When ERP projects go bad: Surrey County Council's £30m ditch SAP effort delayed again
Existing hold ups already cost millions as UK authority fails to put a price on latest setback
Surrey County Council has suffered another delay to the implementation of its protracted and accident prone £30 million ERP project that will, at some point, see it switch systems from SAP to Unit4.
The cash-strapped public authority – currently running a £30 million budget deficit – was unable to say how much the further delays would cost the council.
The new finance and HR system was planned to go live in December 2021, however, The Register revealed in January that the project go-live had been delayed until April 2022 at an additional cost of £3.9 million including payments to the new supplier, implementation partners and SAP for extending support for existing software.
The council — which spends roughly £1.1 billion a year on local services — said in a meeting this month that the new go-live date would now be June 2023.
Leigh Whitehouse, deputy chief executive and executive director of resources, told the Resources and Performance Select Committee the delay would bring additional costs for the programme. "The outcome of that is based on the re-planning and also commercial conversations with the supplier. I'm hoping they're very close to conclusion," he said.
"The length of time for the programme to deliver now is significantly extended, and therefore, there will inevitably be a substantial cost increase to the budget required. I'm not seeking to avoid that. Just I can't tell you what the exact figure is at the moment," he said.
The Register has contacted the council. It has so far declined the opportunity to explain the reason for the additional delay, or how much it will cost. Unit4 has also been offered the opportunity to comment.
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Nearly two years ago, the council went to market to replace its aging SAP ERP system, first implemented as R/3 in 2004, and later upgraded to ECC 6.0. In 2015, the council contracted with an independent support provider which effectively "froze" the council into its version of the software, with limited options for maintenance, upgrades or patching. In 2017, Surrey's administration decided to get a new contract for maintenance and licensing, but to stay on the same system due to the cost of moving to a new ERP platform.
In the business case for the replacement, the council said: "The SAP software dates back to 2004, is out of date and will no longer be supported by SAP beyond 2025… The existing hardware was procured in 2011 with a projected lifespan of five years and is now suffering performance problems, increasing the risk of system failure with serious consequences for the council."
In September that year, Surrey CC awarded Unit4 a £30 million contract to replace its SAP ERP system. The Council "needed a true cloud platform that would deliver high-level business outcomes across the Council ecosystem and Unit4 is the solution to deliver this for us," Whitehouse said in a press release at the time.
Unit4 partnered Embridge Consulting and Proactis on the project, while the project was headed by Andrew Richards, interim digital business and insights programme manager, who trades as A C Richards Consulting. He was allocated a £177,000 fee covering the years 2019/2020 and 2020/21. His LinkedIn profile suggests he is no longer working on the project. A Surrey County Council spokesperson confirmed: "[H]e was in a contract role, which came to an end, and the project is now being led by an internal programme manager."
The spokesperson added: "Surrey County Council and Unit4 have been working closely on a transformational project to implement a new ERP system for the council. Over the course of the project, the implementation requirements have evolved – from both a functionality and project/implementation perspective.
"These were agreed by both parties and the programme has made steady progress, reaching the clear milestones set. Both organizations continue to work in true partnership and are committed to delivering the new system together in 2023.
"Once the new system has gone live, the Council will be reviewing the whole project, as a lessons learned exercise, with full scrutiny from members." ®