Oracle bone inscriptions and our contract dispute

Background

For the past 11 years since 2008, the ERP system, SAP B-one + SAP B-one auxiliary system has been a business support tool for our company in managing and controlling commercial affairs.

The maintenance of this system has always been undertaken by a specific employee of our company. Considering the unique value of this employee, even after he returned to his original residence for personal reasons, we still signed a part-time employment contract with him.

The contract stipulates that the company will provide 3,000 yuan per month as compensation, hoping that the employee will continue to be responsible for the maintenance of our ERP system through remote control tools. He agreed.

However, after 4 years of cooperation, the employee proposed to increase the annual maintenance fee from 36,000 yuan to 100,000 yuan. If this trend continues, the maintenance and development of this system will become a bottomless pit for us, as we must rely on this employee to maintain the system. Therefore, we want to find an alternative to this auxiliary system and avoid relying on specific individuals or teams again.

Our budget is 150,000 per year. The goal is to seek rental products or services for ERP, in order to save on maintenance costs.

Finding a supplier that can replace our existing ERP system

We first contacted SAP and presented our needs—upgrading the ERP system. SAP's business representative recommended that we adopt SAP by Design. After comparing the functionalities of this system with our existing ERP integration, we found several weaknesses in the system.

Firstly, the deployment cost alone exceeds 650,000 yuan, and we also found that the system's features in the manufacturing field are relatively weaker compared to our existing system. We even learned that SAP had already stopped the development and updates of SAP Bydesign.

Thus, we needed to continue searching for other ERP product suppliers that are on par with By design. Later, we discovered Oracle's Netsuite, a cloud-based ERP and e-commerce service product that requires no maintenance and always keeps up to date with the latest version.

We collected a lot of introductory materials on Netsuite's modules and functionalities. After preliminary research, we found that this system very much meets our business needs. We decided to contact Oracle. We left a message on their official website, indicating our interest in using their cloud service ERP product to replace our current SAP system and left our contact information.

About a week later, in the last week of May or the first week of June, we received a phone call from Joseph Li, a salesperson from Oracle's Guangzhou branch. During the conversation, he initially understood our general needs for the new system, and they also expressed their capability and confidence in providing solutions for us, so we both agreed on a time to meet at our factory.

Another week passed, and they did not come. But a week later, the day before the meeting, they notified me, asking if we could meet on the upcoming Tuesday. We remember it was around June 12, 2018.

The visitors this time were: Mr. Li Xiaowen, Senior Director of the Application Products Department of Oracle's Guangzhou branch, Joseph Li, and Mr. Deng Huining, the South China Marketing Manager of the Application Software Division. The main purpose of this visit was to further confirm our needs for upgrading and replacing the new ERP system.

During the meeting, our company further detailed the role of the current ERP in our business and the problems we are currently facing.

Oracle's engineers introduced us to the market positioning, product features, and functionalities of the NetSuite product, stating that their Netsuite cloud service is most suitable to replace our current SAP product, as this product almost requires no additional personnel for after-sales maintenance.

We stated that we need Netsuite to be responsible for replacing our current ERP system, as we do not intend to let the current ERP maintainers and managers know about our plans.

In response to this, Oracle stated that if these implementation tasks were completed by their internal staff, it would incur extremely high costs, which would ultimately be passed on to the buyer. This is not a wise choice for the buyer.

They also stated that they have professional Netsuite product implementation business partners, and the results of the implementation work done by their partner team would be exactly the same as those done by Oracle's internal engineers. The other party revealed that the personnel sent by Oracle were actually sourced from Netsuite implementation partners, but the price difference between the two is significant.

Mr. Li Xiaowen, Senior Director of Oracle's Application Products Department, told us that they would provide us with a replacement proposal quote based on our current ERP system and its actual needs. After we see the quote and content, we will further communicate to ensure that this matter is done well.

He also suggested that next week, when conducting research, he would come along with the Netsuite business partner and informed me that the implementer of the proposal is a developer who has jumped out of Netsuite. This engineer is very familiar with the product, and we should have confidence in his abilities. With the cooperation of this implementer, the product implementation will be completed smoothly.

After the meeting, on June 15, 2018, Mr. Deng Huining from Oracle sent an email to our company leaders, requesting us to provide the functional requirements of each department based on the current actual situation. Then, after compiling them into a table, provide it to him, and he said that after receiving it, they would evaluate the relevant workload and arrangements with the implementer. The email is as shown in the attached image:

On June 28, 2018, we received the quotation.

We also reviewed the product content provided by Oracle Netsuite. From the content of the quotation, we found that the products offered by Oracle indeed meet our current needs, even higher than the products and levels we expected. Of course, even with a significant discount, the total price is more than double what we originally budgeted.

We feel it is worth this price.

We believe that if it can meet the company's future business development, this price is still reasonable.

Nevertheless, we are still somewhat skeptical, as our current ERP system has been continuously developed and maintained for 8 years. Can Oracle's product really replace our existing system?

We also expressed our concerns in this regard. In response to our questions, Oracle's sales personnel stated that they would send a pre-sales technical engineer to conduct research to further clarify whether Oracle's product can replace the functionalities of our current product.

