Birmingham City Council is currently facing a financial crisis, which has led to cuts in local services and increased council taxes. This situation is detrimental to the communities and residents who rely on these services, as well as households struggling to manage rising bill payments.
Adding to Birmingham’s financial challenges is the failure to implement an Oracle Cloud-based enterprise resource planning (ERP) and human capital management (HCM) system. This system was intended to replace a highly customized SAP implementation that was originally deployed in 1999.
Like many longstanding SAP customers, the city council had to choose between engaging with SAP to migrate to the latest S/4Hana cloud ERP system or moving to a different platform altogether. They opted for the latter and selected Evosys to implement a new Oracle Cloud ERP and HCM system.
However, since its launch in 2022, the Oracle system has required manual remediation to fix accounting issues. As per the council’s 2024 financial report, a budget of £5.3m has been allocated for ongoing support and manual intervention on the problematic Oracle system.
In the late 1990s, Birmingham City Council initiated the implementation of an SAP system to modernize local government services. The SAP implementation was considered the largest of its kind for a local authority and aimed to deliver significant cost savings and productivity improvements.
Over time, the council allocated funds for SAP system maintenance and updates. In 2018, Birmingham decided to review its finance, procurement, human resources, and payroll systems to prepare for an ERP migration. They hired Socitm Advisory to help procure a new cloud-based ERP system, and eventually awarded the contract to Insight Direct in partnership with Evosys for an Oracle Cloud ERP solution.
However, issues arose during the implementation process. Birmingham had initially planned to adapt their existing business processes to fit the new Oracle system, but changed course and customized Oracle to align with their current processes. This decision had negative consequences, leading to delays, additional costs, and configuration issues.
As a result, the Oracle system has faced numerous problems, including inaccurate financial transactions and delays in implementing modules for budget management. City council leader John Cotton described the Oracle system as “disastrous” and significantly more expensive than originally estimated. The council has already spent over £100m on the ERP and HCM replacement, and an additional £45m is projected to be spent on fixing these problems.
The difficulties with the Oracle system have also led to delays in closing prior year accounts and inaccuracies in financial data. The council’s 2024 financial report revealed a £12.5m deterioration in bad debts, partly attributed to the implementation issues with the Oracle system.
The problems faced by Birmingham City Council in implementing the new Oracle Cloud ERP system were outlined in a 2021 report. Staff turnover and lack of Oracle expertise, deficiencies in program delivery processes, and delays in the go-live date were identified as contributing factors. The council underestimated the complexity of the implementation, resulting in the need to migrate the old SAP system to newer hardware and software and pay additional maintenance and support fees to SAP.
