SAP Watch

May 23 2008   10:40AM GMT

SAP megadeal goes wrong

JackDanahy Jack Danahy Profile: JackDanahy

SAP signed a megadeal with the U.K.’s Birmingham City Council (BCC) in 2006 designed to save the sum of $2 billion over 10 years. However, SAP’s BCC deal is currently a project in trouble, joining the cities of Portland and Burnaby as recent SAP public sector projects that are going wrong. Today, Brendan Arnold, BCC’s Director of Finance and the executive in charge of the SAP project (known as Voyager) stepped down from his post, capping two years of complexity and acrimony at BCC.

The crux of the problem is that BCC, which processes hundreds of thousands of invoices a year, wanted to move those financial processes to SAP but encountered difficulty along the way. Earlier this year, as many as 30,000 BCC invoices had not been paid by the system, recollecting the SAP-LAUSD situation in which LAUSD employees were not paid for months. Capita, the consultants involved with the deal, have pocked twice the amount they were originally supposed to get, and left a terrible impression with BCC employees who refer to them as “Crapita” on The Stirrer, a Web forum utilized by the BCC community. Capita, which offered both training and support for the project, allowed some urgent support requests to go unanswered and unlogged, creating further problems for frustrated BCC employees who are the frontline users of Voyager.

As if this weren’t bad enough, John Hemming, a local politician associated with the project, decided that the employees were to blame and called them “whingers” on The Stirrer. Hemming and senior leaders of Voyager believe that BCC staff resisted being trained and are unaware of the full value of the system, which does in fact successfully process far more invoices than it neglected earlier in 2008. For their part, employees blame management for being optimistic, unprepared, and in denial — three characteristics that are guaranteed to tank any major SAP project.

Perhaps the most damning view of the entire project comes from Stirrer contributor ATVLand, who has this to say [some sentences re-ordered]:

The SAP system was developed for widget makers and the like – hard outputs. But that’s just it – we discovered that our service area, over coming months, will be monitored on ‘outputs’ tied in to Voyager; these outputs will determine how much money my team gets, and also whether or not our personal performance will then allow for regrades…Many of the things the Council do are not measurable – SAP tries to make them so. A colleague worked for a London Borough where they tried to introduce SAP, he said that the staff became slaves to the system, constantly inputting data to it – and not getting on with delivering the service. The Council runs on a lot of goodwill (despite many people out there thinking we’re all wasters) – more and more of out time is spent trying to get around the levels of bureaucracy and indecisive/pedantic/thick Cabinet Members – people of Birmingham will suffer if the staff are forced into yet more layers of bureaucracy. I’m told placing an order for something has to go through several layers of people now too – is that really more efficient? The removal of petty cash means that we can’t provide coffee for clients, we subsidise BCC from our own pockets for bus fares and odd items of statonary/office equipment etc now have to be bought at considerably higher prices through the SAP system (rather than popping to poundland and claiming back) – is that really better for the Council?”

There are many important points here, perhaps the chief of which is that the nature of service, especially public service, cannot (or should not) be reduced to “hard outputs” in all cases. Indeed, that’s the major difference between public and private service, and it could be one of the reasons that so many SAP projects in the public sector are falling short.

Demir Barlas, Site Editor

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  • JackDanahy
    "SAP public sector projects that are going wrong." Not all SAP public sector projects are going wrong. In fact, Bernalillo County in New Mexico just completed their SAP ERP ECC 6.0 implementation with 13 modules and over 170 customizations in a 12-month period. Go live occurred on July 7, 2008 and the project is a great success. See the article in the Albuquerque Journal from September 7, 2008: "Take a Computer Lesson From Bernalillo County" by D'Val Westphal.
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