Implementation of an ERP System to Replace a Global Legacy System

Summary of WSRcg Opinions - Engaged by Plaintiff’s Counsel Testified August 2015

This dispute involved a world-class Defendant Integrator hired to provide leadership and project management in the customizing, configuring & implementing of a global SAP system for a multi-national manufacturer/distributor with 1st release in North America.

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Failed Implementation of A Real-Time ERP System

Summary of WSRcg Opinion - Testified September 2015 & in re-Trial October 2017 $80 - $100 Million Bench Trial Engaged by Plaintiff’s Integrator Counsel:

This dispute involved a proprietary ERP system developer/Plaintiff Integrator (using a complex real-time transaction capture and processing system, interfacing with mechanical devices, robots, and multiple third parties) and a Defendant State Agency Customer with a goal of collecting hundreds of millions of dollars “$1 at a time.”. Names not displayed as verdict is pending.

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Missed Critical Target dates on a Large State ERP. Why? How should project be continued?

Engaged by Plaintiff State of South Carolina Against Large Gov’t Systems Developer Testified in Winter 2014

A renowned Defendant system developer gets through 31% of its system test work in 11 months. The entire system test was scheduled for 5 mos. What does that tell re Defendant’s software, its testing expertise, its ability to deliver the contracted for system, and the value/reuse value of work performed thus far.

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Computer & Systems Failure Litigation: Expert Tales and Lessons from the Crucible - Parts 1 & 2

This peer reviewed article presents four of our large litigated cases: three ERP systems lawsuits in very different industries, and a fourth case starting out as a basic copyright/trade secret infringement matter that ends up being decided upon based on WSRcg expert testimony – but with a twist.

Based on our proprietary litigation methodology, you will see that virtually all systems failures derive from the same few recurring faulty practices/shortcuts taken -- by either party.

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WSRcg Case Examples

WSR Consulting Group, LLC has testified and given expert opinions in the following areas, among others:

  • Explaining the intentions and performance of the parties in a specific contract at the time and for the purposes given.
  • Opining on the systems development life cycle methodology (SDLC) selected for the project, and adherence to important features and tasks therein.
  • Suitability of the estimates and estimating process.
  • Suitability of system architecture and database schema to beat performance and security goals.
  • Suitability/execution of various project subplans including: test plan, org. structure plan, training plan, go-live plan.
  • Evaluation of project risk planning, management, reporting, mitigation, and avoidance.
  • Who and what caused the system/project to fail; root causes of delays, cost overruns, poor quality, and suitable software.
  • Determining and explaining the causes of Internet, commercial software and ERP systems’ alleged "failures" including SAP, Oracle, Microsoft Dynamics, PeopleSoft, JD Edwards, Cerner, and Retek ERP systems, among others.
  • Presenting the financial, schedule, and quality impact of deviating from the contract and not performing the stated rolls and delivering the contracted for products.
  • Evaluating the adequacy and suitability of the assigned project team at all levels.
  • Effectiveness of QA role.
  • Determining the added cost(s), technical debt, and lost profits and missed opportunities, estimates to complete, and value of a system developed/delivered under poor/less-than-contracted-for Quality Controls and Quality Assurance; inadequate requirements; bad design; maverick programming; incomplete testing; insufficient training, wrong organizational change management; poor risk management, and relative Go-Live readiness.
  • Testifying on material differences between the actual defects delivered versus the predictable defects had the project been performed with average, or better than average planning and management.
  • Misappropriation of trade secrets; copyright infringement.

