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Compaq's internal chaos causes its channel pain

Compaq's internal chaos causes its channel pain

The Australian channel is bearing the brunt of Compaq's disastrous implementation of SAP's R/3 system, with the vendor's internal chaos leaving distributors and resellers to battle disgruntled customers and suffer lost deals.

Compaq officials concede the system, which went live on October 1, has had "teething problems".

Inaccurate stock availability and delivery information appears to be the major side-effects of those problems and it is costing the channel big time.

ARN has learnt that one of Compaq's largest resellers lost $2 million worth of deals in two weeks because it was unable to guarantee delivery times.

And according to Forcefield Computer Services' technical consultant, Peter Walters, Compaq's circumstances have also "strained" the relationship between his company and Micropay, one of its major customers.

A former Digital reseller, Forcefield had been given guarantees by Compaq officials that post-merger, server delivery times would not exceed 14 days.

However, Walters claims when he tried in mid-October to order two Digital servers he was told by his distributor Alsthom that they had to come from overseas and would not be available until the 24th of this month.

With Micropay's project needing to be completed by the end of October in order to meet the requirements of its parent company, the Commonwealth Bank, that delivery timeframe was not an option.

So after consulting with Terry Steer, Compaq's product marketing manager for industry standard servers, Walters instead decided to recommend to his customer that they purchase two Compaq servers that Steer said were available locally.

After gaining board approval from Micropay - until then, a Digital shop - to migrate to Compaq servers, Walters placed his order with Alsthom.

But again, Alsthom came back to him saying stock was unavailable and delivery was not scheduled until the end of November.

"I'm not blaming Steer, because his system had told him that day that there were 100 servers in stock," Walters said. "But there's obviously major confusion with the SAP system over stock levels when on one hand I have Alsthom saying that the stock has to come from Singapore and on the other, I have a Compaq person saying there's stock on hand."

And Walters' experience is apparently not unique.

A senior executive at a large Compaq reseller told ARN that Compaq's internal system problems had also caused his company "tremendous pain" and customers had cancelled orders.

The executive claims Compaq had suffered serious shortages of ProLiant 1600 servers, but when the reseller called the Compaq Action Centre to get approximate availability time, the vendor could not provide a definitive response.

"Compaq's answer was they didn't have an answer," the executive said.

"Apparently, they had lost all visibility of stock levels and inventory."

The biggest frustration of Compaq's internal difficulties is not knowing what's going on, according to the executive.

"We don't care so much about when we get the equipment, as we do about knowing when we are going to get it, because at least then we can plan around it."

But the lack of forthcoming information from Compaq may be because the vendor itself isn't aware of the extent of the issue.

One source claims Compaq is having 'so many problems with the SAP implementation they don't know what's going on'.

Nevertheless, there has apparently been no official correspondence from Compaq management internally or externally advising of the potential problems.

Yet, in replying to Walters' complaint, Tony Bill, Compaq's manager of the enterprise computing group, acknowledged the vendor has had troubles with the new system.

"We cut over our internal systems to a new environment on October 1 and we anticipated we would have teething issues for around a week or so.

"As you have experienced, we still have those issues and our business partners such as yourself, and our customers feel the pain."

Compaq officials did not respond to ARN's calls prior to presstime, however Bill assured Walters in his reply that the vendor is "now pretty much free of any issue relating to delivery of products due to system glitches".

However, as of late last month, the anonymous executive spoken to by ARN said Compaq had yet to clear its backlog of orders and was still three days behind in processing.

Despite ultimately sourcing the Compaq servers he needed in time to meet his customer's requirements, Walters claims the whole experience has left him "extremely reticent to quote Compaq" to his customers.

"I'm holding off because I've lost faith in their ability to deliver products on time," Walters said. "However, when Digital was bought out, I started seeding my clients about Compaq and as a reseller, my integrity is at stake, so I can't give up on them."


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