Birmingham City Council has pushed back the relaunch of its troubled Oracle Fusion ERP system, saying staff need more time to adapt to the vendor's standard processes.
The rollout at Europe's largest council follows a disastrous go-live of Oracle Fusion in 2022, which left the authority unable to produce auditable accounts and contributed to it becoming effectively bankrupt. The total cost of moving to Oracle has gone from an early business case estimate of £19 million to around £131 million.
In 2020, the council planned to replace a legacy SAP system with a standard Oracle implementation. However, the project evolved to include extensive customizations, including a Bank Reconciliation System that ultimately failed to function properly. When these failures prevented the council from filing legally compliant accounts, it reversed course, reimplementing Oracle 'out of the box' and adopting off-the-shelf third-party software for bank reconciliation, which it renamed Income Management.
The replacement was expected to go live in April for the new financial year, but in a written briefing to councillors last week, officials said the council had decided to delay the launch until at least the summer.
"It became clear that focusing on an April go-live date would increase risk," said the statement seen by The Register.
"As the programme moved through end-to-end testing, getting the data and operations ready, we planned a stocktake. We have listened to our colleagues, who are doing a brilliant job on preparing the council through system testing, and championing the changes to council processes, and reviewed our progress on testing and readiness."
The communication also said that ensuring the accuracy of staff pay was "one of the main reasons for re-planning the go-live date." Council officers argued it was a "timeline decision" and "a risk-reduction measure" based on "evidence from readiness reviews." They maintained it was not resetting the program or changing its scope.
The council removed schools from the scope of the reimplementation project in May 2024, although costs have continued to rise.
The council said further formal governance decisions are scheduled for later this month, and an independent assurance process will check that the program is ready to go live.
In a statement, Councillor Robert Alden, leader of the Conservative opposition, said: "Perhaps the saddest part of all this is how predictable it was that Labour would again fail to meet their own target. This is an administration lacking leadership and seemingly unable to get anything right. We now know the Council will go into next May's local elections without a functioning finance system."
A council spokesperson said: "This decision reflects the council's focus on ensuring that the reimplementation goes smoothly and the programme is successful – prioritising readiness and stability over fixed dates. There is no impact on the running of the current system and services will continue to function as they are now, with colleagues and suppliers still being paid."
The reimplementation budget included a contingency to accommodate some changes, therefore costs are not expected to increase, the spokesperson said.
"The council is taking a staged approach to the reimplementation, with independent assurance at agreed checkpoints. We will continue to test whether we are progressing as expected and meeting all the milestones required, as we recognise the importance of getting this program right."
On April 11, 2022, Birmingham City Council went live with the new Oracle ERP system - due to manage its £3 billion taxpayer funding and multibillion-pound spending - against the advice of the Financial Impact Assessment, which was seemingly missed by the Steering Committee at the time. It warned that going live with Oracle could create "major problems transacting leading to late payment or collection of debt."
According to the auditor's statutory recommendations report, testing remained incomplete because the system was not stable enough.
The implementation of Oracle was expected to save the council money. Total losses compared with expected savings could be as high as £216.5 million, the auditors found. ®
Source: The register