SAP Watch

Jul 31 2008   10:35PM GMT

SAP-related scandal in Burnaby

JackDanahy Jack Danahy Profile: JackDanahy

The city of Burnaby, B.C. is playing host to an unfolding SAP-related scandal that is pulling some shady practices into the light.

On May 30, 2005, a report from Burnaby’s Finance and Civic Development Committee officially recommended a purchase of SAP to the Burnaby City Council. The project, however, faltered badly, as original implementation partner Telus walked away after one year later, and Burnaby saw the costs of the SAP project skyrocket from $10 million to $30 million (in Canadian dollars, which are nearly on a par with U.S. dollars these days). That in itself is nothing new, and it isn’t SAP’s fault. There are plenty of ill-prepared project teams and unrealistic CIOs out there, and typically it’s the implementer’s fault that SAP can’t be brought on line properly. But what happened after the failure is beginning to take on the reek of scandal.

Consider that, in late 2007, the Burnaby City Council commissioned a third party to write an assessment of the SAP project. The third party chosen was a company named APT International Business Sciences, which has an odd background: there is no independent mention of the company’s existence before 2007, and the APT Web site (still under construction as of press time) was only registered in November, 2007, and from the address of the Rotary Club of West Vancouver, not an APT office. It seems convenient that APT’s Web site came into existence at almost exactly the same time that the Burnaby City Council needed a report to justify its SAP decision (although APT itself claims to have been founded in 2002). But, more damningly, the registrar of the APT Web site and one of the three co-authors of the Burnaby report was Peter Everett, a former SAP Canada employee currently with Impac Services. Everett’s name does not appear on the APT Web site; indeed, the APT Web site does not contain the names of principals, contact information, customer information or indeed anything else of substance other than a generic welcome message.

Given that SAP Canada sold Burnaby its SAP product, it may well be a conflict of interest to have an ex-SAP Canada employee so closely involved in the writing of the Burnaby SAP project justification report. Combine that with the fact that APT is not a research firm or consultancy with a long track record, and in fact has no verifiable corporate presence other than a shell of a Web site, and it’s possible that the Burnaby City Council colluded with APT (perhaps with Everett running lead) in an effort to justify itself. The Burnaby City Council ended up paying APT $100,000 for a 23-page report and, in return, got a fig leaf of legitimacy for its failed SAP project.

However, neither the report itself nor the city council’s relationship with APT have gone over well with Burnaby resident David Field, who spent months trying to access the report through Canadian Freedom of Information (FOI) laws. Field forwarded SearchSAP a copy of the report, which simply asserts that the costs of the SAP system and consultants are “reasonable,” without defining what “reasonable” might mean.The report contains no numbers or other hard evidence to exonerate Burnaby of incompetence or overspending, and it relies largely on the city and SAP’s notes and records to reach the conclusion that it does.

Local elections in Burnaby are coming up, and some disgruntled voters are going to express their displeasure about the millions of taxpayer dollars wasted on SAP cost overruns (to say nothing of the $100,000 report) by voting down the city’s mayor.

Peter Everett did not respond to an opportunity to comment on this blog entry.

Demir Barlas, Site Editor

2  Comments on this Post

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  • Johannesburg
    And they say Africa is corrupt?
    0 pointsBadges:
  • Rodwell
    You are right - corruption is everywhere. That was a huge leap in cost. But the story didn't conclude nicely or to the point which us SAP lovers want to know: yes it faltered badly, but is it working now or its dead and buried for that City?
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