Epicor Customer Lawsuit May Show Danger of Going Solo on ERP Software Project

Group Manufacturing Services wants its money back, but Epicor says the customer erred by attempting the project on its own

By Chris Kanaracus
Tue, April 10, 2012

IDG News Service (Boston Bureau) — Epicor is being taken to court by a customer over an allegedly failed ERP (enterprise resource planning) implementation, but the case may illustrate the potential dangers customers engender by embarking on such IT projects by themselves.

Group Manufacturing Services, a contract manufacturer for sheet metal and plastic fabrication, began speaking to Epicor about a potential software purchase in March 2011, according to the company's lawsuit filed last week in U.S. District Court for the District of Arizona.

Epicor representatives showed up the next month and conducted an on-site inspection meant to determine how well its software would meet the company's needs, it adds. Those Epicor employees told the company that the Epicor 9 software was "a perfect fit," and that "the installation process would be smooth, straightforward and timely given Epicor's expertise," the lawsuit stated.

No "significant customizations" would be needed and any minor tweaks could be done by Group Manufacturing's own employees, Epicor allegedly said, according to the lawsuit.

Based on those representations, Group Manufacturing signed a deal with Epicor for the software and implementation and has so far paid it about US$70,000, it added.

However, despite Epicor's pledges, the project "consumed countless hours of Plaintiff's staff time, was sporadic, and problems endlessly erupted throughout," according to the lawsuit.

But in pre-sales demonstrations, Epicor told the company that it had "wonderful tools," including manuals and training guides, that would make the installation easy, Group Manufacturing Vice President Roger Kelling said in a letter to Epicor, which was filed with the suit. But as it turned out, those materials were inadequate, Kelling claimed.

In addition, Epicor's platform couldn't handle Group Manufacturing's "Quote IT" function, and the vendor said it would cost between $16,000 and $24,000 in consulting services to add the capability, the lawsuit said.

Epicor wanted to charge another $32,000 for creating the ability to easily generate profit and loss statements for Group Manufacturing's three divisions, according to the lawsuit.

Group Manufacturing ultimately told Epicor in November that it wished to spike their agreement, according to the complaint. It is seeking a refund of its money as well as attorney's fees and any other damages the court deems necessary.

Epicor hadn't submitted a formal response to the lawsuit as of Tuesday. But in a Dec. 14 letter to Group Manufacturing's lawyer that was filed with the suit, Epicor's senior vice president and general counsel, John Ireland, called the company's allegations "completely baseless."

"The facts are quite the opposite," Ireland wrote. "There is not any significant disparity between what was demonstrated or represented to Group by Epicor and what has been delivered."

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