UK authority struggles to RISE with SAP, throws another £9M at project

A South West England authority continues to suffer control weaknesses in its ERP system after the council delayed the project by more than a year and more than doubled the expected costs.

Gloucestershire County Council said in a meeting last month there were a number of control weaknesses in SAP ECC - which first went live in 2007 - including issues with the segregation of duties within SAP.

The replacement system - a cloud implementation of SAP's S/4HANA - was first set to go live in December 2023 after the council signed a £7.3 million ($9.5 million) deal to join the vendor's flagship RISE with SAP cloud migration program.

The council subsequently committed to go live with the new system at the beginning of March and then by the beginning of the 2024/25 financial year, on April 6. It missed both deadlines.

In July, the council approved a decision to extend the term of the ERP implementation program by up to 12 months "with a target implement date of end March 2025."

It said the extension was necessary "for the purpose of enabling the council to resolve outstanding system configuration, automation and testing issues which, if unresolved, would result in reduced ERP system functionality and potential system failure."

The council's cabinet also approved additional funding for the program of up to £8.75 million ($11.4 million) to deliver to the revised timeline. And it plans to renegotiate and extend the agreement with HCL, the implementation partner.

In a document supporting the decision, the council said the project had "proved to be more complex than originally envisaged."

It said the plan from 2021 was scoped and costed on the basis that the move to cloud-hosted SAP was equivalent to a technical upgrade.

"It became clear that this was not the case, and the program was closer to the implementation of a new and complex system," it said.

The project also had to cope with changes to rules in the Procurement Act 2023, which introduced a range of new requirements that need to be automated into the new system.

"These delays resulted in insufficient time for comprehensive systems testing and delays in user testing and training," the document said. "It also became clear that the change management activities were significantly under-estimated. From this review, it became apparent that the go-live date of 4 March 2024 could not be achieved without significantly reducing system functionality and increasing the risk of system failure."

Late last month, the council's Audit and Governance Committee said the council continued to face weaknesses in financial control because it had to wait for additional functionality expected in the new ERP system.

When Gloucestershire County Council joined the RISE with SAP program in 2022, Steve Mawson, the executive director of corporate resources, said: "After considerable market evaluation, SAP stood out as not only meeting these requirements, but as offering the best value for money and providing the crucial future-proofing element that we needed. As the first RISE with SAP customer in the UK public sector, we're excited to be paving the way for other public sector organizations looking to modernize their services."

The Register has asked the council to comment. ®