Europe's largest local authority slammed for 'poorest' ERP rollout ever

UK government-appointed commissioners have labeled Birmingham City Council's Oracle Fusion rollout as "the poorest ERP deployment" they have seen.

A report published by the UK council's Corporate Finance Overview and Scrutiny Committee found that 18 months after Fusion went live, the largest public authority in Europe "had not tactically stabilized the system or formulated clear plans to resolve the system issues and recover the operation."

The city council's cloud-based Oracle tech replaced the SAP system that it began using in 1999, but the disastrous project encountered a string of landmark failures. The council has failed to produce auditable accounts since Oracle was implemented in 2022, costs have ballooned from around £19 million to a projected estimate of £131 million and, because the council chose not to use system audit features, it cannot tell if fraud has taken place on its multibillion-pound spending budget for an 18-month period.

In September last year, the council became effectively bankrupt due to outstanding equal pay claims and the Oracle implementation.

The report from "best value commissioners" appointed by central government to investigate struggling councils said that following the Oracle implementation, "a serious lack of trust had developed between members and officers driven by the failed implementation and subsequent lack of progress to resolve the situation."

In October 2023, the council launched a recovery strategy that "identified a lack of effective governance and control of the Oracle program, a severe lack of Oracle skills, experience and capabilities across the council, with a lack of direction and ineffective leadership compounding the problems," according to the report, which was completed in April and presented to the committee this week.

The council has since appointed a senior responsible owner for the project, CFO Fiona Greenway, and program leader Philip Macpherson. The council initially customized Oracle but now plans to reimplement the software out-of-the-box, adopting standardized processes. It aims to complete the reimplementation of Oracle in 2026.

The commissioners responsible for the report include Myron Hrycyk, former group CIO of water company Severn Trent, and former IT director at Unipart.

The report said: "The organization must rebuild its corporate core, consolidate key services, and transform its target operation model. Key to doing this successfully is fixing the mess created by BCC's disastrous attempt to implement Oracle. There are early signs of progress in this program, but it will be some years before the council regains full control of its accounts."

Yet it raises points about who should be held accountable for decisions made regarding the Oracle ERP system's initial rollout.

"Serious questions must now be asked about statutory roles, including the legality of a section 25 statement that was written for a budget that provided limited room for inflation, failed to adequately provide for the equal pay liability, and a meager provision for an Oracle implementation that was in freefall," it said. ®