|By PR Newswire||
|January 2, 2013 04:51 PM EST||
GREENVILLE, S.C., Jan. 2, 2013 /PRNewswire/ -- Avanade, Inc., a joint venture between Accenture (NYSE: ACN) and Microsoft (NASDAQ: MSFT), has been sued by ScanSource, Inc. (NASDAQ: SCSC) for what ScanSource calls a "bait-and-switch," after ScanSource saw Avanade's initial estimate for the installation of enterprise resource planning (ERP) software system Microsoft Dynamics AX balloon from $17 million to nearly $66 million and from 11 months to three years, with the ERP system still not live. ScanSource's project is believed to be one of the largest global enterprise level Microsoft Dynamics AX implementations to date.
ScanSource contracted with Avanade in 2009 to replace its aging information technology infrastructure with a new core system that would support ScanSource's continued global expansion. Avanade's implementation was originally scheduled to be completed within 11 months.
The lawsuit, which was filed in U.S. District Court in Atlanta, alleges - among other things - fraud, tortious misrepresentation and breach of contract, and seeks tens of millions of dollars in damages that ScanSource has incurred and will continue to incur, as a result of Avanade's misconduct.
The lawsuit alleges that Avanade knew it was not capable of performing the Microsoft AX implementation for ScanSource, and misrepresented its skills and abilities to land the lucrative engagement. The suit also states that Avanade engaged in "bait-and-switch" sales tactics that defrauded ScanSource into believing that Avanade had, and would assign, highly-skilled consultants to perform the implementation. Instead, as the lawsuit alleges, Avanade provided ScanSource with a revolving door of consultants who knew little or nothing about implementing Microsoft Dynamics AX software or managing large-scale global ERP projects. The result was an incomplete and defectively designed system that suffered from numerous flaws and required extensive remedial work. Avanade's incompetence was reflected in, among other things, the staggering 500,000 lines of software code it wrote in an attempt to have the Microsoft Dynamics AX platform meet ScanSource's business requirements.
According to the lawsuit, "As a result of Avanade's fraud and breaches, an implementation that was initially budgeted for $17 million has now cost ScanSource approximately $37 million - and is estimated by Accenture, Avanade's parent entity, to require an additional $29 million to complete. This ballooning of the Project cost estimate from $17 million to approximately $66 million represents an almost 300% price increase for delivery of the global ERP implementation that is years behind the originally scheduled initial go live..."
The suit also states, "Avanade's inability to accurately estimate the effort required for the implementation caused ScanSource to de-scope some of its Minimum Business Requirements in an attempt to reduce the Project's escalating cost and keep the scheduled go-live dates intact. As a result of this de-scoping exercise, ScanSource had to retain some of its legacy applications to perform certain processes that the new Microsoft AX system was supposed to handle. For other de-scoped functionality, ScanSource was required to write its own applications to fill the gaps."
"By forcing ScanSource to de-scope functionality, Avanade performed a classic bait-and-switch on ScanSource. Specifically, after being engaged on the Project for only a few months, Avanade drastically increased its fees estimate, thereby forcing ScanSource to make the following choice: either pay substantially more for functionality that Avanade was supposed to deliver as part of the initial quote, or forego that functionality to reduce a ballooning budget far in excess of what Avanade had represented and agreed to."
The lawsuit continues, "At regular intervals throughout the Project, Microsoft and Accenture performed quality assessments of the Project (the 'QA Reports'). Both Microsoft and Accenture concluded that the Project was being mismanaged and made recommendations, including the preparation of an integrated project plan, to stabilize the Project and get it back on a track toward go-live."
"The Microsoft quality assessment, which focused primarily on software development, documented hundreds of 'Issues' with the Avanade-developed code. Many of these problems were characterized as 'Must Fix Issues.' Microsoft further criticized the manner by which Avanade altered the core Microsoft AX code, noting that 'even single methods have multiple developers' and that '[v]ery commonly, base classes, forms and tables have been modified,' increasing the costs of future upgrades" and maintainability of the system.
"Among other criticisms of the Project, the Accenture quality assessment noted that the Project could not be completed without additional fees of $22.5 to $29 million, and resource commitments totaling 11,504 workdays."
"Following receipt of the QA Reports, ScanSource delivered a Notice of Default to Avanade on May 17, 2012. Despite providing an extended cure period, Avanade has failed to correct its breaches of the Implementation Agreement. When it became evident to ScanSource that Avanade had no intention of curing its defaults, on September 28, 2012, ScanSource provided Avanade with a Notice of Termination removing Avanade from the Project."
"The Notice of Termination followed repeated failures by Avanade to meet multiple scheduled and rescheduled go-live dates, and the realization that the Project -- still without a projected go-live date, and now estimated to cost at least three times Avanade's original estimate -- could not continue with Avanade as integrator."
ScanSource has contracted with a new global implementation partner to mitigate the damages and harm caused from Avanade's misconduct. ScanSource plans on completing its new Microsoft Dynamics global ERP project. Excluding any potential recovery from this lawsuit, ScanSource believes that the total spend for the ERP project could range from $58 million to $72 million and extend past fiscal year 2013, as stated in its prior 10-Q filing for the period ending September 30, 2012.
