£19m budgeted. £216.5m lost.
Birmingham City Council replaced its SAP system with Oracle.
The 2021 business case put it at £19 million plus £1 million contingency, live in April 2022.
It went live. The council's own forecast cost of the programme to 2027/28 is now £144.4 million. Investigators put the total money lost, overspend plus the savings that never arrived, at £216.5 million. The Register works that out at roughly £200 for every person living inside the council boundary.
Two lines in that record matter more than the headline number. Fraud detection audits were switched off for more than 18 months. And £2 billion of transactions landed in the wrong financial year, inside a system meant to steward £3 billion of taxpayer revenue.
Go-live day cost the council very little. The eighteen months afterwards did the damage, with the controls that would have caught it turned off to keep the system moving.
If your finance system lost its audit trail this quarter, how long before anyone noticed?
Sources
Our file on SAP
- 20 Sept
SAP's chief executive said voice replaces much data entry in three years.
- 19 Sept
KPMG cut jobs in its SAP and AI teams. Partners averaged £880,000.
- 17 Sept
Broadcom raised VMware prices by 10x or more, European cloud providers say.
- 17 Sept
Grocery Outlet's SAP launch cut gross margin by almost 2 points.
- 11 Sept
Zeiss dropped the clean rebuild of its SAP after about €200 million.
For your next steering committee
- 1Ask for the approved budget and the current forecast on the same scope, side by side.
- 2Ask which costs sit outside the programme budget today: internal staff, data migration, parallel running.
- 3Ask who may approve the next increase, and at what amount the programme goes back to the board.
Issue 01 of the ERP LEADERS brief puts a timeline, the three-number review and six questions on one page. Read issue 01
Welcome back. · Issue 01