RISE with SAP plan fails to hit go-live date in West of England council

Delays spark fears of £500K legacy support bill, plans for new financial year

Updated Gloucestershire County Council has missed the go live date for its RISE with SAP move to the cloud, putting the public body at risk of incurring an additional £500,000 ($639,000) in costs to keep its legacy application up and running.

The west of England local authority, which will spend £616 million ($788 million) on local services in total in the coming financial year, signed up to move its ageing SAP ERP system to the most recent S/4HANA platform and the cloud in April 2022, with plenty of promotional fanfare from SAP.

The council committed to the so-called "RISE with SAP" program in a contract worth £7.3 million ($9.3 million). RISE with SAP is SAP's effort to get customers in the cloud by dealing with third-party development and cloud infrastructure providers on their behalf.

In January, the council's Audit and Governance Committee head director of finance Paul Blacker confirmed the new system would go live on the 4th March 2024, "subject to system testing."

But a council spokesperson confirmed to The Register that the new cloud-based system had actually failed to go live on that date, and refused to confirm plans for a future date.

Aside from any other costs stemming from the delay, it raises questions about how the council is keeping existing legacy SAP systems — first implemented in 2007 — up and running. In seeking authorization from the council's cabinet in June 2021, officers said [PDF]:

“Moving to SAP Rise, which is the cloud-based latest version of SAP's ERP software, would support the ICT strategy to move applications to cloud based solutions and hardware estate out of the datacentre, and there would be a cost avoidance of £0.5 million, which would be required to keep SAP servers running beyond December 2023."

A council's spokesperson refused to say whether the publicly funded body had incurred additional support costs for its legacy SAP solution, but said the replacement was about to start users testing.

“All ERP migrations are complex and need to be well planned and it is important that we continue to follow good practice and keep the programme under review to ensure that both technical and people changes are delivered effectively ensuring that there is minimum disruption to the services that we offer,” the spokesperson said.

"We have made significant progress with the technical build and as we move more towards user testing and implementation we are continuing to review the later phases of our programme plans and timeline to ensure that ultimately we have a system that meets the council's requirements. As our programme includes procurement as well as finance and HR, the introduction of the Procurement Act 2023 means that we are reviewing our requirements in this area."

Meanwhile, the June 2021 documents also raise questions about how competitive the competition to replace SAP really was. The same document stated suppliers that had expressed an interest in the competition were invited to tender. "Only one response (from SAP (UK) Limited) was received in response to the council's ITT," the document reads.

The arrival of the new SAP system was supposed to help with issues raised by official auditors Grant Thornton.

Blacker had informed Audit and Governance Committee in January that "the new SAP System would be in place for the new financial year and it would help to resolve some of the issues raised. Members remarked over the delay in the installation of SAP, officers explained it was better to delay in order to get it right."

Any delays are bound to taint the RISE with SAP programme, upon which the German vendor seems to be betting the farm. Another RISE with SAP customer, UK supermarket Asda, has also had its S/4HANA cloud implementation delayed. In January, it was forced to extend a support arrangement with its previous owner, US retail giant Walmart, to keep the existing SAP systems up and running.

ERP projects have an uncanny knack of running overschedule, overbudget, or simply not working to plan when deployed. Just ask the County Councils in Surrey, East Sussex, West Sussex, and Norfolk.

None of those less-than-smooth running implementations, however, can hold a candle to Birmingham City Council's borked installation. ®

Updated at 1608 UTC on March 15, 2024, to add

Following publication of this article, before which we repeatedly asked for a response regarding the potential £500K contract extension costs, Gloucestershire County Council finally addressed this point. A PR person told us:

There are some short term, much smaller costs to extending support for on-prem SAP through 2024/25. However we anticipate that the £0.5 million extra cost will be avoided.

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