Marin County accuses SAP, Deloitte Consulting of a racketeering scheme
In February, the government of Marin County, California, sued Deloitte Consulting and SAP in federal court, claiming they had "engaged in a pattern of racketeering activity" aiming at bilking the county out of more than $20 million in connection with a failed ERP project.
Marin County had originally sued Deloitte in a lower court last year, claiming that the systems integrator had dumped inexperienced workers on the project, which led to the problems. The county has decided to rip out the SAP software and replace it with something else, in the belief that doing so would be a lower-cost option to finishing the job.
Its suit alleges that SAP and Deloitte are in violation of the federal Racketeer Influenced and Corrupt Organizations act. Under the statute, the county's desired $35 million in damages would be tripled.
Marin County later said that SAP enticed it into joining a "Ramp-Up" early adopter program for the software suite, a move it claims ended up contributing to the project's failure since the software was new and risky.
SAP and Deloitte have both denied any culpability. Deloitte has called Marin County's federal suit a "frivolous" tactic and an attempt to get a more favorable legal forum for its claims, while SAP has questioned why it would want to collude with Deloitte on a project that was doomed to fail, among other defenses.
The lawsuit has yet to go to trial. A case management conference is set for Jan. 27.
Epicor customer sues after allegedly wild cost overruns
It's common, and the cynical might say expected, for ERP projects to end up costing more than originally expected. But five times as much? That's the claim of Whaley Foodservice Repairs of South Carolina, which sued Epicor in August.
Whaley, which sells and fixes equipment used by commercial kitchens, first started talking to Epicor about an ERP project in 2006. The system was supposed to be implemented and live in Whaley's home office as well as a dozen branches by March 2007, but that goal was never met and the software has never worked as it was supposed to, according to Whaley's lawsuit.
The project's implementation topped $1 million, or more than five times the original estimate of $190,000, according to the suit. Epicor has denied wrongdoing, and says that under the terms of the companies' agreement, Whaley still owes it more than $283,000.
Auditors: ERP software woes could cost Idaho millions
In March, an Idaho state auditor released a report that found that problems with a new system developed by Unisys for processing Medicaid claims could end up leading to the loss of millions of dollars.
The system is supposed to handle claims from health care organizations that treat patients who receive Medicaid. But design defects and other issues led to many payment delays and faulty processing of claims, according to the auditor. The state ended up sending more than $100 million in advance payments to providers while figuring out the problems.
It since began attempting to get that money back, but some $2 million was "at risk of not being recouped at all," the report said.
The auditor's report also pinpointed a potential root cause for the problems, noting that the system went live before certain testing milestones had been reached.