Birmingham: There is a lesson for every CIO

A few years ago, Oracle announced a big win, when it was selected by Birmingham City Council to replace a heavily customised SAP system, which was originally implemented in 1999.

Socitm advisory was hired by Birmingham City Council to help it run a procurement process through the CCS Framework (Crown Commercial Services). This included, among other things, advice on the evaluation of software products offered by suppliers.

The contract was awarded to Insight Direct (UK) Ltd, in partnership with Evosys, on the basis that the pair would deliver what Birmingham City Council’s Report to Cabinet in 2021, described as “a new solution” based on the Oracle Cloud ERP.

This report illustrates the challenges in migrating from an older version of an ERP system to a rival product. It highlights staff turnover issues, which impacted the level of Oracle knowledge available. It shows deficiencies in the programme delivery processes, which resulted in an Ernst & Young led Assurance Review that called for changes to governance. It points to the delays to the Oracle go-live date. This meant the council needed to migrate the old SAP system to newer hardware and software and pay a further £1.1m to SAP for continued maintenance and support.

The Oracle system is now live but the council is facing major challenges. Its latest report to the city council’s cabinet, shows that the council needs a further £45m for significant work required to stabilise and improve the operation of its Oracle ERP and HR system. This report, which was posted online, shows that the council has experienced significant issues with the Oracle system since it went live in 2022. For instance, significant difficulties remain around the financial integrity of the finance ledger. The report states: “Simply put, the system is still posting transactions incorrectly and significant manual work is required to ensure that the finance system is accurate.”

This has led to an additional six-month delay in closing the prior year accounts, as the finance team needed to manually adjust inaccuracies in the ledger, to ensure transactions were posted to the correct cost centres. The report states that the delay in closing took up significant finance team resources and has meant that production of the 2022/23 accounts were delayed.

Birmingham is unlikely to be the last organisation facing major issues with an ERP migration: lack of skills, rising costs, delays and the need to continue supporting the old system. It has not hidden these things and the assurance review and use of professional services in the tender process shows it was trying to get things right. These public documents illustrate challenges every CIO faces when running major, multi-year implementation projects. One hopes others will benefit from the insights they reveal.