Bridgestone seeking $600m for ‘chaos’ from IBM system
In a filing submitted with a US court, Bridgestone Americas has described the implementation of a new companywide computer system as bringing chaos to the tyre maker. It is now seeking US$600 million in actual and punitive damages from the computer system’s supplier, IBM.
The tyre maker alleges in the 63-page complaint given to the US District Court in Nashville, Tennessee on 12 November that the integrated SAP OTC (order to cash) system it received from IBM for more than $74 million “was not as represented and quickly began damaging the customer relations it was intended to improve.”
Bridgestone Americas (BSAM) says IBM’s system “lost or deleted scheduled customer orders, would not process orders, duplicated, or partially processed orders and, for those limited orders that were processed, did not complete critical corresponding business applications.” And due to the “magnitude of the failures in the IBM solution and IBM’s inability to provide services it contracted to provide”, the tyre maker says it was compelled to hire SAP directly for the first six months of 2012 after go-live to identify and resolve, or partially resolve, defects in IBM’s SAP implementation in order to allow the new IBM SAP OTC system to receive and deliver some orders.
“The overwhelming number of major and minor defects in IBM’s design solution as implemented by IBM threw BSAM’s North American tyre operations and its retail operations into chaos,” states the document. “BSAM had to turn off or disconnect automated systems. BSAM’s entire organisation had to go into manual disaster recovery, with everyone, including management, working day and night to find creative ways to deliver products critical to their customers’ businesses. BSAM delivered tyres to manufacturers without any purchase orders to keep customers’ production lines running and to mitigate damages. As time progressed, it became apparent that IBM could not stabilise the implementation of its own solution design and the stabilisation efforts continued through the first six months of 2012. As a result, BSAM suffered tens of millions of dollars in direct costs.” The tyre maker estimates that as a total direct and proximate result of “IBM’s breaches” it has suffered damages in excess of $200 million, and continues to suffer damages from injury to its reputation and customer relations.
Bridgestone Americas also alleges that subsequent investigations “revealed some of the material facts IBM misrepresented and/or wrongfully and intentionally concealed from BSAM.” These include that the IBM SAP OTC “solution design” was not for the “next generation” but an outdated system, that IBM had provided a “non-standard” and unsuitable SAP OTC solution for BSAM’s applications, and that for the BSAM project IBM assigned and billed IBM personnel who lacked the represented expertise, experience and qualifications in key positions and skills solely within IBM’s responsibility.
BSAM didn’t meet critical commitments – IBM
IBM is ready to meet Bridgestone’s accusation head on. In a statement responding to Bridgestone Americas’ filing, the system supplier writes that “the claims against IBM are exaggerated, factually wrong and without merit.
“From the outset of this project, Bridgestone failed to meet critical commitments upon which IBM’s performance depended,” the statement continues. “Ultimately, Bridgestone’s repeated failures had a significant impact on the project’s cost and schedule, and its decision to ignore IBM’s warnings and prematurely roll-out the implementation across its entire business negatively impacted its North America operations. Bridgestone has elected to bring this matter to court. IBM worked hard to make this a successful project and regrets a dispute with a client. However, IBM is prepared to vigorously defend itself in this matter and demonstrate that Bridgestone’s own errors made this a troubled project.”