The backstory: a lawsuit filed in 2008 by Alabama pet food maker Sunshine Mills over a Ross Systems ERP implementation.
Fast-forward to December 3, 2010, when an Alabama jury awarded Sunshine Mills $61 million (USD) in damages ($45 million of which were punitive).
From CIO.com’s article about the verdict, quoting Sunshine Mills attorney Daniel McDowell:
Ross Systems handled the training of Sunshine workers on the system, he said. In an internal e-mail, one Ross employee called Sunshine workers “clueless fools” who were unable to learn how to use it.
Ross Systems officials allegedly made fun of Sunshine Mills employees behind their backs, at times calling them incompetent and clueless fools in e-mails sent within Ross Systems.
Incompetent and clueless, eh?
What the Hell Happened Here?
Let’s just simmer down and listen to what Ross Systems had to say in a press release issued after the verdict:
The jury reached this result despite the fact that:
- Sunshine Mills acquired the Ross ERP beta system in 2005 and used the product for years before filing a lawsuit;
- The Ross ERP system continues to be used by Sunshine Mills to this day;
- Sunshine Mills has recently purchased services from Ross Systems to help them in their operations; and
- The software at issue is being used successfully by many of Ross’ national and global customers, and has been for years.
I’m presenting Ross Systems’ side of the story because I don’t want to argue the merits or demerits of the suit itself.
My point, however, is that from the sidelines, perspective is rapidly getting lost in the bafflegab of lawyers and marketing departments.
For instance, in a putatively unrelated press release, cheerily titled Ross Systems Closes More than Half a Million Dollar Sales Deal for Ross ERP (and bizarrely subtitled “Technology Association of Georgia Also Shows Support for Ross Systems over Recent Jury Verdict”), Ross Systems president Sherri Rodriguez is quoted as saying:
We also are very pleased by the tremendous show of support we have received from several of our customers and TAG since receiving this jury award. We are continuing to deliver the world-class products and services that our customers expect, as well as working with them to meet their business objectives. Our Ross support satisfaction rates continue to be very strong, with a very significant majority of customers giving us “satisfied” to “very satisfied” ratings in surveys from each of their incident reports.
In spite of the title of the press release, this is plainly not a press release about a new client, who is vaguely (and twice) identified only as a “leading food manufacturing company.”
The press release is 341 words long, and precisely 59 of those words are devoted to the customer acquisition. Indeed, the Cautionary Note Regarding Forward-Looking Statements that follows the press release is 369 words (!), and focuses its CYAttitude exclusively on the lawsuit.
It all looks like an exceedingly curious attempt to exercise some damage control. Ross Systems cites Tino Mantella, president of the Technology Association of Georgia (TAG), as saying:
TAG was disappointed with the jury’s ruling against Ross Systems. We believe that the growing number of excessive and unreasonable jury awards against companies in the technology industry will only make it more difficult to do business in the U.S., and stifle economic growth and job creation.
Hey, do you smell a veiled threat too? What utter nonsense, and a straw man fallacy to boot. You want economic growth? Then get your shit together, and stop, for example, calling customers clueless and incompetent fools. It is completely disingenuous to appeal a verdict in the forum of public opinion by arguing that said verdict is damaging to the economy.
But then again, I get the feeling that these press releases are targeting shareholders rather than public opinion, which is why they say nothing of substance.
This, in turn, leads me to believe that $61 million later, neither Ross Systems nor Sunshine Mills are entirely clear on how they got into this sorry mess in the first place.
Could This PR Disaster Have Been Averted?
It’s tempting to wave off this unfortunate public relations disaster as simply a manifestation of a certain arrogance in dev culture, or perhaps sheer blindness when it comes to usability issues.
Also, software developers are not famous for being humble, or for being experts on usability. And also, well, newsflash: sometimes people just hate people, and in particular, sometimes people hate customers.
I’ll bet this mudslinging could have been avoided, though. It’s all extremely reminiscent of what happens when three critical components go MIA during the software implementation process:
How to Avoid the Lawyers (And the Insults)—Or: How to Select an ERP Partnership that Works the Way You Expect It To
Elsewhere on the TEC site, I’ve gone on at length about the elements of successful software selection, so I’ll just present the essential points here.
The three main phases of successful software selection (four phases if you include post-selection, which you should):
The initial research phase consists of preliminary study and defining your organizational strategy and tactics. Organizations at this stage should begin to understand what their overall strategy is regarding the software they are looking to implement.
In addition, they need to know both their short- and long-term objectives and constraints with respect to their business processes. During this phase, it’s also important for you to review systems currently in place in order to gauge whether it’s worth upgrading your current software, as opposed to acquiring an entirely new system.
Once you have a basic grasp of the different functional requirements for the software, you can begin to evaluate software vendors and put together a short list of products for further in-depth analysis. [Use TEC Advisor for this.]
You benefit from enterprise software only when you make the right selection. Determining accurate and relevant criteria on enterprise software functionality helps you become better informed of your options. Using proper analysis, your selection team can make accurate assessments about how well a vendor can meet your needs, which should ensure that you select the most appropriate enterprise software.