As the meeting was nearing its end, Oracle inquired about our investment budget for the project.

We responded that we need to compare prices with other suppliers. If the results are similar to Oracle's quotation, we will prioritize Oracle.

Overall, the meeting and communication were relatively harmonious and smooth.

Main factors affecting our choice and purchase

On the morning of June 19, 2018, Mr. Deng Huining, Mr. Jia Wenbo, Mr. Li Xiaowen from Oracle, and Mr. Chen Qingde from Shenzhen YX Network Technology Co., Ltd., their product application business partner, a total of four gentlemen visited our company.

The purpose of this visit was to confirm our requirements for the ERP project upgrade.

All department heads and ERP users from our company attended the meeting. The attendees included: Accountant of the Finance Department, Qu Yunyi, Head of Engineering Development Department, Zhang Hongchen, General Manager, Qiu Xianlv, Director of Market Customer Service Department, Tan Shuidi, Manager of Quality Management Department, Wu Rengui, Head of Logistics Department, Luo Guiwen, and other core users of the company's ERP.

Both parties introduced themselves at the beginning of the meeting. The representatives from Oracle also had a general understanding of each attendee's business role.

Each attendee listened to the explanations from Oracle's engineers and sales personnel about the general functionalities and benefits of Netsuite. We hoped to collect each user's suggestions for the new ERP during this meeting.

At the same time, Oracle's pre-sales engineer also requested us to describe our requirements for the ERP system in writing. In response to this, the attendees all stated that our needs have already been reflected in the current ERP. Oracle just needs to experience these functionalities and services in the products they will provide us.

Each attendee was required to list the ERP functionalities needed for their business positions. Each department worked on this after the meeting and compiled the results to Mr. Guo Zhirong, the business director of Schneider, via email.

For this purpose, we invited Oracle and its partner members to browse our current ERP system and record and capture various interfaces and images of our system. We also provided the product manual and operation manual of SAP B-One to the other party, so that Oracle's staff and its business partner members could better understand our needs.

In fact, Oracle's staff conducted detailed research and documentation on the functionalities and features of the system we were using at that time.

After Schneider compiled the demand lists from various departments and positions, they forwarded them to the pre-sales engineer at Oracle's email.

On the afternoon of June 19, Oracle's pre-sales engineer, Mr. Jia Wenbo, organized our demand functional list and attached an email for us to confirm the content of the requirements in the attached table. This indicates that Oracle is completely clear about our usage requirements for the ERP product.

The information provided by this Oracle employee in the email further strengthened our willingness to purchase the product. Because he clearly replied in the email that our requirements could be met. That is, the product provided by Oracle can completely cover the business characteristics and functionalities of our existing system.

On July 3, 2018, the head of Oracle's business partner company, Mr. Chen Qingde (English name Winson), began implementing the Netsuite system and requested us to provide a list of key users.

On July 4, 2018, we opened access to our currently used SAP system and SAP auxiliary system for the implementer, Mr. Chen.

On July 16, 2018, we paid the full product usage fee to the bank account designated by Oracle. On July 18 of the same year, Mr. Deng confirmed via email that the money had been received.

On August 1, 2018, our company signed a consulting service contract with Shenzhen YX Network Technology Co., Ltd. After signing the contract, we immediately paid the other party 100,000 yuan as a consulting service fee.

On September 3, 2018, the implementer, Mr. Chen, emailed to notify us that user login permissions had been activated.

On September 12, 2018, the implementer, Mr. Chen, informed us that the processes for various positions in the Netsuite system were basically completed and planned to demonstrate and discuss the process at our company.

On November 4, 2018, the implementer, Mr. Chen, summarized the progress of the work, stating that it had been 4 months since the implementation began, and our company still could not operate in the Netsuite system.

On November 15, 2018, the implementer, Mr. Chen, sent the system training documents and requested our company to collect and provide data from the original SAP system for import into the Netsuite system.

On December 13, 2018, after nearly a month, most of the data had been imported into the Netsuite system. Additionally, some operational documents for certain positions were provided, but some positions (Quality Department, Finance Department) still had not received operational documents.

On December 25, 2018, Oracle's partner informed us via email that most of the issues collected over the past few days, as listed in the table, had been resolved, and a small number of issues were still being processed.

Additionally: To avoid the peak working period in the warehouse tomorrow, the training originally scheduled for tomorrow will be held this Thursday. Please help reserve one hour of training time for both the production department and the warehouse department. The training scheduled for HR tomorrow will also be held this Thursday, please help inform Ms. Cao from HR.

On January 15, 2019, the implementer, Mr. Chen, provided the prepayment application process and the normal payment application process. The tax invoicing application process has been completed, and the documentation is currently being prepared.

On January 18, 2019, the implementer, Mr. Chen, sent the training documents for various departments again, just slightly updated from the original, and some missing operational training documents for certain positions have still not been provided.

On January 30, 2019, the training only targeted a specific step for each position and did not go through the entire process coherently. The heads of various departments in our company were unclear about how the process information of related departments was communicated.

