Chicago-based brewer sues HCL Tech for $100 million

The brewer says that HCL failed to meet the deadline

HCL Technologies has been issued a lawsuit worth Rs 665 crore ($100 million) by its Chicago-based client MillerCoors citing breach of contract. 

The brewer, which hired HCL for a SAP upgrade contract to drive innovation and efficiencies across different breweries, has alleged that the Indian IT services failed to meet project deadlines despite having a sufficient number of people. The lawsuit was filed in federal court in Illinois on March 13 and named HCL Technologies and HCL America. 

HCL Technologies was hired for a typical enterprise resource planning implementation in order adopt a set of innovative business processes and implement them in a SAP software solution. 

While the contract was initially worth nearly $53 million, later $9.6 million was added to adjust the time frames, Computerworld magazine reported quoting the lawsuit. For such software package implementation contracts, businesses pay the IT services firms based on per man-hour used. 

“HCL was unable to adequately staff the project and maintain the project schedule." The lawsuit also alleged defects in the software. MillerCoors in June sent HCL a notice of termination and plans to secure a new supplier, the Computerworld report noted.

HCL Technologies did not respond to queries sent by Business Standard immediately.   

Industry experts believe delay happens in such technology transformation projects due to multiple reasons be it lack of right skills or management’s acceptance of new processes on the client side. In such contracts, implementation happens across multiple business units and often different geographies.    

“Large transformation deals require complex changes to business processes, organization structure and roles and integration of multiple technologies. These projects need readiness to change and cross stakeholder alignment. It is also imperative that the right skill level and mix are deployed from both the client organization and service provider side to ensure success,” said Malay Shah, Senior Director, High Tech sector for Alvarez & Marsal India, a consulting firm and business turnaround specialist.