ScanSource Sues Avanade Over Alleged Microsoft Dynamics AX Implementation Failures

Avanade Inc., a joint venture between Accenture and Microsoft Corp. has been sued by ScanSource Inc. for what ScanSource is publicly calling a "bait-and-switch" related to a Microsoft Dynamics AX implementation project.

The lawsuit and the related public relations offensive come after ScanSource claimed that Avanade's initial estimate for the installation of a Dynamics AX solution increased from $17 million to nearly $66 million and from 11 months to three years - and the system is still not live.

Avanade is not commenting at this time.  A spokesperson stated: "We don't comment on pending litigation.  However, we can tell you that we believe the allegations are without merit. We intend to defend our position."

According ScanSource, a POS and barcoding technology distributor, they signed a contract with Avanade in 2009 to replace its legacy infrastructure with a new core Dynamics AX solution to support its global expansion. Avanade's implementation was originally scheduled to be finished within 11 months, according to ScanSource officials.

The lawsuit, which was filed in U.S. District Court in Atlanta, alleges - among other things - "fraud, tortious misrepresentation and breach of contract."  ScanSource said it's seeking damages of tens of millions of dollars the company said it has incurred and will continue to incur because of Avanade's misconduct.

ScanSource alleges that after being on the job for only a few months, Avanade drastically increased its initial estimate. And that meant that ScanSource either had to pay substantially more for functionality that Avanade was supposed to deliver as part of the initial quote, or do without that functionality to cut a budget that was already higher ...