by Thomas Wailgum

Waste Management v. SAP: It’s Time to Trash This Lawsuit

Feb 25, 2010
Enterprise Applications

The monetary damages sought by Waste Management keep growing, but it's a zero-sum game being played.

Picture, in your mind, one of those fast-talking auctioneers. Be sure to include a Southern drawl. And, what the heck, add a cowboy hat to your visualization, too.

Got the image in your mind? Can you hear his voice? Good.

Now start imagining his rapid-fire verbal ascent, beginning with “$100 million.” And we’re off!

$200 million?! Higher!

When you’re at $350 million, take a brief pause and catch your breath, before going even higher to $400 million!

Now stop at $500 million. Wasn’t that exciting?!

Perhaps it’s just my warped sense of humor, but that’s what I keep hearing in my brain as I ponder Waste Management’s lawsuit against SAP, and the fact that the trash-disposal behemoth has continued to pursue the case and raise the damages sought since it first filed suit in the District Court of Harris County, Texas, in 2008.

The saga actually started three years earlier, in March 2005, with an RFP and ERP software demonstration. In court filings, Waste Management claimed the SAP product demo was “rigged” and “fake.” SAP countered that Waste Management knew what it was getting with the software and couldn’t keep up its end of the project implementation.

The “bidding” (a.k.a., damages sought by Waste Management) started at $100 million.Blame, acrimony and huge legal bills ensued.

At some point during the process, Waste Management said in a filing that damages had increased to $350 million. That probably was around the time in 2009 when Waste Management announced that its “first-quarter earnings dropped substantially in part due to its ‘abandonment’ of SAP software that it claims didn’t perform up to expectations,” reported the IDG News Service’s Chris Kanaracus, who’s been following the legal saga.

And now we’re up to $500 million in damages in 2010. Do I hear $750 million?!

What a waste. Of time. Of resources. Of money. Of talent.

Make no mistake: I’m not trying to “blame the victim” in this dispute. In most of these “he said-she said” cases of failed software implementations, the true fault lies with both parties.

What I’m pointing out is that the damage has already been done—extensive, lasting damage for everyone involved.

Now it’s time to abandon this destructive lawsuit, Waste Management, for the sake of your business, your customers, your employees and your new CIO.

What’s the end game, here? What’s going to be the return on your legal investment? Do you think you’re actually going to get all that money?

Of course, who am I to pass judgment on this legal case. I’m just an observer who’s spoken with many CIOs and IT leaders who almost universally recommend avoiding nasty, expensive and protracted lawsuits when it comes to dustups with software vendors. (See Why You Shouldn’t Sue Software Vendors–Even If They Deserve It for the discussion.)

Initiating a major lawsuit against a software vendor should almost never be “Option B” or “Option C.” More like “Option Z.”

As for the Waste Management execs, I wonder what they now think about that 18-month proposed ERP implementation, first considered back in 2005, and how ridiculously expensive it has gotten ever since they called in the lawyers.

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