Europe's largest city council: Oracle ERP allocated £2B in transactions to wrong year The Oracle finance system implemented by stricken Birmingham City Council allocated £2 billion ($2.65 billion) in cash to the wrong financial year, leaving public sector workers to unpick the errors manually. Europe's largest local authority has been made effectively bankrupt by a combination of the self-inflicted messy ERP …
And who is going to pay that bill???
All parties will simply say that they were paid for services rendered. The contract may have originally stated that the result must work as advertised, but the target shifted so many times that the clause was rendered unobtanium and rendered ineffective. See, we, the hard working software class and consultancy parties can not be blamed in any way.
It would have been funny if it wasn't so sad.
Work can in principle e outsourced, though whether it *should* be seems to be a different and rarely addressed question.
The responsibility >>>cannot<<<< be outsourced (just ask Boeing, or indeed any of a near-endless list).
Somebody must always be accountable. Preferably namied individuals in named organisations.
Birmingham ratepayer for 4 decades,
That unfortunately is how Oracle works. Out of the box it's pretty much as useful as a chocolate fireguard and millions of hours of consultants and specialists needs to be bought to make it useable. Great model if you're Oracle and one of its consulting partners. It's a total swizz and many people are in on it.
This is how ERP providers make all that lovely cash that allows Larry to keep buying islands:
* 01: Create an ERP system where everything can be configured, customized, and controlled
* 02: Pitch it to potential customers, all of whom have exceptionally complex existing ERP systems that have a number of flaws
* 03: Sell them on the low low cost of the unmodified system, with a small additional cost for "minor customizations"
* 04: Begin implementation, which will take 2+ years
* 05: Collaborate with the client. If they are a public body, talk to everybody, especially elected people
* 06: Gather a thousand new requirements and change requests
* 07: Nullify any existing clauses on performance, delivery, correctness due to so many change requests
* 08: Deplete the original budget, leaving the platform 50-80% integrated - you tell the client its 80%, but you know its really 50% done
* 09: Force the client to either extend the budget or cancel, leaving them with their currently unsupported legacy ERP
* 10: Deplete the new budget
* 11: Complete/cancel the project, or go back to step 09
* 12: Go to step 1
So it is really about human system complexity, not about software.
This resembles Soviet central planning with their giant Gosplan authority specifying in detail how much of a particular good should be produced. It also reminds of NVIDIA Omniverse, when the government is trying to replicate real world with a digital clone.
Basically the gov is taking over and replacing the capitalist economy. Have a look at the enormous list of "1600 activities local authorities are responsible for" Spawn of Seaton posted here.
It seems to me they are suffering from the age-old wisdom of "if you buy an off the shelf system do not customise the buggery out of it to suit your processes" because that just never ends well and upgrade/implementation costs go to the moon - you're locked into the system and the vendor knows they have you by the jacobs.
That's what happens with Oracle, it's to be expected. You can't rely on them to implement a system, they make more money correcting mistakes they see being made than they do by doing it right the first time.
This is nothing new, this is how companies like Oracle become so large and wealthy - screwing the customer to the point they drain the cash, making it difficult to migrate elsewhere. It's one of the benefits of an ERP system, for the vendor.
