Oracle at Europe's largest council didn't foresee bankruptcy

Birmingham City Council turned disconnected information features connected its Oracle ERP system, meaning auditors person been incapable to motion disconnected nan accounts for Europe's largest section authorities body, which efficaciously went bankrupt earlier this year.

Earlier this month, The Register reported that nan £3.4 cardinal ($4.3 billion) gross statement declared itself successful financial distress aft costs for nan Oracle task ballooned from £20 cardinal to astir £100 cardinal ($125.5 million) pinch nan implementation of its replacement for an SAP ERP strategy still successful trouble. A measure of up to £760 cardinal ($954 million) to settee adjacent salary claims besides contributed to nan effective bankruptcy.

Speaking to members of nan council's audit committee connected Friday past week, Mark Stocks, leader of outer auditor Grant Thornton's nationalist assemblage assurance practice, said Oracle information features search changes to nan caller ERP strategy were not switched connected astatine nan commencement of nan implementation.

"When we look astatine immoderate audit, we effort and find whether nan IT power situation is due and whether we tin really spot what's happened wrong what we telephone 'the achromatic box'. For Birmingham, we can't do that. We person nary penetration into what's happened wrong nan halfway IT information systems because there's nary record," Stocks said.

Stocks said nan assembly could not springiness an "out-turn" position – an accounting measurement of activity aliases income – aliases nutrient a group of accounts for nan astir caller financial year. "All of that arises from nan Oracle implementation that we each cognize didn't work," he said.

The Register has contacted nan assembly for a response.

In July 2019, nan assembly picked Oracle Fusion Cloud to switch SAP for financial, HR and procurement processes. In March 2022, the assembly said nan implementation costs would emergence from £20 cardinal to £38.7 million. In May 2023, nan assembly said nan full costs whitethorn emergence to £100 million.

Despite concerns that nan strategy would meet nan council's needs and switch nan functionality successful SAP, nan assembly went live pinch Oracle successful April 2022.

Stocks said that since nan assembly started utilizing nan Oracle system, 1 of nan main problems has been rate management. The erstwhile SAP strategy took accusation from nan slope and past allocated nan cache to nan applicable ledger codes.

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"That adjustment was put successful for Oracle but didn't work. A batch of nan activity that officers person had to do is to manually move that rate into nan correct place. You've had complete 30 officers moving connected that for a important period. That's now reasonably accurate, but that's a tremendous task," Stocks said.

The original implementation partner for nan Oracle Fusion rollout was Indian systems integrator Evosys, now merged pinch Mastek. PwC and KPMG were appointed to thief rectify problems pinch nan strategy earlier this year, while nan assembly had antecedently employed EY connected nan implementation.

In June 2023, a Report to Cabinet said: "The assembly had planned to adopt nan Oracle system, changing its existing business processes and upskilling unit to support its implementation."

The study went connected to say: "This is what members gave officers support for done Cabinet papers successful July 2019 and March 2021. However, officers evolved nan attack towards adapting nan strategy – meaning that Oracle was customized to meet nan council's existing business processes. This displacement successful accent (from take to adaptation) has severely impacted upon nan council's expertise to decently instrumentality nan Oracle system."

In its astir caller advancement study connected rectifying nan Oracle implementation, nan assembly said it was moving pinch Oracle Consulting "to guarantee we present our 'out of nan box' Oracle vision."

An individual adjacent to nan implementation told The Register that utilizing nan modular aliases "vanilla" Oracle merchandise would mean that much unit would beryllium needed for moving processes than nan number employed for balanced activity connected SAP. For example, rate guidance had been handled by 3 group connected SAP, and, arsenic Stocks pointed out, it required 30 nether nan existent Oracle system.

In 2021, Oracle laminitis and CTO Larry Ellison singled retired Birmingham City Council successful a call to investors pursuing nan package giant's Q3 results. It was 1 of a litany of organizations he held up to exemplify large wins successful grabbing customers from SAP. ®