ScanSource is being represented by Mark P. Ressler of Kasowitz, Benson, Torres & Friedman LLP.
About ScanSource, Inc.
ScanSource, Inc. (NASDAQ: SCSC) is the leading international distributor of specialty technology products, operating from dedicated business units in North America, Latin America and Europe. ScanSource POS & Barcoding delivers AIDC (automatic identification and data capture) and POS (point-of-sale) solutions; Catalyst Telecom and ScanSource Communications provide voice, video, data and converged communications equipment; ScanSource Security offers physical security solutions; and ScanSource Services Group delivers value-added support programs and services. Founded in 1992, the company ranks #760 on the Fortune 1000. For more information, call the toll-free sales telephone number at 800.944.2432 or visit www.scansourceinc.com.
SOURCE ScanSource, Inc.
Big Data engines are powering a lot of service businesses right now. Data is collected from users from wearable technologies, web behaviors, purchase behavior as well as several arbitrary data points we’d never think of. The demand for faster and bigger engines to crunch and serve up the data to services is growing exponentially. You see a LOT of correlation between “Cloud” and “Big Data” but on Big Data and “Hybrid,” where hybrid hosting is the sanest approach to the Big Data Infrastructure pro...
Jul. 24, 2016 07:45 PM EDT Reads: 1,842
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 24, 2016 07:30 PM EDT Reads: 2,045
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., and Logan Best, Infrastructure & Network Engineer at Webair, focused on real world deployments of DDoS mitigation strategies in every layer of the network. He gave an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He also outlined what we have found in our experience managing and running thousands of Linux and Unix ...
Jul. 24, 2016 07:30 PM EDT Reads: 1,704
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
Jul. 24, 2016 07:30 PM EDT Reads: 1,684
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
Jul. 24, 2016 07:15 PM EDT Reads: 1,852
With 15% of enterprises adopting a hybrid IT strategy, you need to set a plan to integrate hybrid cloud throughout your infrastructure. In his session at 18th Cloud Expo, Steven Dreher, Director of Solutions Architecture at Green House Data, discussed how to plan for shifting resource requirements, overcome challenges, and implement hybrid IT alongside your existing data center assets. Highlights included anticipating workload, cost and resource calculations, integrating services on both sides...
Jul. 24, 2016 07:00 PM EDT Reads: 1,924
In his session at @DevOpsSummit at 19th Cloud Expo, Yoseph Reuveni, Director of Software Engineering at Jet.com, will discuss Jet.com's journey into containerizing Microsoft-based technologies like C# and F# into Docker. He will talk about lessons learned and challenges faced, the Mono framework tryout and how they deployed everything into Azure cloud. Yoseph Reuveni is a technology leader with unique experience developing and running high throughput (over 1M tps) distributed systems with extre...
Jul. 24, 2016 06:45 PM EDT Reads: 2,029
"We are a well-established player in the application life cycle management market and we also have a very strong version control product," stated Flint Brenton, CEO of CollabNet,, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 24, 2016 06:45 PM EDT Reads: 1,752
"Software-defined storage is a big problem in this industry because so many people have different definitions as they see fit to use it," stated Peter McCallum, VP of Datacenter Solutions at FalconStor Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 24, 2016 06:15 PM EDT Reads: 1,375
The cloud competition for database hosts is fierce. How do you evaluate a cloud provider for your database platform? In his session at 18th Cloud Expo, Chris Presley, a Solutions Architect at Pythian, gave users a checklist of considerations when choosing a provider. Chris Presley is a Solutions Architect at Pythian. He loves order – making him a premier Microsoft SQL Server expert. Not only has he programmed and administered SQL Server, but he has also shared his expertise and passion with b...
Jul. 24, 2016 06:00 PM EDT Reads: 1,849
"Operations is sort of the maturation of cloud utilization and the move to the cloud," explained Steve Anderson, Product Manager for BMC’s Cloud Lifecycle Management, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 24, 2016 06:00 PM EDT Reads: 1,835
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
Jul. 24, 2016 05:00 PM EDT Reads: 2,020
Unless your company can spend a lot of money on new technology, re-engineering your environment and hiring a comprehensive cybersecurity team, you will most likely move to the cloud or seek external service partnerships. In his session at 18th Cloud Expo, Darren Guccione, CEO of Keeper Security, revealed what you need to know when it comes to encryption in the cloud.
Jul. 24, 2016 05:00 PM EDT Reads: 2,348
What are the successful IoT innovations from emerging markets? What are the unique challenges and opportunities from these markets? How did the constraints in connectivity among others lead to groundbreaking insights? In her session at @ThingsExpo, Carmen Feliciano, a Principal at AMDG, will answer all these questions and share how you can apply IoT best practices and frameworks from the emerging markets to your own business.
Jul. 24, 2016 04:15 PM EDT Reads: 1,542
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
Jul. 24, 2016 03:45 PM EDT Reads: 1,723