Aussie reseller sued over botched SAP install

By Allie Coyne on Nov 19, 2012 7:00 AM
Filed under Software

Updated: Unpaid bill.

Australian IT services reseller Computer Networks has been hit with a lawsuit by a customer unhappy with an SAP system implementation in its chain of retail outlets. 

The suit was in response to a statutory demand issued by the reseller in August this year, to mobile phone accessories retailer Platinum Communications for failure to pay a bill for the installation of SAP's Business ByDesign across its 28 retail outlets. 

It appointed Computer Networks in March. Platinum previously used software from Pronto to power its retail operations. 

The retailer entered an agreement with Computer Networks to implement and maintain the hosted SAP software, for an annual license fee, from July 1, 2012.

Under the contract, Computer Networks was to provide consultancy services during execution and solution expansion phases of work, at a cost of $1000 a day.

The entire bill came to approximately $103,000, made up of around $85,000 in implementation costs and $15,000 in licensing fees.

Once the SAP solution was switched on, Platinum claimed its stores experienced "serious problems", with an undisclosed number of staff unable to log in, print receipts, open cash registers, complete returns and enter stock levels. 

The SAP software remained in operation until July 20, when Platinum decided to terminate the contract and switch back to Pronto.

Platinum alleged it incurred losses in excess of $400,000 during July as a result of the "failed installation of the system".

It filed Federal Court proceedings in October to have the $103,000 bill for works sought by Computer Networks set aside.

Computer Networks had earlier offered to reduce the sum of the implementation aspect of the bill by 20 percent, but the offer was rejected.

Justice John Edward Griffiths ruled the $103,000 could be set aside, on condition that Platinum file separate Federal Court proceedings against Computer Networks over the losses it claims to have incurred from the project.

The Federal Court would then test the merits of the $400,000 cross-claim.

Justice Griffiths said the proceedings had to be filed no later than 7 December 2012, and also sought written assurance that Platinum would "diligently prosecute those proceedings".

Computer Networks was ordered to pay court costs. It declined to comment to CRN.

Computer Networks is headquartered in North Ryde, NSW, and has five offices around Australia. It deals predominantly with small and medium enterprises, and in 2010 became the first SAP hosting certified partner in the country. 

Platinum Communications has been in operation since 2003 and carries a range of devices and accessories from Apple, Nokia, Blackberry, Sony and HTC, among others. The retailer did not respond to request for comment by the time of publication. 

Updated: 11:40am to include information around the statutory demand.

 
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