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School term and holiday dates; School transport; School visits; Schools - permitted exemption (from curriculum); Schools development plans; Schools forum; Scientific services; Scottish Parliamentary information; Scrap metal processing licence; Scrap metal site registration; Seat belt and helmet medical exemptions; Second hand dealer registration; Secondary school places; Securing premises after fire; Selective area housing licences; Selective housing areas;
Self drive boats licence; Self-build and custom build register; Self-build approval; Sensory rooms and activities; Septic tanks and cesspits; Service delivery consultation; Severe weather warnings; Sewerage; Sewerage and drains - notification; Sex establishment licence; Sexual health; Shared care for adults; Shared care for children and young people; Shared home ownership; Sheltered and supported housing; Sheltered housing - older people; Shop front improvement grants; Short breaks; Shotgun certificates; Single Shared Assessment; Skills for living; Skip hire; Skip operator licence; Skip permits; Slaughterman licence; Smallholdings; Smoke control areas; Smoking ban; Snow clearance; Social care financial assessment; Social clubs and groups; Social Enquiry reports; Social housing policy; Social landlord registration; Soil excavation; Solicitors practising certificate; Solvent emissions registration; Solvent emissions regulation; Spatial development strategy; Special educational needs assessment; Special educational needs placement in mainstream school; Special educational needs transport; Special guardianship order; Special library collections; Special needs library facilities; Special provision capital fund; Special school approval; Specialist equipment and support for disabled people; Specialist rescue services; Speech, language and communication therapy; Speed humps; Speed limits; Spending plans consultation; Sports - facilities - information; Sports - pitches and courts; Sports clubs and groups; Sports coaching; Sports development; Sports employment; Sports equipment hire; Sports facilities; Sports grants; Sports grounds safety certificate; Sports stands safety certificate; SQA qualifications centre approval; Staff - accommodation; Staff - annual leave; Staff - appraisal; Staff - apprenticeships; Staff - benefits; Staff - business travel; Staff - consultation and feedback; Staff - continuing professional development; Staff - disciplinary procedures; Staff - disclosure of interests; Staff - employment tribunals; Staff - equal pay; Staff - expenses; Staff - grievance; Staff - job analysis; Staff - medicals and health screening; Staff - occupational health; Staff - operational exercising/training; Staff - outplacement; Staff - overtime; Staff - payroll; Staff - pension scheme; Staff - procedures; Staff - public holidays; Staff - recognition; Staff - recruitment; Staff - recruitment process; Staff - redeployment; Staff - references; Staff - reorganisations; Staff - risk management; Staff - sickness management; Staff - telephone charges; Staff - time management; Staff - training; Staff - victimisation; Staff - workplace bullying; Stage hypnotism licence; Standing advisory council on religious education (SACRE); Stations, stops and shelters; Statutory development plans; Statutory nuisances; Staying put arrangement; Stillbirth registration; Stopping smoking; Stopping up orders; Stray animals; Street cafŽ licence; Street cleaning; Street collection licence; Street entertainment licence; Street furniture; Street lighting; Street name plates; Street names and numbering; Street parking enforcement; Street parties permission; Street trading licence; Street vote development orders; Street works licence; Student accommodation; Subsidised health insurance; Subsidised travel; Sudden death investigations; Sunday trading notification; Supervised medication in school; Supervising attendance orders; Supervision order; Support for children in care; Support for gifted children; Support for tourism businesses; Support for young people leaving care; Support when leaving education; Supported employment for looked after children; Surface water management plans; Surveying; Sustainable development; Sustainable drainage systems; Swimming pool and spa pool monitoring; Swimming pools and water based activities; Syringe disposal; Tattooist, piercing and electrolysis registration; Taxi fare setting; Taxi ranks; Teenage pregnancy; Teenagers' library services; Temporary accommodation during major works; Temporary event notice; Temporary passport; Temporary private house letting; Temporary structure fire safety; Temporary travel document; Tenant housing alterations; Tenant participation; Tenant references; Termination of highway rights; Throughcare; Toll roads; Tourist accommodation certificate; Tourist information centres; Tourist signs; Towing for marine vessels; Town centre CCTV; Town centre crime prevention; Town twinning; Toy libraries; Track betting licence; Track gambling premises occasional use notices; Trade effluent discharge licence; Trade mark agent or attorney registration; Trader approval schemes; Trading standards - dispute resolution; Trading standards advice to businesses; Traffic lights; Traffic schemes; Transition between schools; Translation and interpreting; Transmissible spongiform encephalopathies testing laboratory licence; Transparency of accounts; Transparency of senior salaries; Transport policy; Transport service disruption information; Transport tickets and passes; Transport timetable information; Travel plans; Traveller children support; Tree management; Tree preservation orders; Unauthorised house occupants; Under age sales; Universal credit; University licence; Unoccupied dwelling licence; Utilities regulation; Vacant land and property; Vaccinations; Value for money; Vandalism prevention; Vehicle clamping and removal; Vehicle end of life treatment licence; Vehicle immobiliser licence; Vehicle testing licence; Verge maintenance; Verges permitted use; Veterinary medical products marketing authorisation; Veterinary nurse listing; Veterinary surgeon licence; Vetting of contract and supplier staff; Victim