Oracle roll-out costs Agilent $70 million in lost profits

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Rolling out Oracle's 11i applications cost test equipment manufacturer Agilent dearly, leading to a larger than expected third-quarter loss. Problems with the Oracle software caused the company to lose about $105 million in revenue and $70 million in operating profits.

The company , which makes testing equipment for semiconductor manufacturing, reported that overall revenue dropped 24 per cent to $1.39 billion from $1.82 billion a year earlier. The firm reported a total loss of $228 million.

Agilent, which has 2,200 different computer systems that run various parts of its operations, began to roll out the Oracle applications in an attempt to reduce the number of systems it has to support.

The company ran into problems when it tried to transfer customer account and financial data from a number of other order booking systems to the new Oracle system. A company spokeswoman said the Oracle system had been slow to respond as employees input orders, but that the problems have since been fixed.

``The disruptions associated with that new system have been more extensive than we expected,'' said Ned Barnholt, Agilent's chief executive officer. ``The good news is that, at this point, we believe the implementation is stable, and we are confident we can meet anticipated customer requirements.'

“We started off at a fairly low level of transactions and just ramped it up. When we got to 50 per cent, we started seeing issues. The good news is by the end of the quarter, by the end of July, we were actually running at the rate of transactions we needed. But we couldn't make up for what we lost.''

Oracle issued a statement in which it said: "At Oracle, we are fully committed to all of our customers for the long-haul and support them in any way necessary. We have a strong relationship with Agilent, and both companies believe the implementation is stable and fully expect that it will meet the customer's requirements going forward."

Agilent has said it does not blame Oracle or the 11i suite directly for the problems it encountered. Nonetheless disclosure of the financial impact on Agilent will be embarrassing for the applications supplier following as it does similar complaints from other customer about glitches in the latest version of the Oracle suite which many commentators have suggested was rushed to market too quickly.

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