US waste management firm sues SAP over ‘failed system’

Waste Management says the failed system, which has cost more than $100 million (£50 million) since starting the project in 2005, has now been switched off – and is now demanding its money back. Its lawsuit, filed on 20 March in the district court of Harris County, Texas, follows a three-day mediation exercise that, it says, SAP ended after day two. Waste Management states that SAP falsely sold it a supposed ‘out-of-the-box’ solution, apparently adapted for US requirements and aimed at firms that transport waste and recycled materials. Says Lynn Brown, vice president corporate communications: “During the sales process, SAP conducted fraudulent demonstrations of its software. SAP also falsely cited that the software was ready for use in the US. Because the software was represented to require no modifications or enhancements, SAP promised that the software could be fully implemented throughout all of Waste Management within 18 months. “Waste Management has recently discovered that SAP’s pre-contract demonstrations utilised … fake software environments, even though these demonstrations were represented to be the actual software. These presentations directly attributed to Waste Management choosing SAP over several other qualified companies.” In a prepared statement, Waste Management says: “After Waste Management executed the software license agreement, SAP had to write new code and make extensive modifications to the software. Two years later, the software still didn’t work for one of Waste Management's smallest market areas. SAP promised experienced, personnel to implement the project, but Waste Management received a team that had never worked with the software before. “SAP then further perpetuated its original misrepresentations by convincing Waste Management to pay for the costs of fixing the software, while failing to disclose that the identified problems were inherent defects in the software itself. “After repeated delays and failures to fix the problems with the software, Waste Management made the decision to return to its old revenue management system, while SAP was to work on developing essentially new software that could work for all of Waste Management.” The company says it is seeking all costs incurred plus damages in the form of the savings and benefits SAP’s system was supposed to deliver. SAP policy is not to comment on legal proceedings.