November 19, 2013 at 16:10 PM EST
Bridgestone Sues IBM For $600 Million Over Allegedly 'Defective' System That Plunged The Company Into 'Chaos' (IBM)

Tire company Bridgestone has slapped IBM with a huge lawsuit over a custom-built computer system that performed so poorly, it threw Bridgestone’s "entire business operation into chaos," the suit alleges, as reported by the Tennessean.

The system cost over $75 million and went live in January, 2012. It immediately experienced "system-wide failures" for three months, Bridgestone alleges:

"Tires which should have been delivered to fill customer orders … piled up in distribution centers, smaller warehouses, and trailers parked in parking lots. Ultimately, [Bridgestone] was forced to lease an enormous amount [of] public warehouse space at great expense."

The complaint also says:

“IBM’s defective system lost or deleted scheduled customer orders, would not process orders, duplicated, or partially processed orders and, for those limited orders that were processed, did not complete critical corresponding business applications.”

But IBM says the problems were caused by Bridgestone. The company failed to do its part so that IBM could build the system on time and on budget. IBM sent this statement to the Tennessean:

Ultimately, Bridgestone’s repeated failures had a significant impact on the project’s cost and schedule, and its decision to ignore IBM's warnings and prematurely roll out the implementation across its entire business negatively impacted its North America operations. Bridgestone has elected to bring this matter to court. IBM worked hard to make this a successful project and regrets a dispute with a client.

When it comes to massive multimillion custom-built computer systems, problems frequently happen. Half of IT projects with budgets of over $15 million dollars run 45% over budget and are 7% behind schedule, according to research from McKinsey.

IBM seems to have its share of troubled projects. In August, Pennsylvania killed a contract with IBM because, as of July, the project was $60 million over budget and over three years late.

We reached to IBM and asked for further comment.

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