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City council megaproject mulls ditching Oracle after budget balloons to £131M

(2024/02/22)


Birmingham City Council, the largest local authority in Europe, is considering ditching Oracle as its main ERP and HR software after a disastrous implementation has left it unable to file auditable accounts, with the budget rising from £20 million ($25 million) to £131 million ($166 million).

Speaking before the council's audit committee [1]yesterday , officials said the council was still deciding whether to reimplement Oracle or look for another solution, as the public body struggles to stabilize the current Oracle implementation and make it fit for filing auditable accounts with a functioning banking reconciliation system (BRS).

City councilor and member of the audit committee Meirion Jenkins said: "There is a point in an implementation where companies would say, 'We're going to stop, we're just going to accept that we do not wish to throw good money after bad. We're going to implement something else."

[2]

He then asked officers whether the council — which is planning £300 million in overall budget cuts — had reached that stage.

[3]

[4]

Philip Macpherson, a recently appointed Oracle program lead for the Council, said: "We are looking at doing some options analysis to genuinely weigh up the pros and cons around that to sort of underpin the case for reimplementation [of Oracle] and spec out the outcomes the council's after."

The council's current plan is to re-implement a new version of Oracle, after its heavily customized version of Oracle for finance, HCM, procurement, supply chain management, CRM and payroll went live in April 2022, [5]despite "red" warnings on several aspects of the functionality. The customization was against the council's original plan, and last June it decided to revert to a more "out of the box" Oracle solution.

[6]

In budget [7]documents released earlier this week , the council allocated an additional £45 million ($57 million) to the re-implementation across the next two years' budget, in addition to the £86 million ($108 million) budget already approved. Earlier estimates had suggested it would take £100 million ($127 million) to sort out the Oracle project, which was originally estimated to cost £20 million ($25 million).

However, in yesterday's Audit Committee meeting, Macpherson said the team was currently unable to estimate the cost and timetable of the Oracle re-implementation.

Asked how many consulting days would be required and a timeframe for reimplementation, he said: "I can't tell you that today because we need to go through the detailed planning process... We've got a sense of the work that needs to be done. And part of that is also assessing what how much of the implementation can be reused, how much of it needs to be rebuilt from scratch. My commitment [is] to do that as quickly as possible. Some estimates have been put into the budget around what that might be. We will refine those," he said.

[8]

In a testy meeting, Councilor Jenkins said: "What we're saying [is] we have a train crash of an accounting system. It's all but unusable. The person who's in charge of sorting it out cannot tell us how much we will spend between now and the point when it is finished… that's how many consulting hours or how many consulting days [it will take] — and bear in mind these people are coming into the £1,000-a-day-plus. And we don't know when the projected go live with the reimplemented system is. That's incredibly unpersuasive to me.”

Council finance director Fiona Greenway, also now senior responsible owner for the Oracle project, said: "We are getting to grips with something… but [we] haven't got all of that information. I ask by-your-leave for us to get that information. We should be able to respond to those questions, absolutely. We've built more money into the budget to allow for what we think it may cost. But we don't want to give you a set of numbers or deadlines… then come back next time and say, 'Actually, they've changed'."

[9]Oracle faces continued legal battle over alleged NetSuite software misrepresentations

[10]Top five reasons to move from CentOS to RHEL (according to Red Hat)

[11]When red flags are just office decoration: Edinburgh Uni's Oracle IT disaster

[12]Oracle partner gets multimillion top-up after Edinburgh Uni disaster

She promised to give the audit committee more detail on the timetable and budget for the Oracle implementation.

As the council faces uncertainty on an Oracle project with a £131 million ($166 million) budget, it announced [13]it would raise taxes by 21 percent over the next two years as part of efforts to slice £300 million out of the budget. In efforts to save money the council plans to dim street lights and cut waste collections. Up to 600 job losses are still likely, the local authority said.

