Tuesday, November 20, 2012

IBM sued for fraud, breach of contract by US chemicals co

Avantor Performance Materials has filed a lawsuit against IBM for fraud and breach of contract over the implementation of a software project that resulted in a "disaster" for the chemicals manufacturer. 

The company, which produces chemicals and raw materials for pharmaceutical products, laboratory chemicals and chemicals used in the electronics industry, said in a statement that it was seeking tens of million in damages from IBM. 
According to the lawsuit filed on Thursday in the US District Court for the District of New Jersey, Avantor said IBM had misrepresented the capabilities of a software program that runs on a platform by SAP, resulting "in a near standstill" of Avantor's business. 

IBM, which partners with German business software maker SAP in its consulting business, was not immediately available for comment. 

Avantor in 2010 chose to replace its legacy information technology systems with a global SAP roll-out as part of a rebranding and growth strategy. 

Contrary to IBM's pre-contract representations, Avantor said the software program "was woefully unsuited to Avantor's business, and could not provide crucial functionality that Avantor needed to run its core business processes". 

Avantor also called IBM's consultants "incompetent and inexperienced". 

When the system went live, Avantor said it was a disaster due to a number of errors ranging from failure to track or process orders correctly to directing "that dangerous chemicals be stored in inappropriate locations". 

According to the lawsuit, IBM received around $13 million in fees and was asking for more to remedy the issues around the software implementation.

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