Electricity and gas utility major National Grid has accused India’s Wipro of botching the implementation of a software system for its back-office operations, resulting in “crippling” problems after the system went live.
Wipro was allegedly paid more than $140 million for its work on the project, which upgraded the back-office computer systems that run National Grid’s finance, payroll, and supply chain and procurement operations. The new computer platform was to run on SAP enterprise resource planning software, replacing legacy Oracle systems.
But in a lawsuit filed in New York, National Grid said Wipro’s work was “marred by significant performance failures through every project phase” and it ultimately delivered a system that was “of virtually no value to National Grid.”
The suit seeks to recover what National Grid paid India’s third largest software exporter plus “hundreds of millions of dollars” in fees it paid other vendors for stabilization and remediation work.
Wipro responded that the allegations are “baseless” and it will “vigorously contest the allegations in court.”
“Wipro provided valuable services with skill and care,” the company said in a regulatory filing, adding that National Grid gave it “many positive evaluations.”
National Grid’s system upgrade was initially estimated to cost about $383.8 million, with Wipro joining the project in 2010 as one of the major vendors.
Contrary to its representation that “it had ‘long-running partnerships with … 20 of the top 50 investor-owned utilities in North America,’ [Wipro] in fact had virtually no experience implementing an SAP platform for a U.S.-regulated utility,” National Grid alleged in its suit.
Wipro’s programming errors led to “crippling post-go-live problems,” the suit said, including defects in the payroll system that left National Grid unable to pay its employees accurately or timely.
According to an audit report released in 2014, the cost of the software overhaul was expected to rise to nearly $1 billion through National Grid’s fiscal 2015. National Grid “did not use vendors with a strong track record of U.S. utility industry experience in SAP platform implementation,” the report said.