Birmingham looks into reimplementing troubled Oracle ERP

Birmingham City Council’s troubled Oracle system is facing reimplementation as part of a recovery programme that aims to have a functioning financial system by 1 April.

The Oracle system was meant to replace a heavily customised SAP system that was originally implemented in 1990. But a council report published in 2021 shows that due to delays and problems with implementing the new enterprise resource programming (ERP) system, Birmingham needed to extend maintenance on the SAP system, which also needed to be upgraded and rehosted on new hardware while the Oracle issues were being fixed.

In the minutes of an audit committee meeting that took place on 31 January, the council stated its commitment to adopting Oracle best practice processes and configuration for the reimplementation.

Last week, a report prepared by Peter Sebastian, the council’s head of financial planning, was posted online. It shows that since the implementation of the Oracle system in April 2022, there have been significant issues with the processes and interfaces, as well as the system’s ability to produce what Sebastian calls “meaningful reports”. In the report, he wrote: “Simply put, the system is still posting transactions incorrectly, and significant manual work is required to ensure that the finance system is accurate.”

On 21 February, Birmingham City Council Audit Committee published a review of an external audit report from Grant Thornton that assessed value for money in the implementation of the Oracle system.

During the audit committee meeting, Fiona Greenway, Oracle senior responsible officer and finance director at Birmingham City Council, said: “One of the most fundamental issues is around us agreeing to an income management system that will allow us not to have lots of manual workarounds.”

The committee stated that while it welcomed the aims and ambitions of the council to manage the recommendations covered by the Grant Thornton report: “In the recent past, the council has not demonstrated the ability and capability to deliver on such aims.”

The audit committee asked the council to provide updates and a more detailed action programme with target dates and responsible officers.

Philip Macpherson, Oracle programme lead at Birmingham City Council, said the assurance being built into the Oracle programme is based on a model that incorporates assurance into approvals. “As we move forward in terms of reimplementing and taking actions to address issues, we join up the approval and assurance process so those two things are linked in terms of setting out the criteria for success,” he said.

When asked to estimate the number of days of Oracle consulting required to have the system ready by the go-live date, Macpherson said: “I can’t say today. We are looking at doing some options analysis to weigh up the pros and cons underpinning the case for reimplementation and actually specify the outcomes the council is after.”

Councillor Meirion Jenkins, who spent 18 years running a Microsoft Dynamics reseller business, responded to Macpherson’s answer: “To summarise what we’re saying, we have a train crash of an accounting system that’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.”

Jenkins described Macpherson’s response as “incredibly unpersuasive”.

While he acknowledged it was not Macpherson’s fault, Jenkins added: “I cannot imagine a situation where I am sat in front of the finance director of a business and he is paying me to sort out his implementation and [asks], ‘How much and how long?’, and [I say], ‘I don't know, mate. It will be as long as it takes and it will cost as much as it does’. I can imagine how long my engagement would last if I responded to his question in those terms.”

Jenkins pointed out that the longer the project takes to complete, the more the Oracle consultants will get paid. He implied they have an incentive to keep the project going for longer.