Implementing a mission critical computer system has a significant impact upon a business organization. Successfully completing the process can be complicated and frustrating; as a result, it doesn't take a lot for the implementation to fail. Once an implementation fails, there is always enough blame to go around. The problem is that the business organization that undertook the implementation in the first place is stuck - stuck with the time, money and the inconvenience of not having the system they purchased. The company has not only left without the new system, they are back to using the systems that they originally thought sufficiently inadequate that they committed to spending the time and money for a new system. Successful litigation will help - but will not make them whole. But worse, a failed litigation only compounds the problem. Preparing the strategy for litigating a failed implementation takes time and thought. This article will take the reader through the development and implement of a litigation strategy that worked and discuss why it worked.

The Background - What Happened

A national third-party logistics company contracted with a general contractor to design and implement an automated warehousing system for the logistic company's distribution centers. The contract encompassed selecting and implementing a large-scale computer network that was to be "cloud based", automated conveyor systems to move product from pickup to transportation sites and software to manage the whole system. The general contractor's responsibilities were to oversee the design and implementation of the whole system.

As usual the project started with high expectations. However, as the implementation tried to progress significant problems developed that didn't solve the first problems and compounded the implementation process beyond the ability of the logistics company, the general contractor or any of the subcontractors to control the implementation. On top of this and because of the problems with the system, the logistics company was experiencing significant problems with a key customer to the point that the customer relationships were in danger. And... as expected, each of the players (the general contractor, the software developer and the engineering subcontractors blamed each other and the logistics company). And each company had considerable payments on the table. The owner of the logistics company needed some independent and objective advice on how to proceed.

Based on my extensive experience in these situations, I was hired to provide that objective and independent advice. I spent two weeks analyzing the situation and concluded that there were many clear design flaws that could not be circumvented and that the implementation was not able to be completed as initially started. In effect, the implementation had to be restarted from scratch. Immediately the vendors took the position that the problems were not their fault and they wanted to be paid for work already done. The logistics company took the position that the system did not work and that the reimplementation work would have to be part of the original contract. It was apparent that this would result in litigation.

Expert Role

The logistics company retained me as an expert for their side. My role in the case evolved to one of advising on the business and technical aspects of the system contract, the responsibilities of each participant and the business and technical perspectives of the solution proposed by the contractors and the solution's feasibility and applicability to be effectively implemented as designed. I was responsible for describing what should have been done and why, and how not doing those steps resulted in a failed implementation.

Initial Client Positioning

The logistics company asked me what to do next. My first advice was to find a good litigation attorney with experience in this type of case. However, they hired a family friend and general litigation attorney. The company, my client, made it clear that they wanted me to be part of the litigation team. I participated in the initial filing planning meetings. There were many theories tossed about; we discussed the problems with the systems and the "bug-list" of failings. I convinced the attorneys to stay away from the minute details of the "bug list" and focus on the basics - the company did not get what was contracted because the contractors failed to provide the needed products and services and did not deliver the system required. My concern regarding focusing on the "bug list" was three-fold: (1) focusing on the detail took the arbiter's attention from the big picture; (2) the other side could take the position of fixing the "bug list" would complete their responsibilities and not having made much progress to that point we didn't know what other problems were out there (we didn't know what we didn't know) and we couldn't anticipate and these issues would be impossible to litigate later; and, (3) that would show that we lost sight of the true picture of logistics company goal which was to purchase an operating warehousing system that met the contract specs, not just the limited functions of the "bug list". I explained that getting into meaningless details would complicate the presentation and lead us to a contest that would confuse a judge and/or jury. Our pleadings and approach stayed with the big picture.

In addition, it was clear from discussions with the general contractor and the vendors that they were going to point to the logistics company as having given approvals to certain technical and project management steps and thereby trying to transfer responsibility to the logistics company. To avoid this I recommended that we preempt this strategy by making it clear in our pleadings that the general contractor and the subcontractors held themselves out as the experts (supportable by their correspondence, the contract and their marketing materials) in this effort and that our client, the logistics company, was an expert in warehousing and moving product and not in designing and implementing warehousing systems. We explained that the logistics company relied on the general contractor and subcontractors for expertise and direction and followed their lead. We were able to effectively support our position that any approvals provided by the logistics company were prompted by the vendors without knowledge of why the approvals were being given.

While the attorneys provided the legal structuring and wording, my job was to ensure that the business and technical issues were properly explained, that the roles of each party were effectively described and that the impact of the technical design and project management failures was appropriately linked to the ultimate failure of the system. This process ended up with multiple lawsuits being filed in multiple states.