On February 15, 2019, the implementer, Mr. Chen, notified us on February 13 and was scheduled to come to our company on February 14 and 15 to continue the unfinished training process. The training was still targeted at various departments and did not go through the entire process. At that time, we raised that the shipping labels and product drawings used in our current SAP system could not yet be produced in the Netsuite system, and Mr. Chen stated that it would take a lot of time (about a few months) to develop.

On February 28, 2019, the implementer, Mr. Chen, suggested that we operate according to the previous training documents, with no updates or additional new training documents. The first reply stated that they would arrange a time to come to our company as soon as possible.

On March 5, 2019, the implementer, Mr. Chen, continued to ask us to operate according to the previous training documents, with no updates or additional new training documents. The second reply stated that they would arrange a time to come to our company as soon as possible.

On March 17, 2019, the implementer, Mr. Chen, still asked us to operate according to the previous training documents, with no updates or additional new training documents. The third reply stated that they would arrange a time to come to our company as soon as possible.

On March 21, 2019, the implementer, Mr. Chen, said he would record the entire process and provide a voice explanation to us. The fourth reply stated that they would arrange a time to come to our company as soon as possible.

On March 28, 2019, after more than a month of email communication, the implementer, Mr. Chen, finally only provided the voice and video operational processes for some positions, which merely converted the originally text-described operational documents into actual operational processes. He also mentioned that the labels and product drawings were still missing. Time after time, the visit to our company was postponed, and up to this point, the entire system process had not been completely gone through.

On the morning of March 28, 2019, Oracle's business partner sent an email to Mr. Guo and the company manager of our company. In the email, the Oracle implementer promised us that he would deliver the actual operational process to our company manager soon. From the content of the email, it can be indicated that as of that day, the product's usage configuration was still unable to be applied as necessary.

As evidenced in the email, we reached an agreement with Oracle and its partners in June 2018. However, by nearly April 2019, the product was still not delivered for our use.

The role of the engineering department in this event:

1. Participate in the development of the NETSUITE new system as per company requirements;
2. Explain the current ERP system processes and operations related to the engineering department to Oracle's designer, Wisnon;
3. Provide relevant forms (paper or electronic) that our department will use as requested by Oracle's designer Wisnon, such as BOM tables, production orders, etc.;
4. Communicate with Oracle's designer Wisnon to discuss details regarding the configuration of the new system and our requirements, such as simplifying the new system's operation interface;
5. Test the new system process, check and find issues with the new system;
6. Supervise other departments to complete the developers' requirements and testing, and find issues with the new system and provide feedback.

Memorable events:

1. Participate in the initial development meeting;
2. Oracle personnel stationed at the factory, providing various requirement information to him;
3. On January 29, 2019 (before the Spring Festival holiday), Oracle personnel Wisnon came to the factory to explain how to operate the developed parts of the new system;
4. After the Spring Festival, Mr. Guo urged the completion of the order process testing;
5. Meeting with Oracle personnel to review the failure to deliver on time.

Seeking reasonable solutions from Oracle's parent company

On April 1, 2019, we complained to the pre-sales service of Oracle China Co., Ltd. about the issues we encountered in our transaction with Oracle.

After the email was sent, we received a phone reply from Beijing. They said that relevant personnel from Oracle's Guangzhou branch would contact us.

Around April 2, 2019, we received a call from a Mr. Li. He stated that he would send someone to our company to understand the situation. Oracle's Guangzhou side sent two staff members to visit. They were: Customer Manager, Guo Wei, and Senior Consultant, Wang Ziyi.

All members of Schneider also attended the meeting. During the meeting, we operated the Oracle Netsuite system under the customer service director's account according to actual applications and found that the process for issuing the "Delivery Notice" was still missing, resulting in both parties confirming that the entire business process was unable to "go through."

On April 12, 2019, Oracle Customer Manager Li Xuan and its business product system implementer, Mr. Chen Qingde, visited to verify whether the entire business process was really "unworkable."

First, the customer service department operator, Tan Shuidi, entered the sales order, which was approved by the operations department operator, Qiu Xianlv; the next step was to conduct order review, and the customer service department created an order review event under the event options according to the operational guidance provided by the implementers, setting reminder notifications to the relevant department heads to remind them that there are orders needing review.

Following the order review process, starting from the customer service department, it passed through the engineering department, logistics department, quality department, production department, and finally returned to the customer service department, all operations were able to go through. After completing the order review operation, according to our business process, if there is inventory, the customer service department issues a delivery notice to the logistics department, while also copying it to the warehouse and production; if there is no inventory, a production notice needs to be issued to the engineering department.

At this point, our customer service operator did not know how to issue the delivery notice, and the implementer, Mr. Chen, also stated that he could not issue the notice according to the format used in our original system. However, Oracle's Customer Manager, Mr. Li, suggested that this could be done by installing a communication tool like QQ to remind relevant personnel. We found this very absurd.

Due to the inability to proceed with this step, the subsequent processes could not be connected, and we could not continue. The implementer, Mr. Chen, said that this function needed to be developed separately. As of April 12, our company still could not perform basic process operations in the Netsuite system, and the system implementer, Mr. Chen, could not provide a specific delivery date.