UK council still hadn’t fully costed troubled Oracle project 2 years in
UK council still hadn’t fully costed troubled Oracle project 2 years in
Meanwhile, the West Sussex County Council budget clambered from £2.6M to nearly £40M, says a newly released report.
Published on 28th November 2024
A UK council had no fully costed and resourced plan in place to deliver a critical Oracle ERP project two years after beginning an SAP-replacement program, one which has seen years of delay with costs set to climb to 15 times the initial budget.
According to an independent audit, West Sussex County Council also failed to ensure it had adequate assurance it could manage its Oracle ERP project or its systems integration partner, DXC.
In November 2019, the council set out to replace the SAP ERP system it had been using since 2001. But, after a series of delays, the new Oracle software is not expected to go live until December 2025, with an estimated budget climbing from £2.6 million ($3.2 million) to nearly £40 million ($50 million).
An independent external audit report from EY presented to the council last week found that in the 2022/23 financial year, it did not have adequate arrangements to “provide assurance that either the replacement business management system itself, or the contractual arrangements with” systems integrator DXC were “delivering the expected benefits”.
The report from external auditors EY added:
As of April 2023, there remained no fully costed and resourced plan in place to enable delivery of the program to completion. Internal audit were advised that this was due to the pausing of the program as a result of the commercial discussions with DXC and the data migration issues being experienced.
DXC was awarded the initial contract in June 2020. However, in December the same year, an external consultancy firm, Socitm, recommended a re-set of the program. In September 2021, an internal audit found a “fully resourced and costed plan to enable delivery of the program was not in place.”
The EY report describes how, in 2023, internal audits continued to find problems with the project and “further difficulties in the relationship between the council and DXC.” By July the same year, the council had decided “there was no real prospect of a deliverable plan being agreed and that that it should give notice of termination of the contract with DXC.”
“A settlement was agreed between WSCC and DXC where only resources and services provided would be paid for. The relationship between the two parties officially ended on 1 September 2023,” the report said.
Expenditure on the project at the end of October 2023 was approximately £13 million ($16.3 million), it said.
Following the end of its contract with DXC, the council began the competition for a replacement systems integrator. Earlier this month it inked a £5.8 million deal with Infosys, set to last for two years.
In April this year, the council’s Performance and Finance Scrutiny Committee reported that the revised project would see a new Oracle Fusion cloud-based ERP system go-live for the different elements for December 2025 and April 2026.
The EY report recommends the council builds on the “good work” done in 2023/24 and learns lessons from the ERP project to date.
It also says the council should “clearly establish revised programme and budget management arrangements for the project sufficient to gain comfort that both timetables and budgets for delivery are both realistic and adhered to.”