Sampling of Litigation Cases

  • Engaged by a US manufacturer/distributor of custom products in a dispute involving a failed Oracle Enterprise Resource Planning (ERP) system and its Big 5 consulting system integrator. Our report and testimony showed project was poorly managed, did not follow promised or industry standard methodologies, was never completely tested, and used unacceptable data conversion and systems implementation methods.
  • Engaged by a major utility company that was delivered highly customized software developed by a celebrated international systems integrator. The integrator had allegedly failed to design and implement a Human Resources system on schedule. The system was also purportedly “unworkable”. We reviewed the project management processes promised versus used. Our findings & conclusions were a major element in settlement discussions very favorable to our client.
  • Engaged by a Fortune 500 Company that hired a Big 5 consulting firm to develop a complex, international, large-scale system to automate all aspects of their business. Over $50,000,000.00 was paid to the consultants for a system that was never properly and professionally delivered. Areas in our expert report covered: the role of the System Integration Project Manager; control over sub-contractors; the stability, performance, functionality of the system; issues of scope creep; the design/use of the Oracle data base; and readiness to go live.
  • Engaged by a Joint Defendant Hospital Customer and Software Vendor in a dispute where Plaintiff Integrator/Outsourcer sued hospital defendant for $10,000,000 claiming that it was ready to Go-Live several months earlier, but for delays caused by Defendants. WSRcg experts were deposed and testified in arbitration that the Plaintiff had: poor staffing; discarded reasonable project management principles and tools; abandoned contractually promised SDLC methods; never stabilized the system's underlying technical infrastructure; and contributed to concurrent delays with its own critical, ongoing systems defects. Result: Finding for Defendant.
  • Engaged by Defendant Developer who built a database, geographic reference maps & an application to manage assets and outage events for a large Plaintiff utility operator. However, Plaintiff prolonged the site acceptance test with multiple changes and then terminated project on cusp of completion. We analyzed error logs & modifications from the acceptance test and advised the client on its poor chances of success at trial. Result: Developer settled with Customer.
  • Engaged by an international medical company’s plaintiff attorneys in a matter involving a system developed by a major outsourcer. Our research, report, and testimony helped show that the system developed was not of workmanlike quality, was not built using the outsourcer’s “System Life Cycle Methodology” or any industry standards, and did not work.
  • Engaged by an international fast food company’s defense attorneys to prove that an integrated POS system that was never installed by the integrator plaintiff company was fundamentally flawed, would never have worked, was not fault tolerant, couldn’t handle peak performance, and was inappropriate for intended environment. Also testified on contractual issues.
  • Engaged by a new Asian stock exchange to determine whether said exchange had a viable claim against its computer systems vendors, developers, and integrators. Issues resolved including as-promised design vs. as-produced design, project management and budget/estimation issues, poor system quality, readiness to go live, and contract interpretation.
  • Engaged by plaintiff attorneys for a large magazine subscription company (with complicated data base requirements) vs. an integrator/developer. Case settled at very favorable terms to plaintiff. Involved source code issues, design/implementation quality, Y2K issue, recovery/restart failure, performance, other issues.
  • Engaged by Defendant, a small specialized vendor of software that was acquired by and later sued by a Fortune 500 company Plaintiff for overpayment based upon overly low estimates for cost/completion. The acquisition involved several very large multi-million-dollar state government projects in process. WSRcg evaluated the estimates, financial statements and progress reports of several projects presented as due diligence for the acquisition. Along with our rigorous presentation on the value of an estimate prepared at a given moment in the “Cone of Uncertainty,” we also uncovered evidence that pointed to the Fortune 500 Company’s own failure to assign the appropriate personnel capable of integrating a system as complex and regulated as State Government systems. Although the defendant’s estimates were unreliable, the plaintiff’s execution of the contract after they purchased the project was deeply flawed and caused the ongoing cost, schedule and quality challenges with the project. Result: Settled out of court.
  • Engaged by US Government customer (and DOJ) to determine whether its large/successful systems Integrator violated “Anti-Kickback Act” on the current project. Upon finding a labyrinth of money changing, we opined hidden kickbacks were paid & received. Our review of the system proved that the Integrator neither followed its own promised SDLC or that of the customer resulting in a too difficult and highly risky system to maintain and enhance. We opined the developed system did not meet contract requirements. Court upheld termination for cause, and illegal kickbacks. Integrator ordered to pay 63,000,000.
  • Engaged by Plaintiff Software Integrator against Defendant State Legislature that hired Plaintiff to build a Legislation Tracking System based on Microsoft’s SharePoint platform. A newly elected Legislature refused to honor the bargain struck in development contract. WSRcg testified on the unique business bargain created by the contract (that the delivered system would be accepted & used “warts and all” and fixed later, and demonstrated that the integrator applied an appropriate methodology for that unique circumstance. We also opined/demonstrated that the Defendant Legislature introduced an unreasonable amount of change during acceptance testing preventing delivery/Go-Live. Result: Our expert analyses/opinions were instrumental in conduct of depositions. The Defendant settled on terms that paid the Developer all the contract price, interest and legal costs.
