Cognizant said it 'looks forward to fully defending itself and telling its side of the story in the proper for... Read More

BENGALURU: Cognizant has been sued by Crawford & Company, the US-based independent providers of insurance claims-handling services, for alleged breach of contract.

Cognizant had been mandated by Crawford to implement PeopleSoft Financials software as part of an ERP project called Project Atlas that was critical to Crawford’s operations. Project Atlas included components for both internal operations and client-facing services.

In the lawsuit filed in a US district court, Crawford says it suffered substantial damages because of the way the project was implemented. “Even though Crawford notified Cognizant of serious problems with coding, performance, testing and other problems, Cognizant failed to remedy them. Instead Cognizant continued to fail to properly staff the project and to miss important deadlines, all causing significant injury to Crawford including problems so significant they threatened Crawford’s own customer relationships. This lawsuit seeks recovery for Cognizant’s breach of its contracts with Crawford,” the company said in the lawsuit.

When contacted by TOI, Cognizant issued the following statement: “Cognizant looks forward to fully defending itself and telling its side of the story in the proper forum.”

Crawford provides a host of services including insurance adjusting services, catastrophe services, third party administration services and services for large and complex claims.

Project Atlas, it said, involved implementation of a new financial/accounting package to meet business and technology needs of Crawford’s finance functions related to billing, accounts receivable, fixed assets accounting, financial accounting and cash management. The new financial accounting package was expected to be a modern, web-based, scalable, and modular enterprise software.

In December last year, when Crawford informed Cognizant about the problems, Cognizant is said to have responded that all the problems were excusable under the master services agreement (MSA) and result from actions that were “beyond Cognizant’s reasonable control.” An email to Crawford on the matter did not elicit a response till the time of going to press.

Most IT firms face heat from clients for alleged botched implementations. Wipro effected a $75 million settlement with its decade-old customer National Grid for release of all claims related to an ERP implementation project following a lawsuit the latter filed in 2017. Wipro said a settlement had been effected without admission of liability or wrongdoing of any kind by the parties. Two years ago, US brewer MillerCoors sued HCL for $100 million for not meeting timelines, inadequate staffing and defective implementation in a project. HCL filed a counterclaim that the scope of the work was not communicated effectively.

