period, and wanted a further US$29 million (A$27.7 million) in additional fees for a total of US$66 million (A$63 million) to conclude the project.

The company will seek to recover the money it has spent with Avanade.

According to ScanSource, both Microsoft and Accenture have concluded that the implementation - now terminated - was mismanaged. Both have made suggestions to help get it back on track, including preparing an integrated project plan.

Avanade, founded in 2000 by Microsoft and Accenture, employs some 17,000 staff worldwide, and has not provided comment on the dispute.

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