City council faces £216.5M loss over Oracle system debacle | Hacker News Reader

City council faces £216.5M loss over Oracle system debacle

theregister.com

35 pointsronyba20 comments

> It is set to re-implement an "out of the box" version of the solution after customizations in the first effort disrupted its bank reconciliation system.

Root cause.

When you buy from an ERP vendor, you are not just buying software, you are buying a logical model of an idealized corporation. If that model doesn't reflect your actual organization, you can try to customize the software, but beyond some threshold of mismatch, it's easier to change your accounting & control & governance processes to match the software.

SAP and Oracle are no different in this respect.

Also this goes beyond just ERP - core banking packages like Temenos or Avaloq are the same. They have something called 'model bank' which is some default simple model of common expected behaviors, workflows etc.

But almost none of the banks actually work like that, apart form some small insignificant shops which can't afford such customization. Each has some unique stuff that makes it better than most competition in that area. Behemoths of banking world run their pretty unique things, workflows, specific jurisdiction reporting etc. so each of them have more or less massive customization on top of basic common stuff.

I guess it goes without saying almost constant flow of changes, either from business or regulators keeps hefty IT teams busy to maintain that customization and ensure things keep working. Also logically the complexity has only one direction to go, and so it goes, slowly but surely.

I am not even sure if business properly realizes all this, maybe they do or maybe they are kept in continuous cloud of bullshit from IT managers who of course want to preserve their jobs and importance (headcount, impact) within corporation. Anyway the prospect of migration to something else is something they (rightly) detest and want to avoid if possible, since costs and duration are massive, potential issues tremendous and backbreaking, and there is absolutely no guarantee of success.

> I am not even sure if business properly realizes all this

It definitely doesn't, as in the top directors likely don't. It is likely that they brought in some kind of consultant who sold them this solution to the higher ups against the protests of the lower managers

Tax agencies might be the way to hammer this into organizations. If they demanded specific sorts of data for specific activities for audits everything else would quickly evolve to support that.

Seen a few projects which are equivalent to a tenant cutting off structural columns in a high/mid rise to install safes. Are people going to be punished for demanding impossible customizations or attempting them, or rewarded for "keeping the integrity" like magicalhippo and their client did, as mentioned in their comment?

Real question is why does it need customising… every council is going to have supply chain, payroll, asset management etc

You are right, but everyone feels they are the one special exception. And unfortunately the public sector are especially rigid in sticking to their 40 year old processes, garnished with an organization-wide god complex that they are holding the world together with it

I managed a whole 8 months in a local government role (not UK) before jumping ship when I realized how futile trying to improve anything was

Any IT transformation project like this is always hampered by people wanting customisations. Those customisations are usually to support Janet in office A who demands that she damn well isn't going to make changes to her workflow that she's done since she started in 1995.

We went live with our largest client to date by far recently. Initially they wanted a ton of customizations and integrations. However, since we're a relatively small company punching above our weight, we pushed back hard on stuff where we felt they could follow our standard flow and integrations which hundreds of other customers use.

After we went live they thanked us for this, as it had forced them to rethink their processes, and they were pleased it had led them to much better and more optimized ways of working.

Used to work for a large airline IT provider on departure-control software (check-in, boarding, etc.)

Each airline on-boarded would demand mandatory features that they couldn't do without. Keep in mind these features weren't free, they were billed market-rate development charges - though the company didn't make money off that, the core business model was usage-based billing.

More than 80% of implemented features would go completely unused.

I think the Uk could show some gusto here and implement these systems in-house and open sourced. There’s nothing innovative or unsolved in this domain.

Too much to build. UK government has shown it can build styling templates, payment and notification wrappers well. These are useful and achievable services.

Full on ERP would be a disaster.

The system is working as intended to those that matter.

I'm probably expressing this to the wrong crowd but I think a city is too big when it can possibly lose 216m pounds messing around with software. That could have done a lot of good somewhere but it got blown into the wind instead. Think about that the next time you are working extra hard to make retirement. Your city might just take your taxes and throw them away.

I feel like the title could use the name of the city involved (Birmingham, UK)

These days for ERP, you should make sure the contract specifies if the cost rises to a specific amount, it is canceled and the vendor refunds 50%.

Most of this I blame on the Sales People. They will promise anything to make the sale. Somehow part of the risk should be borne by the vendor.

"The cost of the Oracle project increased from an initial estimate of £19 million to a projected cost of £131 million, including the re-implementation."

When something gets 10 times more expensive than anticipated, there is some serious mismanagement and political 'death march' involved.

This longing for 'one system' is probably the fundamental problem. And these consultant firms with slick salespeople feeding on the procurers' dreams.

Replacing SAP for Oracle to me feels like replacing one evil for another.

Besides the companies themselves constantly upselling you and having idiotic licensing terms. Both are very much the sort of companies with products you only are "able" to implement with extremely expensive outside consultants.

It's interesting that the third-party consultants hired by the city to implement it aren't named in these articles and "Oracle" is taking the brunt of the blame, much like "Ticketmaster" doesn't care if you don't like them or not, you're going to use them. It's not just Oracle's fault for a 200m pound invoice, and I agree jumping from SAP to Oracle is probably one reason why the customization costs that much more than going from some smaller accounting system.

You have third-party consultants charging for addressing all the mistakes in the system, present on daily chats and constantly chasing them around for support. Oracle's always upselling you on the parts of the system you haven't implemented yet.

The actual municipal employees are making 75% (my own estimate) of what their industry peers make in salary so they're just trying to do their job as they found it, not attempt to replace the status quo with a "solved, open source, one-size-fits-all solution" like so many here believe various ERP systems are. Everything sounds better on paper.

> It's interesting that the third-party consultants hired by the city to implement it aren't named in these articles

It certainly is, here in the Netherlands consultancy companies are often directly mentioned as a cause for a lot similar projects going over budget. Though the government really doesn't seem to be able to do much about it or simply doesn't care. As most recently they appointed the ex vice-president of one of those companies as a state secretary of Digitalisation https://en.wikipedia.org/wiki/Zsolt_Szab%C3%B3_(Dutch_politi...

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