Oracle extorted, lied and faked a demo to flog ERP – claim

Montclair State University claims that Oracle extorted, lied and ‘rigged’ demonstrations in a bit to sell an ERP product.

In court documents seen by IDG, new details have emerged in Montclair State University’s lawsuit against Oracle in connection with a troubled ERP project which implies that Oracle practically forced it to take the software.

Montclair’s amended complaint states that Oracle made an array of “intentionally false statements” regarding the functionality of its base ERP system, the amount of customisation that would be required, and the amount of “time, resources, and personnel that the University would have to devote.”

After Oracle missed a critical go-live deadline for the University’s finance system, the claim is it tried to extort millions of dollars from the University. It did this, it is alleged, by advising the University that it wouldn’t complete the implementation of the project unless it agreed to pay millions more than the fixed fee they both had previously agreed.

Oracle is refusing to comment but earlier this year it said that the university was to blame for the project’s woes.

Allegedly, MSU did not understand the technology and the steps necessary to complete the project. Instead of cooperating with Oracle, the company claims, MSU’s project leadership, motivated by “their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes.”

From the court documents it looks like MSU wanted to replace its legacy systems with a new one requiring minimal customisation. The school spent a year developing a detailed requirements list that ended up with 3,200 items which was given to vendors, including Oracle.

In January 2008, Oracle told the school that its base PeopleSoft system for higher education institutions would deal with 95 percent of MSU’s list.

According to the school this was complete rubbish.

Before it won the bid, Oracle also conducted live demonstrations of its software that used test scripts prepared by the university.

One demonstration involved “a robust online application process for Undergraduate and Graduate Admissions.” Oracle said that it was an existing part of the base system and satisfied the university’s requirements.

But actually, Oracle wanted to sell the university a third party product called ‘Embark’ to satisfy those requirements and tinkered with, or in the university’s words, rigged the ‘live’ demonstration. There was a lot of customisation was needed in the end, the university said.

Oracle told the university that the project could be done quickly through a method it had developed. Anyway, this project was the same as another one it was doing called the Lone Star College System.

But the university found out that the Lone Star project was four times greater than the personnel and resources available to the university to implement its ERP system.

Most of Oracle’s work, which cost $6 million, will have to be scrapped and the cost to finish the project will exceed Oracle’s original $15.75 million bid by up to $20 million, Montclair has said.

According to TechworldMSU would have been in big trouble if it had not made some smart moves to protect itself. These include a pile of documents detailing all conversations and interactions with Oracle. It had also worked out an escalation procedure in the event the project ran into problems and used real-life use cases for the demonstration.

It will now be up to the court to decide if Oracle is telling the truth.