H.B. Fuller Co. has won a $12.8 million arbitration case against a management consulting agency that was helping the Vadnais Heights company with implementation of new enterprise resource planning (ERP) software.
An arbitrator in Minneapolis awarded the damages in the case against Accenture and also ruled that H.B. Fuller did not owe another $1.4 million in fees, bringing total damages to more than $14 million.
“While Accenture did not honor its contractual obligations to our company, I am extremely pleased with how our employees responded to the resulting challenges they faced over the course of the project,” H.B. Fuller CEO Jim Owens said in a news release.
Accenture could not be reached for comment on Thursday.
H.B. Fuller is a global supplier of adhesives, sealants and other chemicals. In March 2012, the company acquired the global industrial adhesives operations of Forbo International SA, based in Switzerland for $395 million.
The Forbo acquisition, Fuller’s largest, increased the complexity of the company’s business operations and caused the need to upgrade information technology systems.
At that time, Fuller’s board of directors approved a multiyear plan “Project One” and hired Accenture for the implementation of ERP software from German software company SAP. Total capital expenditures of the project were estimated at $60 million.
Enterprise resource planning software is used by companies to provide an integrated view of a company’s core business processes and resources including cash, raw materials, purchase orders, customer orders and payroll.
The new software was supposed to “go live” in North America in April 2014, and problems with the implementation were apparent almost immediately, Fuller said. The company’s earnings report for the quarter ended May 31, 2014, showed the company had $8.1 million of unplanned and nonrecurring costs associated with Project One.
In Fuller’s earnings release for the fiscal year ended Nov. 29, 2014, expenses had climbed to $20 million for the North American implementation.