Local governments aren't businesses – so why are they force-fed business software?
Oracle's repeated public sector failures prove a different approach is needed
Opinion Fill in the blank: "_______ project fails, costing millions." Five points if you chose "Government IT," five points for "Oracle," and a gold star if you had both.
That Oracle's local government ERP project for Birmingham City Council is now in nine-digit overrun and doesn't work is news because of its size and contribution to the council's bankruptcy, not because this has never happened before.
What's going wrong? It's easy to blame Oracle for incompetence. Indeed, a quick search for "Oracle project failure" will spew more examples than mere human minds can grasp. Whether Oracle is uniquely terrible is a moot point. You can repeat the exercise using SAP or any monstrous ERP entity of your choice and get copious reading material. There was a reason Birmingham was trying to move away from SAP after all. Oracle, though, seems to go the extra mile.
There are failures in the commercial sector, of course, even though they don't often resemble what goes on in the state sector. Yet they can be instructive as wronged enterprises are much freer to go to the law to fix their grievances. What the court filings reveal strongly indicates why Oracle and its soulmates are such a bad fit so often, most especially the complicated, unique challenges of local government. Take this case study of an American payroll outfit called BBSI, which ended up taking Oracle to court, where the correlation between complexity and chaos is amply illustrated.
Courts are great at lifting the lid on things usually welded tight shut. BBSI runs payroll across multiple US states with a large list of requirements for their unusual business model. Oracle and its consultancy partner KBACE said they could deliver the goods on Oracle's HCM Cloud platform. It was only after the implementation began that they revealed that they couldn't.
According to BBSI, lots of basic functionality was missing from the platform, and what had been sold could not do the job. BBSI let fly the lawyers, claiming fraud, misrepresentation, and a catalog of similar sins, with the case being settled out of court last year – not before revealing a fascinating insight into how Oracle can still make money on failed contracts where the client stops paying.
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The evidence is clear: the less you resemble the model enterprise an ERP solution is designed for, the less likely it is to work. Local governments are never that model enterprise. In fact, they rarely resemble each other. They have to provide a huge range of services without much control over revenue, their metrics of success are as varied as the communities they serve, and they have the huge pudding of legal responsibilities that comes from spending public money. None of this stops the aggressive mis-selling of services by corporate carnivores, and there's a good argument that there should be legal risks to suppliers above the normal contractual safeguards.
We have to stop pretending state entities are businesses that fit business software. They are more complex, less well funded, more prone to change as democratic needs evolve, and much more transparent. ERP architectures are not suited for this: there are other, better models for a viable framework. You're looking at one right now.
Away from the ERP lens, state systems can look very different. There are shared resources to safeguard and manage, a wide variety of disparate functions that need to talk to each other in dynamic ways, a unique mix of openness and privacy needs, and tons of data management. That describes Birmingham City Council; it also describes a standard PC.
It doesn't matter what mix of hardware, OS, and software any particular PC – or laptop or mobile device – uses, the end result is a commonality of design capable of supporting an infinite mix of functions reliably, cheaply, and flexibly. Resources of memory, storage, CPU, communications, and management all have analogs in public organizations, while commonality of APIs, shared components, and standard development practices ensure a superb ecosystem. Build an equivalent stack as a conceptual framework for local government needs and processes, and the things they all have in common will create a huge market for sustainable services despite no two organizations being the same.
Getting there will be hard. It's a philosophical change of viewpoint that will be in direct conflict with billion-dollar global powerhouses. But freed of commercial secrecy and competitive distrust, state agencies are free to talk to each other and build ideas together – in fact, that's essential. There's a chance of a true revolution that improves the lives of everyone because everyone is touched by local government: motivation enough for a sector that sorely lacks it to attract the talent that matters. And if you doubt that this change of approach would be that consequential, imagine instead how the world would look if Oracle ran your PC. Unthinkable? There's your problem, dear reader. ®