ERP software disputes: common pitfalls

Multinational organisations spend significant money and resources on enterprise resource planning ("ERP") software, such as SAP or Oracle, which automates or streamlines processes in operations, finance and human resource departments. Although ERP software can be supplied off-the-shelf, most customers seek adaptations and some may commission a bespoke product.

The level of cooperation necessary between a customer and supplier to successfully develop and implement an ERP project is set out in Anglo Group Plc v Winther Browne & Co Ltd (2000) 72 ConLR 118, in which HHJ Toulmin QC held that the following terms are implied in a "standard" contract: (a) the purchaser communicates clearly their needs to the supplier; (b) the supplier discloses whether or not those needs can be met; (c) the supplier takes reasonable steps to ensure that the purchaser is trained to use the system; and (d) the purchaser devotes reasonable time to understanding how to operate the system.

The substantial cooperation necessary to implement ERP software makes it ripe for disputes. It is no wonder that C-suite executives nervously pore over their ERP contracts. This article discusses common pitfalls to watch out for.

You can read Karishma Vora's full post on our Commercial, Construction & International Arbitration Blog here.