Customer sues Epicor after ERP software project attempt ends in 'big mess'
- — 30 November, 2011 07:11
A would-be Epicor customer is taking the ERP (enterprise resource planning) vendor to court over a "big mess" of a software project that it says ended up battering its bottom line instead of improving operations.
In January 2010, commercial outdoor furniture seller ParknPool began looking for a system to supersede QuickBooks, which it had been using for some time with success, according to a lawsuit filed Nov. 23 in U.S. District Court for the Western District of Virginia. The suit also names an Epicor partner, EstesGroup, which performed systems integration work on the job.
"QuickBooks was still working for us, it's just there was no growth potential," said Jim Fonner, administrative manager of the Lexington, Virginia, company, in an interview. "We were getting to the top of what QuickBooks could do."
ParknPool, which has about 20 employees, evaluated a number of systems and the final choice came down to Epicor and a product from Sage. Epicor got the nod after ParknPool came to believe it had a more tightly integrated system, he said.
An Epicor representative also told ParknPool that its current hardware setup would be sufficient and that a fully functional system could be installed fairly quickly, but neither promise held true, according to the company.
"Epicor said they could do it in seven weeks. We gave them seven months, and we got zero," Fonner said. "I couldn't even look at a profit-and-loss statement. We couldn't process orders. We were saying, 'QuickBooks is so much better than this' and we were paying $3,500 a year for it."
ParknPool is a "drop-ship" operation, wherein it acts as a type of middleman, keeping no items in stock. Instead, manufacturers, sometimes a number of them, ship orders once they are placed.
"Because we're a drop-ship business, we need to invoice our client after the last item ships, because they could ship from multiple locations," Fonner said. "The Epicor system couldn't deal with that."
Another snafu led to doubled commission payments for ParknPool's sales representatives, he said. ParknPool let the salespeople keep the extra money rather than deal with the morale problems taking it back would cause, according to Fonner.
Epicor also performed something of a bait-and-switch with ParknPool, initially saying that the company's need would be met with a specific set of software modules, but then saying that more were required after the project started, Fonner said.
For example, "we had to buy the manufacturing module in order for the payroll to work," he said. "We don't do any manufacturing. It was just a big mess."
Compounding matters was the fact that ParknPool was getting into its busiest season and needed a system in place by March of this year, according to the suit.
In February, ParknPool expressed its concerns about that deadline being met and in response, EstesGroup workers told them that the software being installed was an "untested and unapplied version" that had to be modified to accommodate ParknPool's drop-ship distribution model, according to the suit.
EstesGroup told ParknPool that it had the ability to complete the system, but also asked that it "close its contract with Epicor" and deal with it directly, the suit states. ParkNPool then signed a contract with EstesGroup but the company was unable to complete the job, it adds.
EstesGroup did not respond when ParknPool sent it a list of problems with the system and ultimately ceased working on it altogether, according to the suit.
ParknPool managed to get through its busy season despite the problems, partly because it had kept running QuickBooks in parallel with Epicor, but "it was a pretty scary time," Fonner said.
ParknPool's suit is asking for US$250,000 in damages along with attorney's fees and other monies. The company has spent at least $250,000 on the Epicor project, according to Fonner. "It's in excess of that, but then you get into those costs you can't measure."
The company's bottom line has been impacted as a result, he said. "We'll definitely take a loss this year."
Epicor "strongly denies the allegations made by ParknPool in its complaint," a spokeswoman said in a statement. "Our products, consulting personnel and partner performed well, all of which Epicor believes will be borne out as we defend our position in any proceedings, including counterclaiming for amounts rightfully owed by ParknPool."
ParknPool is still using QuickBooks and has no immediate plans to try another ERP project, according to Fonner.
"Since then, we've learned different ways of programming against QuickBooks, and kind of set our sights a little bit lower," he said. "It's not that we wouldn't do an ERP again, but that was such a bad experience, my staff here needs some time to get over being wounded like that."
Troubled ERP projects seem to be an unfortunate fact of life in the IT industry.
That said, there are multiple sides to the story in a given project failure, said Michael Krigsman, CEO of Asuret, a consulting firm that advises companies on how to run successful IT implementations.
In the case of ParknPool and Epicor, it's a "massive change to go from QuickBooks accounting system to an ERP system," he said. "Epicor is not QuickBooks -- they're going to function differently."
"What is clear is that neither Epicor nor the SI nor the customer entered this deal for it to fail," he added. "Assuming all parties are basically honest, there was a mismatch of expectations about what the system would do. Unfortunately, lawsuits like this present a highly one-sided version of the truth, and in most cases there's plenty of blame to go around."
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com