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The PeopleSoft Touch 

Software Hard Times

Wednesday, Nov 22 2000
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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