  • President Clinton, as head of the Base Realignment and Closure (BRAC) Commission, ordered to close a computerized robotics army base that allegedly failed to meet contractual performance requirements during Desert Storm. The government refused to pay the $150++ million owed to Plaintiff software, robot and smart building developer. WSRcg visited the base site, reviewed and analyzed performance history and stats of the base during the war, and developed a 3-D simulation model which proved that there were fundamental/pervasive design & implementation flaws plus Plaintiff unilateral decisions that caused the system and robots to crash. Result: complete exoneration for Defendants.
  • Engaged by Canadian Government as expert in litigation involving an allegedly failed system to deliver a complex, state-of-the-art federal employee payroll system characterized by “exception” processing. Opined re: project/risk/requirements/configuration management, estimation, design & staffing issues, & QA.
  • Separately engaged by defense attorneys by a Canadian Province as a strategist/expert in a large-scale province-wide healthcare reimbursement information system. Testimony covers cause of delays, poor quality in testing, unsuitability for intended purpose, not ready to go live, and cause of cost overruns.
  • Engaged by a major Casino-Hotel operator/plaintiff that hired a Defendant software developer of front-desk room revenue management software to create entirely new functionality and adapt its’ software to meet the different requirements of a gaming resort – i.e., keeping tabs on gamers’ activities to offer individualized incentives for gamers to play more. We opined that based on Developer’s lack of understanding/documenting many new algorithmic requirements, failure to follow any acceptable/promised SDLC, and the software’s number/nature of defects after months of delay/attempted remediation, the Plaintiff had a reasonable basis to lose confidence in Developer’s ability and willingness to deliver a system that would work and meet its requirements. Case settled favorably for plaintiff.
  • Engaged by attorneys as strategist/expert in multiple matters re complex POS (Point of Sale) systems for large restaurant chains and multi-state retail chains. Developed standards/models for proving delivered systems met contract and industry standards; and that "the software worked; the hardware worked; the users liked it" despite existence of "acceptable" defect levels. In other matters, we proved contract was breached.
  • Engaged as consultant in RICO, malpractice, and fraud matter against management and auditors in large, bankrupt national retail chain. Established key standards of reasonable behavior for officers/directors/auditors in extant case.
  • Engaged by the Defendant commercial software developer in a lawsuit involving Plaintiff allegations of copyright and trade secret infringement by a large competitor – with projected damages far exceeding Defendant’s financial base. We opined with responses to detailed allegations, one by one, to the effect that most, if not all, described common/ old programming techniques used in the computer industry -- not protected innovations in any ordinary or legal sense. After losing a succession of MSJs, Plaintiff narrowed scope of its complaint and settlement position well below the Defendant’s cost projections for continuing the case to a defense verdict. Result: case settled.
  • Engaged by Plaintiff who was suing defendant for infringing on his trade secrets -- including unique and intelligent HIPPA codes, formatting, file organization, computer logic and algorithms, and technology -- supporting a federally mandated law developed for decoding and efficiently/effectively processing doctor and hospital bills and insurance reimbursements. WSRcg experts were deposed in this matter. Result: Judgment in favor of Plaintiff.
  • Engaged by Plaintiff Web Developer claiming a large industrial/consumer retailer Defendant stole Plaintiff’s ideas for its own web-based applications, made available to Defendant in an idea submission. WSRcg provided a definitive analysis that demonstrated the retailer copied the ideas for the web-based application directly from the prototypes that the developer provided. Result: Developer received payment in a settlement.
  • Engaged as consultant to discover if new technology patent was infringed by competitor hiring former employees.
  • Appointed Special Master to the Court in determining/opining on whether proprietary software had been stolen (illegally copied) and was being illegally used by a competitor. Solution involved high-tech sleuthing.
  • Engaged as an expert and strategist in a matter re: complex misappropriation of trade secrets issues, bad faith rejection of a software co. purchase, and opining on reasonableness of due diligence, systems tests, and grounds used to reject deal.
  • Engaged by Federal Defenders Office representing the Defendant prisoner (on death row for 12 years and in prison 4 years before that for murder) for his final appeal. We uncovered evidence using our experience and expertise regarding 16-year-old electronic Point-of-Sale (POS) devices, credit/debit card processing switches/machines, and related bank processing rules/technologies to prove that the only eye witness, whose critical testimony was the basis for conviction, could not have been at or near the scene of the crime to see the Defendant commit any act she testified to. The case is still Pending.
  • Engaged by Plaintiff Class-action Bond Investors suing billion-dollar Regional Supermarket Chain Defendant claiming the Defendants did not properly disclose in its issued Prospectus: (1) the failing state of its IT and (2) the risks linked with its lack of progress & investment in IT systems modernization and (3) the chain’s resulting inability to make informed decisions to achieve sustainable performance/profitability against increasingly competitive Walmart and others. WSRcg opined that the Defendant did not disclose the above appropriately. Result: Case settled in favor of the Plaintiffs.
  • Engaged by a pure dot com company sued by shareholders after their IPO value dropped considerably, for allegedly releasing poor and untested Internet service product(s). Reports & testimony demonstrated that systems were well architected, designed, tested, released following better than industry accepted practices in: QA; project organization & management; acceptance, alpha/beta test release criteria; and post production help desk and defect correction/control.
  • Engaged by multiple insurance companies in Y2K “sue and labor” matters. Bottom line -- clients were sued for $73,817,594.00. Amount paid: $0.00.
  • Engaged in matters involving launches of new hi-tech products (both with and without competition). Established and opined on "best efforts vs. actual efforts", market size/share potential, and royalty and damage calculations.
  • Consulted on, or managed Claims Administration systems and functions in large class action lawsuits.