Whether to move off Oracle is the $100M+ question for Europe's largest public body

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Auditors of Europe's largest section authorities assemblage opportunity it's clip to determine whether to grind connected pinch a rollout of Oracle – an ERP task group to beryllium 5 times over-budget and which has shattered nan council's financial reporting – aliases take different system.

Late past year, Birmingham City Council (BCC) effectively declared bankruptcy owing to nan IT disaster mixed pinch a staggering number of equal salary disputes making love backmost much than a decade that are collectively expected to costs opwards of £1 cardinal ($1.27 billion).

After a delayed and over-budget project, BCC went unrecorded pinch Oracle Fusion ERP package for its main finance, HR, and payroll strategy successful April 2022. In May past year, it announced a rescue scheme that would put nan task fund astatine astir £100 million ($127 million), 5 times nan original estimated cost. And successful a assembly gathering past week, nan auditor reported that nan strategy is still not "safe and compliant" successful position of financial reporting and ineligible requirements, missing a November deadline.

Mark Stocks, Grant Thornton West Midlands nationalist assemblage leader, told councillors that unless it tin beryllium demonstrated that manual workarounds for nan Oracle strategy are safe and compliant for nan adjacent financial twelvemonth [2024/25] starting successful April, nan audit squad would not beryllium capable to rumor an unqualified audit for that year.

"Actually having a functioning finance strategy for 2024/2025, including budgets, is perfectly crucial," he told councillors.

Yet location is besides nan thorny problem of whether to proceed implementing Oracle, aliases wound nan slug and spell pinch different solution. From 2019, nan assembly had planned to adopt nan Oracle strategy pinch fewer modifications, replacing a heavy customized SAP system. However, officers later decided to accommodate nan strategy and constitute modifications, immoderate of which failed, starring to onerous manual workarounds and inaccuracies successful reporting.

In June 2023, the assembly promised an optimization plan – to travel its safe and compliant workstream – "that will revert to a much 'out of nan box' Oracle solution."

In their December report, nan council's auditors drew attraction to nan challenges progressive pinch this "optimization" plan.

"From our interviews, it appears that nan superior attraction is connected establishing a caller 'clean' Oracle instance, pinch a phased transportation from nan existent version. There are important method considerations and financial implications of this approach. Other options whitethorn connection a much applicable and worth for money solution," the study said.

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In beforehand of councillors, Stocks was asked whether nan section authority was "throwing bully money aft bad" successful continuing to instrumentality Oracle.

"That's nan determination I want you to make," he told nan councillors. "That's my concern: I would person expected you by this constituent to person made that determination arsenic to whether ... do we extremity aliases do we do thing else? The optimization process isn't location yet, and that's what you request to get to quickly because it's each taking excessively long."

Any determination to move distant from Oracle would beryllium a individual embarrassment for laminitis and CTO Larry Ellison, who successful 2021 named Birmingham City Council arsenic a successful statement triumph complete SAP.

The audit study said nan assembly needs to understand whether modifications to Oracle were made to get it to execute for illustration nan erstwhile SAP system, aliases whether they were needed to "deliver an effective and businesslike solution" for nan council.

"Our existent knowing is nan attraction is connected a caller Oracle high-level design, but we are not clear connected how, erstwhile and by whom nan different areas are being considered earlier nan sign-off for a low-level design. The cardinal consequence is [the council] cannot spend to adopt Oracle processes retired of nan box," nan study said.

Instead of modifying Oracle, nan assembly is looking to bargain much package to reside its short-term problems. One of nan awesome problems nan statement deed erstwhile it went unrecorded was pinch nan Bank Reconciliation Solution (BRS). As of September past year, it is estimated that an correction successful a modification led to unallocated transactions pinch a nett worth of £74 cardinal ($93.7 million). The assembly is presently spending £500,000 ($635,000) per period hiring impermanent unit to lick nan problem.

"A specification process has been started for nan replacement of BRS pinch modular Oracle functionality supported by master income guidance software. From procurement to implementation, it is estimated replacement of BRS will return up to 12 months erstwhile afloat approved. It is apt that location will beryllium nary afloat moving rate strategy until early 2025. During this procurement manual workarounds will still request to beryllium successful operation," nan audit study said.

We asked Birmingham City Council to comment, and were told officials person pledged to respond to nan audit study and its recommendations. ®