Did a Badly Planned IT Transformation Project cause Public Bankruptcy?
A move to ‘Cloud Computing’ is good, right?
Let’s consider the reports surrounding the effective bankruptcy situation of Birmingham City Council, if the news articles are accurate, they may have even been better staying with a manual paper-based system.
According to the BBC on 16th September 2023, a significant contributor to the financial woes is a catastrophic implementation of an ERP system:
What is the Oracle IT system – and what went wrong?
The Oracle Enterprise Resource Planning (ERP) system is supposed to manage day-to-day business activities and was brought in to overhaul internal functions including payments and HR processes.
Birmingham City Council was meant to change such processes to fit the cloud-based system’s requirements.
But rather than adopting the ERP as it was, officers instead sought to customise it – bending it to the existing way the council conducted its business.
Such a shift – which was contrary to a plan approved in 2021 – had “severely impacted upon the council’s ability to properly implement” the system, the council said.
It is estimated the final cost to put things right will be in the region of £100m.
Oracle is the third-largest global software company, so it’s a reasonable assumption that they didn’t get to that position by supplying products that prove to be duds.
Instead, rather than accepting that the Oracle Developers had most likely designed the software to deliver the most effective workflows out of the box, the Birmingham team decided to reinvent the wheel … and after initial design decisions had been signed off.
The result, it would appear, is an additional £100M direct rectification cost, plus the unknown and unmeasured costs of rescuing a public body from bankruptcy.
Enterprise Resource Planning (ERP) typically refers to a suite of software applications that are integrated into a single platform with the aim of combining multiple data sources and processes to deliver management and operatives with a wide-angle view of an organisation – but with all these processes carefully interlinked, it’s best to avoid customisation unless absolutely necessary.
For Birmingham Council their nemesis may have been the ERP system, it could just as easily have been Microsoft Business Central or any other system at the centre of this fiasco. This lesson should be considered when implementing any new system or process, customisation to achieve exactly the results you require, the integration with systems you already use may appear the ideal solution for your business but there are many factors you need to consider.
Cost- it’s a simple fact any bespoke solution is more expensive than an off-the-shelf alternative.
Training – The necessity of specialised training for a bespoke system adds another layer of complexity and an additional point of failure. Popular, standard solutions should be simple to learn and there will be plenty of resources for training purposes.
Security – Bespoke products tend to lack the commitment to security whereas standard software from reputable suppliers will be supported by regular updates to mitigate vulnerabilities as they are discovered.
There’s an old Chinese proverb that states ‘The flapping of the wings of a butterfly can be felt on the other side of the world’ – which, in modern terms, is the concept that small events can have large, widespread consequences. Birmingham, it appears, has just proved the validity of this observation.
It is a wholesome consideration for businesses that the council have only made the mistake that many businesses do with serious consequences. Quite simply in the current business landscape, we rely on our data, so we need to ensure that it’s protected and also readily available when we need it.
Here at Trusted Computing, our advice to clients regarding future implementations is based on a carefully planned strategy, and standardised systems where feasible, and we are firm advocates of the US Navy mantra KISS (Keep It Simple Stupid)
For instance, Microsoft SharePoint is an incredibly flexible content management system and can accommodate extremely complicated requirements – but we’ve found that, for SME use, it performs best as a simple Company Shared Folder file system, with sub-folders for each business function (HR, Sales, Directors, etc).
This minimises setup, maximises efficiency, and is flexible enough to accommodate business changes – KISS in action!
If you’re considering how you can manage your data better and want to explore the options available for your business please get in touch for a no-obligation chat.