IBM sued for fraud over botched software implementation

By Graeme Burton
12 Nov 2012 View Comments
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Computer giant IBM is being sued by chemicals company Avantor Performance Materials over a software project that, it claims, went wrong.

Avantor, which produces chemicals and raw materials for the pharmaceutical industry, as well as chemicals used in the electronics industry, is claiming fraud and breach of contract over the project.

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It claims that IBM misrepresented the capabilities of the application, which was designed to run on Avantor's SAP enterprise resource planning platform. It is seeking damages of "tens of millions of dollars", claiming that the implementation brought its operations to "a near standstill".

In a statement issued to the Reuters newswire, IBM did not reject Avantor's claims outright. "We believe the allegations in the complaint are exaggerated and misguided and are surprised that Avantor chose to file suit."

It added: "[IBM has] met its contractual obligations and delivered a solution that Avantor continued to use in its operations."

Avantor filed suit on Thursday in the US District Court for the District of New Jersey.

The legal action by Avantor mirrors a similar action brought by US pharmaceuticals distributor FoxMeyer in the mid-1990s after it botched an implementation of SAP's R/3 ERP system. The company blamed its subsequent failure on the disruption caused by the new software, raising questions over the fashion then for corporate ERP systems.

However, critics suggested that the botched software implementation also reflected some shortcomings in the company's leadership and management

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