Part of the council's financial troubles stem from historic equal pay claims, the settlement of which could amount to £760 million ($963 million). ®

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[1] https://birmingham.public-i.tv/core/portal/home/13511

[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zdd9uV7pPAZMXQUlFYWbrAAAAdY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zdd9uV7pPAZMXQUlFYWbrAAAAdY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zdd9uV7pPAZMXQUlFYWbrAAAAdY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[5] https://www.theregister.com/2023/10/04/birmingham_city_council_oracle_project/

[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zdd9uV7pPAZMXQUlFYWbrAAAAdY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[7] https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=57dLUgfYSn9F3fq69m9feOX2LbWPY8wqfbWgNIO0bsW241KaeDVjnw%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=hFflUdN3100%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=hFflUdN3100%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d

[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zdd9uV7pPAZMXQUlFYWbrAAAAdY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[9] https://www.theregister.com/2024/02/21/oracle_fraud_case_continues/

[10] https://www.theregister.com/2024/02/20/red_hat_rhel_reasons/

[11] https://www.theregister.com/2024/02/08/edinburgh_university_oracle_report/

[12] https://www.theregister.com/2024/02/06/oracle_partner_gets_35_million/

[13] https://www.bbc.co.uk/news/uk-england-birmingham-68342493

[14] https://whitepapers.theregister.com/



So, continuing the follow-up of the disaster

Pascal Monett

Consultants at £1000/day ? Par for the course. If you want to fail spectacularly, you need those kind of guys and, especially, you need to not listen to them.

It's all well and good to blame the consultants, but when you've ignored the red flags, you can only blame yourself for the shambles that ensues.

Re: So, continuing the follow-up of the disaster

tmTM

How long have the consultants been in? Are they not there to try and sort everything out?

The horrific project management and meddling by the council themselves is what's created this mess. I noticed the councillors are starting to lay blame at the door of recently employed staff leading this project, even though they are ones who cocked everything up.

Re: So, continuing the follow-up of the disaster

A Non e-mouse

How long have the consultants been in? Are they not there to try and sort everything out?

A consultant's aim is to look after their pay packet.

I'll leave you all to decide if this is sarcasm or truth....

Re: So, continuing the follow-up of the disaster

Doctor Syntax

High pay is essential for a successful consultation.

The people at the bottom of the pile usually have a good idea of what's wrong and what needs to be done. But those who know the price of everything and the value of nothing will disregard such information - it can't be worth much because it comes from someone on a much lower pay scale.

Successful consultants aren't blinkered by this attitude. They ask those in a position to know best and present it to management with a high price tag on it. Because it cost a lot it must be worth a lot.

Re: So, continuing the follow-up of the disaster

Anonymous Coward

I remember government paying £800~1000 pday for the senior/principle grades of technical consultants pre 2010, which equates to circa £1500 today.

> you need to not listen to them.

You need to listen and understand…

I was thrown off several projects for speaking what people (especially customer sponsor) didn’t want to hear, only to be vindicated a few months later when the project got cancelled; a few even made IT press headlines… Thankfully, having previously briefed my managers and got their buy in to the problem and the proposed solution, these didn’t greatly impact my career.

Re: So, continuing the follow-up of the disaster

Graham Cobb

I remember government paying £800~1000 pday for the senior/principle grades of technical consultants pre 2010, which equates to circa £1500 today.

Ah! That explains it!!

The customer thought they were paying for principled consultants but the supplier actually supplied principal consultants instead. So no wonder the council was screwed. All that is left for the inquiry team to determine now is whos who's whose what person's fault it was.

Re: So, continuing the follow-up of the disaster

FrogsAndChips

Consulting: If you're not a part of the solution, there's good money to be made in prolonging the problem ( [1]Despair, Inc )

[1] https://despair.com/products/consulting

Please tell us something new

Anonymous Coward

about Oracle and projects that end in disaster and budgets that are out of control.

How about NOT reporting the failures but only tell us about those that come in on time and on budget?

Probably going to be a paucity of news. Much like getting Trump (or just about any GOP politician) to tell the truth about anything.

Here is just one fact check of No 45

https://www.youtube.com/watch?v=xzQptsGUo3c&pp=ygUQbXNuYmMgZmFjdCBjaGVjaw%3D%3D

Why?

MrGrumpy

Doesn't Oracle step in and sort these shitty mega projects out?

Re: Why?

Anonymous Coward

I'm sure it would, if paid. It's not Oracle's job to fix for free the screwups caused by a council that kept changing requirements, didn't listen to warnings, and ignored their consultants.

If you crash your car by ignoring traffic laws, would you expect Ford/Honda/etc. to get you out of trouble for free?

Re: Why?

A Non e-mouse

There is an element that Oracle should have walked away and said "This will be a disaster and bad PR for us"

Re: Why?