Some of the important steps in this phase:
- creating scripted scenarios based on your most important business requirements
- issuing a request for proposal (RFP) (including costing information)
- inviting vendors for a site visit
- conducting vendor demos and proof of concept
- evaluating vendors’ implementation strategies
- conducting a total cost of ownership (TCO) analysis
- identifying the best-fit solution
- developing a selection auditing and reporting mechanism
- obtaining executive approval
- performing reference checks
- negotiating the contract
Because implementation is such a complex process, you may find that you and the implementing party have different perspectives on many implementation issues. You may also find it a challenge to execute the implementation on time and within budget.
Important steps involved in post-selection:
- auditing each implementation milestone
- coordinating the resources necessary for keeping the project on track
- auditing the progress of implementation against products and services promised
- negotiating additional costs associated with increase in the scope of projects
- monitoring the implementation process
- briefing the stakeholders from an independent perspective on the progress of the implementation
In the case of Ross Systems and Sunshine Mills, it sounds like the wheels started to fall off the wagon during phases three and phase four.
What do you think? Comments? Questions? Assertions? Leave ‘em below.
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I have actually been in a similar position. Customers ARE sometimes fickle and especially if there is political in-fighting, it becomes impossible for the vendor to get a proper sign off. For example, I was in a POC where the COO wanted us to to revamp the tracking and queueing system but the IT department was not aligned with the Operations department and would be eventually be responsible for the upkeep of the system.
The IT department threw every possible obstacle our way till eventually I just got sick of it and told the COO to get his people together on the same page before he approached anyone else, because I sure was not interested in that particular bit of business!
Like it or not, there ARE times when you just cannot win because you still lose at the end, and it is better to walk away from potentially toxic customers than to win pyrrhic victories.
I could relate the ross side of the story to my own where-in we had started training from giving the client’s team computer games to develop mouse orientation, ERP is far away to “go live”.
I do see that the the longevity of the assignment is terrible and is difficult to differentiate between employment and consulting work at the client site.
Too late to comment but the project should have been objective and focussed on the implementation from Ross side. it is difficult to anticipate the capabilities of the users at client side. calling them names is a blunder and digging ones own grave.
Probably this is commom for solution implementors to come accross such sitations or rather deadlock situations where users are totally not aware of the Computer based systems, the integrations etc. I had similar situation where all else failed and even the matter reached to the board members of the group and the particular Business units Finance Manager (leading project from user side) was asked to leave even after 22years of service. Same Groups other setup also behaved such but recently I paid visit to them after 7 years of implementation, it was a surprise to see that where every day every topic we were arguing, almost top to bottom all team members received me smilingly and accepted their ignorance to the technology and appologised for the hard time they gave to me and my team members. But above all everyone deserves respect and no professional can use odd words for others and may be the court decision is just because of these words, but there should have been some compensation to the Ross team for the hard time they faced with the customer. “PROBABLY A LESSON EVERY STEP MUST BE TAKEN IN A LEGAL MANNER AND WITH TIMELY ALRMS, FRUSTRATION MUST BE DRAINED BUT THROUGH LEGAL/ETHICAL CHANNELS”. My sympathies with Ross Team membrs.
Software firms also have to evaluate customers. In the zeal to achieve sales performance targets, companies spend no time thinking about the customer and their readiness for these types of projects.
Several other high profile law suites such as with i2 and others can often be traced tack to risky customers!
Was the sale worth it?
Our company has experienced silimilar cases in the past 25 years.Althbough we get sign off on a weekly basis we have erred by trying to accomodate all the client department interests when they were at times in conflict with each other;in fact we became arbitrators.We have since learned that the best approach was to cease the implementation until a revised signed project plan was in place.
Although we have only had one lawsuit filed(which we won)we are now in litigation because the CEO had buyers remorse after software was installed,project plan signed off and training was 50% complete.The CEO is trying to sue our firm stating that the software he purchased(which is used by thousands of end users) does not work.
Lack of focus on implementation could be a root cause of the problem here. Lack of humility and sensitivity toward usability would certainly contribute as well. But I have a feeling the jury was primarily focused on the insolent emails that evidenced the overall attitude toward the client. Clients frequently become barriers to success that have to be overcome but the bottom line is: maintain a god attitude toward the client and above all watch what you say in emails.
I was involved in an implementation where a lawsuit was used as a threat. The CFO began realizing during the selection phase that the accounting department would be reduced significantly due to the efficiencies in current systems and the elimination of the current manual processes. The effect on accounting department was so signifcant the CFO felt threatened by the loss of power in terms of the reduction of staff. The CFO and accounting department began sabotoging the project and blaming myself and the consulting firm for the problems. I was terrified but proper documentation and a good relationship with the CEO and others prevented a disaster.
I agree with many of your points.
Both parties have to take the approach of former US President Ronald Reagan i.e., trust but verify. Often times (in my limited 3 decades of performing ERP Implementations), the client does not often have the project management skill sets and abdicates responsibilities for that process. The client has to remember caveat emptor!
On the other side of coin, the vendor must realize they are working with a client that may not have the proper project management skill set. They must act to define the expectation appropriately, act accordingly and go out of their way and properly manage the client.
I’ve been through countless projects like this one. Most of the mistakes are made right up front in not tying down the details of how/what is to be delivered, who’s responsible for what, etc. 100% of the projects starting without a properly prepared/approved project charter nailing down these details will miss expectations and potentially end up like this one in court.
But on a diffrerent matter, has anyone else run across the 20-year clause in the Ross license agreement? I’ve been in the business for over 30 years and I’ve never seen a clause like that one.