Could Legal Actions Change Systems Integrator Negotiations?

Loraine Lawson

Recently, the government of Marin County, Calif., sued Deloitte Consulting, claiming it committed fraud and "misrepresented its skills and experience" in an SAP implementation. Then this week, a UK court ruled that systems integrator EDS, now owned by HP, must pay 318 million (US$460.3 million) to settle a lawsuit over a failed CRM project.

 

Combine the two, and it could be bad news for systems integrators.

 

ZDNet's bloggers are all over these legal cases, and I've really enjoyed reading their posts. I particularly liked Dennis Howlett's Wednesday post, "Are class actions the cure for failure?" While Howlett thinks the ruling could have significant reach, I like this point:

Even when you take all this together and find, as this judge did, that EDS is on the hook for a significant sum, then it makes no real difference. If nobody in the media cares enough to ask the tough questions and customers continue to get sucked into agreements where the brand speaks louder than the realite, then vendors of all stripes will continue to get away with substandard work. Bringing attention to these cases is not enough. There has to be better analysis of failure causes that allows for learning.

Howlett goes on to wonder whether it might take class-action suits to create real change.

 

You should also check out Michael Krigsman's take on the Marin vs. Deloitte lawsuit and the EDS ruling. Krigsman blogs about IT project failures for ZDNet, and according to his bio is an expert in project failure, so he's more focused on the role all parties played in these cases. If you don't have time to read both posts, definitely check out the "My Take" section on the EDS post, because he offers specific caveats for dealing with systems integrators, vendors and consultants.

 


It'll be interesting to see how the Marin lawsuit against Deloitte plays out. While the EDS case is interesting, it was tried in the UK, which raises questions about whether it'll actually have an impact here in the United States. The Marin case, on the other hand, could make a huge impact, both in terms of demonstrating whether it's fruitful to sue over blotched systems integration projects and in terms of changing the unbalanced dynamic between less-experienced organizations and system integrators, not to mention vendors and consultants.



Add Comment      Leave a comment on this blog post
Jun 12, 2010 12:17 PM Dennis Howlett Dennis Howlett  says:

Thanks for the props Lorraine - much appreciated. You are right about it being tried in the UK but in reading the WHOLE of the judgment (yes - I nearly went blind) there are plenty of nuggets that US lawyers can usefully exploit. As you say - let's see what happens.

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