Doctor Syntax

The only Oracle reaction would be "This will make money for us".

What would it cost ...

alain williams

for the UK government to commission a local authority managements system that it would release as open source ? An up-front cost that would save billions later on. Call it LAsoft.

I am aware that not all local authorities have the same requirements but the core ones must be similar. It could also influence legislation: ie Parliament not enacting laws until LAsoft was able to support it.

I know that the failed unified NHS system casts a long shadow here, but maybe those mistakes could be learned. Part of it is making local authorities have common working procedures unless there was good reason not to - eg Urban/rural requirements.

A home grown approach would also stop us bleeding money to large overseas corporations and would build expertise in the UK.

Timescale ? 5 - 10 years maybe.

Re: What would it cost ...

Michael

Install odoo. Configure with required plugins. Import data.

Only thing that would really be needed is plugins for local authorities. Contract it out with a requirement it be made a free plugin or free for UK authorities?

Re: What would it cost ...

MarkMLl

Contract out to... ICL? Sorry, Fujitsu.

The idea of having a preferred supplier for HM's DP Systems is not inherently bad, particularly if they genuinely have proper staff training schemes etc. (i.e. like Marconi had when they were the preferred supplier for certain types of telephone system).

But it needs politicians with some minimal level of cluefulness to get it to work.

Re: What would it cost ...

alain williams

The idea of having a preferred supplier for HM's DP Systems is not inherently bad

The project being open source would help with that.

Re: What would it cost ...

Jedit

The answer is, as always, "less than outsourcing it". However, efficient internal solutions don't put large bungs into the pockets of corrupt politicians, so that's not acceptable.

Re: What would it cost ...

Roland6

> An up-front cost that would save billions later on.

You expect the people who came up with PFI, PPP etc to see the financial benefit to taxpayers and put this ahead of the financial benefit PFI et al represents to their sponsors…

Re: What would it cost ...

A Non e-mouse

PFI was never about saving the taxpayer money: It was always about syphoning money into the private sector.

Re: What would it cost ...

katrinab

Birmingham is a Lower Tier Local Authority, so some local government functions are performed by the Upper Tier Local Authority - West Midlands Combined Authority.

As an aside, Birmingham isn't the largest local authority in Europe, it isn't even the largest in Birmingham, but it is the largest Lower Tier Local Authority. Île de France (Paris region) is the largest Upper Tier Local Authority in Europe.

The split of duties between lower tier and upper tier local authorities is different in different parts of the country, and some places have unitary authorities that do everything. But surely you could have modules for each of the functions a local authority has to do, and each one could install the modules that are relevant to their duties. The only unique thing about Birmingham is that it is responsible for policing loan sharks in the whole of England, so they would need to develop their own module for that.

Re: What would it cost ...

Handlebars

I think we'd be in a cheaper but just as disappointing situation where change requests get gridlocked and everything still falls back to Excel.

So whose bright idea was it in the first place?

MarkMLl

I've seen comment in the past that Oracle tends to pitch its products directly to prospective customers' board members, cutting out the specialists who really know what's going on.

Has anybody looked carefully at the procurement process in the case of Birmingham?

I don't mean whether the tendering process was done by the book, I mean who started pushing the idea that relying on Oracle was a fundamentally sound bet?

Re: So whose bright idea was it in the first place?

Martin Summers

It would be a blind tender initially and Oracle will have ticked all the boxes.

Re: So whose bright idea was it in the first place?

Anonymous Coward

The big companies know how to game the system.

Re: So whose bright idea was it in the first place?

Mike 137

Philip Macpherson, a recently appointed Oracle program lead for the Council, said: "We are looking at doing some options analysis to genuinely weigh up the pros and cons around that to sort of underpin the case for reimplementation [of Oracle] and spec out the outcomes the council's after."

I think this goes a long way to explaining the problem. Firstly, it's prime example of muddled thinking -- combining choice of a specific product at the same time as specifying intended outcomes. Secondly, it exhibits a (probably unconscious) prejudicial bias in seeking to underpin a specific product choice. Thirdly, it's incoherent and ('sort of') vague. Fourthly, didn't they do sufficient options analysis before starting the programme?