support; Video sales licence; Visas and travel permits; Visitor accommodation and holidays; Vocational training; Voluntary adoption agency registration; Voluntary property acquisition; Voluntary sector transport licence; Volunteering; Voting; Wall maintenance; Warm homes healthy people; Waste broker registration; Waste carrier (scrap metal) licence; Waste carrier registration; Waste disposal manager permit; Waste electrical and electronic equipment licence; Waste local plan; Waste management licence; Waste oil burner licence; Waste packaging licence; Waste reduction; Waste search and removal licence; Water abstraction licence; Water discharge licence; Water fluoridation schemes; Water height monitoring; Water network extensions; Water pollution; Water quality monitoring; Water transportation and supply licence; Water/flood rescue; Wedding venue licence; Wedding venues; Weighbridge operator licence; Weights and measures; Welfare rights advice; Wild and protected bird licence; Window cleaning business licence; Window cleaning employee licence; Work experience placements; Work health and safety advice and training; Work permits; Work with ionising radiation notification; Workplace fire regulations; Workplace parking levy; Yellow lines; Young carers support; Young people - employment - medical examination; Young people's learning prospectus; Young Scot Card; Youth court procedures; Youth justice plan; Youth leadership training; Youth Opportunity Fund; Youth project volunteering; Youth Rehabilitation Order; Zoning; Zoo licence; Zoos and farm parks; Children's certificate; Council tax benefit appeals; Council tax benefit backdated claims; Council tax benefit current claim; Council tax benefit new claim; Council tax benefit overpayments; Council tax benefit renewal; Criminal behaviour order; Death - historical searches; Fire certificates - factories; Fire certificates - hotels/boarding houses; Fire certificates - offices; Fire certificates - shops; Geotechnology; Hazardous substance control; Independent funerals; Marriage - historical searches; Occupational health services; Older people's bus pass; Parks and open space landscaping; Pig movement notification; Ports of entry - detention; Property deeds; School transport - additional support; Sheep and goat movement licence; Sporting club grants; Starting work benefits; Test and Trace Support Payment; Trading standards education; Witness support; Young people's organised activities; 16 to 19 bursary fund.
This list is probably a little out of date. If anything it would be longer today. Central government and the Civil Service have long used local government as a convenient dumping ground for regulations, saving them (central) the effort of acually creating and funding agencies to do the work.
The list doesn't distinguish between obligatory and discretionary expenditure.
Impressive list and makes the point but seems shaky on detail - “Midwifery and maternity services” were indeed a local authority responsibility last century but were subsumed by the NHS long ago, according to the midwife I’m sitting next to. ‘Short breaks’ and ‘Armed forces recruitment’ are hardly direct responsibilities, and National Identity Cards still aren’t a local UK thing, are they?
Why do the same companies keep getting these contracts?! Capita promised £1 billion of savings & actually ended up costing £1 billion! Just put a rule in...don't deliver on time and on budget you don't get any government contracts for 10 years!
There is zero incentive for any of these firms to do any work well because they know they'll get more money if they screw up....Oracle should be 100% on the hock for this cost
This is the biggest problem with these sorts of contracts in my experience.
Your company goes to $vendor and say "I would like to buy a product that does X, Y, Z - what can you sell us and how much discount can we get?"
A sales drone from $vendor says "We have a lovely product DWH2.0* that does not only X, Y, z(sic) but also optionally A, B, C and we can sell it to you at an excellent price"
then someone who's paying attention points out that Z and z are actually not the same thing, but it gets glossed over by some managers who got terribly excited about the idea of at least one of A, B, and/or C despite no one who's going to use to tool caring in the slightest about that.
So now the contract gets signed, with $vendor saying "We promise to provide DWH 2.0 which does X, Y, z, and A in 18 months and for a large sum of monies."
Then the thing shows up and the person who pointed out that z and Z aren't the same thing is proven absolutely right and whoever's in charge - which at this point may well not be the same person who signed the contract in the first place - goes "Oh shit, that thing we bought doesn't actually work. Um, $vendor, how much to get Z implemented as well?" At which point the thing that should have been part of the contract from the get-go is now added in at a massive additional cost and a 9 month delivery slippage.
Sometime during that extended, now 30 or more month, period some other idiot, who got too excited during the initial sales pitch, suddenly realizes that B and C aren't included. "Well, No" - says $vendor - "You didn't pay for those and we did say they were optional..."
...which is the point we discover that they're actually not optional any more, because in the intervening months this new idiot has been basing all their decisions around the idea that the new product would have B and C because they didn't read the actual contract but the nice sales rep sure did spend a lot of time talking about B and C in the initial pitch.
So now we need to get a price for B and C - oh, and by the way, since this project is now well over a year behind schedule we actually need D as well, which wasn't any part of the initial pitch but our requirements have changed because getting this implemented has taken so long.
"Sure!" says $vendor "But D is going to require a major change and we can backport it to DWH 2.0 - but it would be much better you bought DWH 3.0 instead which is finally out now, and will only cost an additional 10% on top of your original contact's per-month price!"
