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The PeopleSoft Touch 

Software Hard Times

Wednesday, Nov 22 2000
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If PeopleSoft has had its fair share of software snafus, it is far from alone in an industry that has been plagued by costly, high-profile installation problems:
  • A recent audit of the Philadelphia School District revealed that it had spent $36 million -- more than $20 million over its budget -- on an enterprise-resource planning system from American Management Systems Inc. Bob Butler, vice president of the AMS public-sector group, told the Web site eSchoolNews that the system did not cost more than comparable projects, and that he didn't think the report "presents any surprises."
  • Glitches in its $112 million ERP system crippled chocolate-maker Hershey Foods during the 1999 Halloween shopping season. Hershey told the Wall Street Journal that glitches with its SAP software led to a 12 percent drop in third-quarter sales over Q3 of the previous year.
  • Others that have struggled to install a variety of brands of ERP software include the NASDAQ stock market, Intel, Procter & Gamble, Whirlpool, and a long list of state agencies.

The ERP industry's underlying problem, one expert says, relates to a gap between what is implied in software sales pitches, and what is written in contracts. Vendors often sell clients on a degree of functionality that the software ideally can -- but typically doesn't -- achieve.

"They sell you on a completed house, you know, with a nice lawn, planter boxes, and all that," says Joe Moriarty, of Claremont's Kerry Consulting Group, a firm that investigates technology purchases. "What they actually sell you is a tool set and a load of lumber.

"If it's not in your contract, it's not in your deal. A lot of people have learned that the hard way."

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Jeremy Mullman

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