JDE faces music for past failures

Eight US companies that bought early versions of JD Edwards' OneWorld have filed arbitration claims against the vendor, but JDE NZ is confident no similar claims will be brought here, despite Computerworld finding that some early users found serious fault with the software.

While eight US companies that bought early versions of JD Edwards' OneWorld have filed arbitration claims against the vendor, JDE New Zealand head John Speed is confident no similar claims will be brought here.

That's despite Computerworld confirming that some early users in this country found serious fault with the software. One abandoned it but another stuck with the ERP suite, recently upgrading to the latest version.

Three of the US users, who filed for arbitration between November last year and February, claim that the OneWorld suite has been so troublesome and bug-ridden that their installations are in limbo. The companies say they have yet to decide whether to stay with JDE or switch to another vendor.

Last year Texas-based Doskocil Manufacturing was awarded $US2.3 million in damages by an American Arbitration Association panel. Denver-based JD Edwards, which contractually requires users to seek arbitration when legal disputes arise, said it had settled one of the earlier cases, but wouldn’t disclose details.

Speed dismisses the possibility of similar cases in New Zealand and answered "No" when asked if any early local OneWorld customers were unhappy with their implementations.

However, in June 2000 liquor merchant Glengarry Wines (then Glengarry Hancocks) dropped JDE after 18 months because of major problems with the ERP software.

Glengarry Wines chairman Jak Jakicevich wouldn’t comment on the matter when approached by Computerworld, saying talking about JDE would make him liable with the vendor.

But in a reference letter dated July 2000 on the website of exo-net -- Glengarry's replacement ERP software supplier -- Jakicevich describes how the computer system it had implemented in March 1999 failed to provide the basic tools to run the business and threatened its viability.

"This failed system has cost the business big time in many ways. These costs were made up from the actual purchase -- licence fees, software, hardware -- implementation, consultants and the huge number of temporary staff required to keep the company going.

"The system failure has also caused us grief in collections and also GP [gross profit] losses, as we had no visibility of what was happening. We were sailing without a compass."

An ex-employee of the company who used the system said it often left staff in tears and said it was a wonder Glengarry didn't lose most of its customers. Staff weren't able to see what was in stock and the invoicing system didn't work, according to the former insider.

JDE's Speed told Computerworld he didn't know about Glengarry's experience because it happened before his time.

Another company which stopped using JDE's OneWorld was Auckland-based Blue Star Office Products.

It was acquired by Idaho-based Boise Cascade in September 2000 and ceased using the software about a year ago.

Boise's New Zealand IT manager, Peter Gardner, denies that the JDE implementation failed, saying it was dropped because the New Zealand company was required to switch to the same ERP system as its Australian office. He referred Computerworld to Australia for further comment.

Mark Kowitz, IT manager for the Australian office of Boise Office Solutions, says JDE would have "very little chance of getting back into the company".

Melbourne-based Kowitz says the JDE implementation in New Zealand had been so heavily customised that it had become unwieldy to maintain. There were also constant problems which ceased when the switch was made to Pronto, an ERP package from Australian company Pronto Software, he says.

Wine supplier Negociants had "issues" with its early OneWorld implementation but they have been resolved and the company recently upgraded to the latest version of OneWorld XE.

Graeme Baker, IS software manager at Negociants’ Australian parent company, S Smith & Son, says "if you talk to a lot of people with earlier implementations they had some problems".

Negociants’ problems were related to issues of setting up and moving data across from the legacy system, staff training difficulties and the fact the software was very new.

However, Baker says JDE gave "perfect support" and the company is now happy with the system.

"Going to big ERP systems is always a large step. Everybody takes it a bit too lightly."

That's also the experience of MidCentral District Health Board. IS manager Chris Dever says ERP system users should not underestimate the cost and complexity of changing operations.

The health board spent more than $1 million switching from SSA BPCS to JDE financials and Dever says it came as a shock to him how expensive the new system was to maintain.

He says the system runs "adequately" from a technology perspective.

Whatever problems early adopters of OneWorld may have faced, the software is now as stable as any other ERP system on the market, says Joshua Greenbaum, an analyst at Enterprise Applications Consulting in California.

But the fallout from early OneWorld rollouts continues. Sprague Energy, an energy products distributor in New Hampshire, says in an arbitration document obtained by Computerworld US, that it suffered more than $US10 million in damages because of problems with OneWorld’s stability and the cost and length of the implementation.

Sprague began installing billing, finance and other OneWorld applications in 2000 before switching to JDE's web-based OneWorld XE software a year later. But after working with the project for more than two years, Spraque was only able to bring OneWorld XE partially online by the end of last year, the company says in its filing.

Sprague vice-president of law Paul Scoff declined to comment further on the problems but says that portions of the ERP system that Sprague is using had to be heavily customised to make them work.

The Flextallic Group, a maker of industrial gaskets in Houston, spent more than $US3.7 million on a OneWorld project and was "almost brought to its knees because of promises made and not kept" by JDE, says CEO Ray LeSage.

According to arbitration documents in that case, Flexitallic bought OneWorld in 1998 but found that the suite "could not operate as a fully integrated system". That and other problems prevented the company rolling out the software across its operations, the filing says.

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