Untited States / Germany | The United States’ largest garbage hauler is suing German software provider SAP, claiming the waste-and-recycling software package it bought was simply not ready for prime time, calling it ‘a complete failure.’ Waste Management of Houston, alleges SAP sold it revenue-management software that was inadequate and untested, accusing it of fraud and false representations.
Waste Management is seeking to recover more than US$100 million in expenses, plus unspecified punitive damages. SAP spokesperson Andy Kendzie declines to comment, saying: ‘As a matter of policy, SAP does not comment on litigation.’ SAP is the world's largest business-software company. Its Americas division employs more than 2,000 in Delaware County. Waste Management, the biggest U.S. trash hauler, has more than 22 million commercial and residential customers.
In 2005, Waste Management was looking for new revenue-management software to handle such tasks as billing, collections, pricing and new-customer setup, the lawsuit said. SAP said its waste-and-recycling software was a "tested, proven, out-of-the-box solution" that could be rapidly implemented without need for any customization, the suit said.
These representations were false because a ‘US version’ of the software had never been tested at a US company, according to the court filing. Before 2005, it said, the software had been licensed to ‘a limited number’ of small European firms. SAP purported the software would save ‘hundreds of millions of dollars in increased efficiencies and revenue,’ the suit says.
Instead, it was ‘nothing more than beta software - software still in development and utterly incapable of running the operations of an American waste and recycling company,’ it said. Waste Management says SAP presented "fake mock-up simulations," although the demonstrations were represented to be the actual software.
Waste Management says senior SAP executives, including SAP America president and chief executive officer Bill McDermott, participated in the "rigged and manipulated" demonstrations. ‘These fake product demonstrations occurred at numerous locations and on many occasions during an eight-month time period in 2005,’ court papers say. Waste Management says in a company statement that it filed suit March 20 ‘after months of discussions with SAP and a recent consensual, three-day mediation that SAP ended after day two.’
Waste Management signed a licensing pact with SAP on Oct. 3, 2005. ‘Almost immediately the SAP implementation team discovered significant 'gaps' between the software's actual functionality and Waste Management's business requirements,’ the complaint says. In addition, the suit alleges, SAP originally promised that a pilot phase in New Mexico would be running by Dec. 15, 2006, but ‘it is not even close to being completed today.’
