Waste Management: Dropping SAP Took Toll on Earnings

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Trash-disposal conglomerate Waste Management said last week that its first-quarter earnings dropped substantially in part due to its "abandonment" of SAP software that it claims didn't perform up to expectations.

Waste Management's first-quarter net income was US$155 million compared to $241 million the same period last year, with the company's decision to discontinue using SAP responsible for $30 million of the reduction, Waste Management said.

The announcement follows Waste Management's filing of a lawsuit in March 2008 against SAP in connection with the allegedly failed implementation, seeking damages of more than $100 million.

SAP has responded by saying in part that Waste Management failed to "timely and accurately define its business requirements" and didn't provide "sufficient, knowledgeable, decision-empowered users and managers" to work on the project.

SAP spokesman Andy Kendzie said Monday that the company declined to comment on Waste Management's earnings report but said, "we feel very strongly about our position and we intend to vigorously defend our position in court and defend our SAP brand."

In a recent filing in the case, SAP said it has engaged more than 25 contract attorneys and spent millions of dollars to defend itself in the suit.

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