Discovery

The attorneys knew to request the standard materials: correspondence, memos, emails, etc. My experience in designing, developing and implementing systems for clients in a variety of industries, and particularly my recent experience in a similar situation for another logistics company, gave me the background to know what documentation and materials should have been prepared as part of the contractor's work product and what to request in discovery. This contributed to the preparation of the Discovery request and the review and assessment of the materials once they were provided. It is straightforward to be able to review what was provide, however, my experience was particularly valuable in knowing what should have been provided but wasn't. Knowing what should have been provided but wasn't allowed me to demonstrate that the general contractor and its subcontractors failed to perform tasks that would have lead to a successful implementation.

We were also able to determine the likely approach by the other side by understanding what information was being requested in their discovery request. My background was again helpful in advising our attorneys regarding how to assess both our litigation and the other side's litigation strategies.

Based upon the initial requests and provided materials our attorneys were able to prepare subsequent discovery requests that allowed us to further support our approach and contradict their approach. And again, the combination of our attorneys' aggressive strategy complemented by my applicable experience allowed us to formulate a strategy and "story" that effectively described what the contractor, and the contractor's vendors, were supposed to do, what they did, or did not do, and how their failures impacted the success of the project.

From the discovery materials provided I was able to develop technical and business models and mathematically demonstrate that specific design parameters, when implemented, could not have led to a warehousing system that met the logistics company's expectation based on the contract. Some of the analysis also described why the systems were experiencing certain problems in testing and simulated production operations.

My Report

The defendants used their own management and staff as experts and to prepare their reports to the court. In addition, they prepared and submitted their reports prior to my report being written. As a result, I had their report in hand before preparing my report. Rather than having to prepare a rebuttal, I was able to roll my report and rebuttal into one cohesive report.

As expected, my report started with a summary of my credentials, particularly how they applied to this project and a synopsis of the facts of the case as they developed. My report was written to present our strategy regarding the contracted deliverables from the general contractor and its subcontractors, the responsibilities of each of the parties to provide their products and services to the logistics company, what each did do, and the implications of the work on the project. I realized that I was presenting a technically oriented topic for the report reader who probably had no experience in looking at this subject. To relate the reader, I included a parallel analogy of a common experience, such as buying and building a house with a general contractor and multiple subcontractors. I was able to relate the scenarios experienced in buying, building and occupying the house to those of buying, building and using an automated warehousing system. The processes are remarkably the same. This allowed the reader to understand the perspectives and responsibilities of each party and why certain performance failures by the general and subcontractors were significant. This approach also allowed the reader to understand the perspectives of the unknowledgeable buyer; although the logistics company understood logistics and their operations and what they were trying to achieve with the implementation of the new system, the logistics company was not an expert in warehousing systems and technology. This was the purview, expertise and responsibility of the general and subcontractors. By establishing these issues, the report was able to negate the other sides' claims that logistics company accepted the system design and implementation; the logistics company didn't have, nor should they have been expected to have, the expertise to know what they were accepting. This proved a valuable tool in negotiating the final settlement and the courts' rulings.

My report also provided, in simple terms, my mathematics showing how the design was fatally flawed in being able to meet the logistics company's contracted expectations and why this was significant and could not have been anticipated by the logistics company based upon the design presentation of the general and subcontractors.

My report was also able to address the other sides' expert reports from three perspectives:

1. Because the experts participated in the design and development of the systems, they were too close to the process and had a stake in the presentation in that they were defending their own work.
2. The arguments, and the basis for their arguments, were wrong and how they were wrong.
3. How their arguments would have related to the house buying metaphor and how this demonstrated how the general and subcontractors failed in their responsibilities.

Depositions

After reviewing the discovery materials, we began preparing for the depositions. The team met to determine who we wished to depose including the base topics of the depositions. I recommended that we consider the sequence of depositions based on what we could learn from each person and how we can use the depositions of each to address the depositions of the others.

I was asked to prepare a list of the questions for each deposition and help prepare the attorneys for the depositions. In addition to my assistance in preparing for the depositions, I also attended some of the depositions of the various defendants and prompted the attorneys with questions depending upon the direction of the deposition and directions for follow-up of specific answers. We always met before the deposition and during breaks for strategy discussions.

The preparation for my deposition was straight forward. We confirmed what had been presented in my report and the theory of our case and how I was to present my case and how I would respond to questions. During my deposition, I was repeatedly questioned regarding the position presented by the other expert report and how my report contradicted that position. The deposition supported our position and my report.

Negotiations, Court and Settlement

All but one of the cases quickly settled. In each of the settlements, the position of our case was well supported, and our client was quite pleased with the final settlement. In the one case where we went to court, we did receive an approval for our request for a summary judgement. The judge cited my report as a contributing factor to finding in our favor.