What's needed to get these programmes implemented cost effectively is a coherent process of evaluation, design and implementation consisting of a sequence of stages with defined outcomes that can be verified as accomplished successfully before proceeding to the next stage. But of course everything is now 'agile', which (contrary to the manifesto) typically just means jumping to conclusions and launching into implementation without sufficient planning or risk assessment. Delivery is quicker, but commonly the wrong thing gets delivered.

Re: So whose bright idea was it in the first place?

Anonymous Coward

Maybe we need a team/department from central government that deals with the tendering process for all council IT systems over £1m. One that can come in, identify problems with the tender process and bids and ensure that the taxpayer is getting value for money...

It seems at the moment, there are 100+ councils and government departments - before you get to the NHS Trusts and other organizations - and all of them are repeating the same mistakes every time.

Re: So whose bright idea was it in the first place?

Doctor Syntax

"Delivery is quicker, but commonly the wrong thing gets delivered."

https://miro.medium.com/max/2800/0*K9vXpKMfe6hNQQnw.png

Re: So whose bright idea was it in the first place?

Lee D

They ended up on Oracle, that's all you need to know.

You only end up on Oracle when you have absolutely no sense, control or idea of what you're actually doing, what that requires, and what the best way to implement it would be.

My concern would be why is this some sort of bespoke project rather than just what everyone else uses for the bog-standard business practices (ERP, HR and bank reconciliation? Gosh, if only there were other places who needed those!).

I am of the opinion that government projects should come with a fixed deadline less than 5 years, a fixed budget, six-monthly audits on progress, and the project terminated if it doesn't mean two of those audit's expectation. And all projects should have that requirement. You want to bid for government projects? You better get on board.

If you can't do something in 5 years, or you slip for more than a year, you shouldn't be doing it.

This place actually seems to have a decent handle on things, for a local government project. "This isn't working, we want to know when it will work, how much it will cost, or we'll cancel it" should be the norm.

Re: So whose bright idea was it in the first place?

Chrispyyy

100% someone with shiny shoes came in from Oracle and delivered a presentation with pretty pictures to the smooth-brained senior management team. Anyone with an ounce of sense would've seen the word 'Oracle' and noped out of there.

Public Sector needs to learn to fail fast, but they need to be free of the shackles of politics to achieve this - and why would they risk their career by telling an elected official 'no' ?

Maybe bankruptcy will be accelerated when their VMware renewal comes through from Broadcom? ;)

Re: So whose bright idea was it in the first place?

heyrick

A very very fixed budget, that if something is supposed to balloon to over five times the original estimate, heads would roll.

But, alas, this is less about a functional IT system than it is about brown paper envelopes and scamming the system one is supposed to be overseeing.

Re: So whose bright idea was it in the first place?

Doctor Syntax

"My concern would be why is this some sort of bespoke project rather than just what everyone else uses for the bog-standard business practices (ERP, HR and bank reconciliation?"

HR and payroll should be common with other businesses. Rented property management will have commercial packages available, even specialist social housing packages have been developed for housing associations. But managing electoral registers or bin collections isn't something that a regular business requirement.

"Gosh, if only there were other places who needed those!)."

There are. Other councils. That's why it makes sense to sponsor a modular local government administration system; modular because the various functions are distributed differently between different tiers in different parts of the country.

Consultants

Chrispyyy

There is no incentive for the consultants to finish this project in a timely fashion, they will bleed Birmingham City Council dry. Just like Oracle has done.

Anyone who has worked in public sector knows that consultants are normally the kiss of death for any project. If in-house staff can't implement and support a system, how on earth is it going to be viable in the long term?

Seems like a money spinner for consultants. Do a crap job and they will keep calling them in to 'fix it', infinite money glitch???

wolfetone

" Philip Macpherson, a recently appointed Oracle program lead for the Council, said: "We are looking at doing some options analysis to genuinely weigh up the pros and cons around that to sort of underpin the case for reimplementation [of Oracle] and spec out the outcomes the council's after." "

Dear inmate, how would you like to run the asylum? Here, take the keys and here's the bank book.

Ditch the old new, in with the new new

b0llchit

Birmingham became Oracleham. If they now change,... will Oracleham become SAPham?

J.G.Harston

Dimming street lamps? You mean they're still using sodium incandescent lamps? I don't think the newer (cheaper to buy, cheaper to run) LED lamps are dimmable without considerable retrofitting.

"The Computer made me do it."