Aussie SAP reseller settles with unhappy client

IT services reseller Computer Networks has reached an out of court settlement with a customer displeased with its installation of SAP’s Business ByDesign product.

The agreement ends a legal dispute that lasted several months. Mobile phone accessories retailer Platinum Communications filed a suit against Computer Networks in October 2012 in response to a statutory demand issued by the reseller in August 2012.

Platinum had failed to pay the $103,000 bill for Computer Network’s installation of SAP's cloud-based ERP system across its 28 retail outlets. 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 customer claimed it had incurred losses in excess of $400,000 when the system experienced “serious problems” for several weeks after it was switched on at the beginning of July. Platinum alleged its staff were unable to log in, print receipts, open cash registers, complete returns and enter stock levels once the SAP solution was turned on.

Business ByDesign continued to run until July 20, when Platinum decided to terminate the contract and switch back to using an ERP solution from SAP rival Pronto software.

In October, it filed Federal Court proceedings 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 in mid November 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 within two weeks. The Federal Court would then test the merits of the $400,000 cross-claim.

According to Computer Networks, Platinum then contacted the reseller to discuss an out of court settlement.

"In settling the dispute, Platinum Communications acknowledged that its decision to discontinue the implementation of the SAP Business By Design solution was not a result of the SAP solution being a poor fit for Platinum Communications’ business and also did not reflect negatively on the implementation capabilities of Computer Networks for the originally intended scope of works, which excluded retail point of sale capabilities," the reseller said in a statement.

"Both Platinum Communications and Computer Networks expressed satisfaction with the commercially agreed settlement."

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. 

The cloud-based ERP system was a key feature of SAP's push into the local SMB and mid-tier market, but the company revealed to CRN last year only 20 local customers had signed up to the software since its launch. At the time it denied the uptake was disappointing.

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.