"Oh no! goes basically everyone, that's far too much money, how much for the backport?" To which the real answer is "Fuck if we know, the sales drone pitched it without actually asking engineering if it was possible to do a special custom version of DWH that was basically version 2 but with one of the big features of version 3 shoe-horned in there" so hands get waved and everyone is assured that it'll definitely be cheaper to some extent...
...which after another 12 months of messing about by the engineering department at $vendor to try and get this shit working it's discovered that no, it's definitely not going to be cheaper, but we've still paid for the proof of concept work, and to start again with DWH 3.0 now would be even more expensive.
So now here we are, two full years after the initial contract should have already been delivered and we've paid the full cost, plus a bunch of additional un-planned "upgrade" costs, the thing still isn't here, we're looking at at least another year to get a special weird and impossible to properly support version of DWH 2.0 with only some of the benefits of 3.0 and oh look, 4.0 is out now and that's a whole new thing and 2.0 is going to be retired the year after next so your original contract won't be valid anyway and you'll need a special extended support contract for even more money.
By this point all the people responsible for the initial decision have long since fucked off and all the staff who just wanted X, Y and Z to get their jobs done are many years more entrenched in the (almost certainly Excel based) workaround they put in place to deal with the fact that the old DTAH** system didn't handle Y terribly well, and have added another bunch of stupid shit on top of that which means that when we finally get DWH 2.1.043.misery.q4 actually delivered, it doesn't do what they want it to anyway.
All of this shit could have been avoided if everyone involved actually read the exact specification and contractual obligations but since that has never once, in the history of procurement, ever actually fucking happened we're stuck with this sort of nonsense happening over, and over again forever, and asshole sales drones keep on selling things that don't actually exist to idiot managers who keep buying things that don't actually do what they want.
/rage.
* Disaster Waiting to Happen
** Disaster That Already Happened - because that product also went through this exact same bullshit procurement process
My former boss once bought 400 Dell laptops for a desktop -> laptop / home working migration. He didn't like the original quote, asked them to get it £50/unit cheaper. They did, he approved the PO, 400 laptops turned up - and at that point we found out that they had got it cheaper by removing the webcam from the spec - we had 400 home working laptops that were not suitable for home working!
Out of all the parties, I'd say (begrudgingly) Oracle is least to blame. All thought the RFP process Oracle would have stressed the "adopt, not adapt" approach and no doubt the senior stakeholders within Birmingham CC would agree.
Only once the solution is chosen and the programme initiated does the requests for customisations begin.
"The council's current focus is on fixing issues going forwards rather than addressing former problems."
In other words, they have absolutely no interest in identifying the people responsible for this cock-up, or in preventing similar mistakes working again. I used to work for a boss who who say, firmly, "I'm not interested in archaeology" whenever the dire results of his incompetence were analysed.
Why aren't people switching to alternatives? There are many of them out there at half the cost and twice the flexibility.
Oracle needs a ungodly amount of bespoking to make it work, creating lots and lots of billable hours for consultants and specialists to make margin rich millions, while at the same time locking you in because it's incredibly complex to unravel when the contracts are up. "Now you're trapped with us, so here's your bill and you'll shut up and pay it!" I see Government departments fall into this trap time and time again.
One day the madness will stop...
"Why aren't people switching to alternatives? "
I'd love to switch to an alternative council - I'd be a grand a year better off if Wandsworth collected my council tax. Unfortunately the f*****s have a local monopoly, and I'm stuck with the blighters in the place I live. However, if I'm an Uber driver anywhere in England I can get my licence cheaply from Wolverhampton City Council. Curious how the benefits of competition aren't available to the taxpayer.
There’s a reciprocal agreement in the Midlands, Krakead, which means hire cars registered in Wolverhampton can operate in counties that make registration more difficult and expensive. Hence here in Warwickshire almost all the Ubers appear to have come from the other side of the West Midlands. They haven’t really.
If the transaction it relates to is from the prior year, this means the cash posting is sitting in the wrong year and the accounting records would be incorrect. In [the financial year] 23/24, £2 billion in transactions [were] posted in the wrong year which required correcting manually," the report says.
Why doesn't this even work? What a fuck up.
That is on the brink of bankruptcy due to a certain person who likes to "Brew" his own bullshit ideas and moved to Google many years ago. It was never a good idea and one knows it has cost them LOTS of money. This is the problem with councils when you get someone who's got their own pet project they want to place on their CV. They push it through, ignoring the costs. They are now paying for that mistake. The ex-corrupt CEO also didn't help.
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