Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 32

Montclair State University sued Oracle over an allegedly botched PeopleSoft ERP (enterprise resource planning) software project, saying that a series of missteps and delays could ultimately cost the school some $20 million more than originally planned. The school entered into contracts with Oracle for a PeopleSoft suite that was supposed to replace a 25-year-old set of legacy applications. Those pacts included about $4.3 million for software and support. The school and Oracle also agreed on a $15.75 million fixed-fee contract for implementation services. Under the latter agreement's terms, Oracle would undertake the project in a series of "pillars,* each with a specific completion date. In turn, the school would pay out the fixed fee in a number of "milestone" payments, "each of which was tied to Oracles satisfactory completion of a particular project deliverable." Dubbed the Bell Tower Initiative, the project was supposed to be done over a 25-month period, according to Montclair.
Oracle, though, "failed to deliver key implementation services, caused critical deadlines to be missed, refused to make available computer resources that it had promised, failed to deliver properly tested software, and overall, failed to manage properly the project" the complaint from Montclair alleges. In the end, Montclair suspended the project, fired Oracle, and began looking for a replacement systems integrator. Oracle asked the school for about S8 million more than the original $15.75 million fixed fee to complete the job. In addition, Oracle blamed the school for the projects woes while accepting no responsibility for any problems, the complaint adds. Oracle then threatened to pull its staffers off the project if a new agreement wasn't reached.
Oracle fired back against Montclair's complaint, claiming that Montclair was responsible for a problematic ERP software project and saying school officials embarked on a scorched-earth" litigation campaign so as to cover up their own shortcomings. Oracle's filing attacked 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 [the university's! leadership did not adequately understand the technology)' and the steps necessary to complete the project, the filing stated. "Instead of cooperating with Oracle and resolving issues through discussions and collaboration, [Montclair's] project leadership, motivated by their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes."
After two years, the lawsuit between Montclair and Oracle was settled out of court. Although details of the settlement have not been publicly disclosed, it appears that the implementation cost Montclair more than $10 million more than it had planned.
Questions
1. What mistakes were made by Montclair University?
2. What mistakes were made by Oracle?
3. What would you recommend to officials at Montclair?
4. What improvements should Oracle make in the future?