As many as 600 jobs are on the line as Birmingham City Council (BCC) is drowning in debt following its fault-stricken Oracle ERP rollout.
The local authority said it will begin conversations with unions and its staff straight away. No decisions will be made until its consultation period is over, according to Deborah Cadman OBE, Chief Executive of Birmingham City Council.
Much of this trouble stems from the ERP rollout catastrophe, which came into the limelight in July last year – when the council sunk another £46.5MN into the system’s deployment.
Some projections suggest that the BCC has now spent a total of £100M in implementing the solution.
Those costs then contributed to the BCC declaring itself effectively bankrupt, halting all spending on anything other than those it has a duty to continue by law, such as waste collections, safeguarding vulnerable persons, and social care.
Now, a spokesperson for Birmingham City Council has revealed:
We anticipate that (subject to consultation) up to 600 posts may be declared redundant across the council.
“This number does not include posts that have been deleted through organizational re-design that were already vacant, nor does it include vacancies.
“We understand that this news will be unsettling, and want to reassure you that we are here to support you through this process.
“We will now start formal consultation with our corporate trade union representatives and follow these with directorate collective consultation meetings. These consultation meetings with trade unions will continue to take place regularly.”
A BBC investigation recently found that Birmingham City Council has accrued the most debt out of any council in the country, totaling £2.9BN.
How Did We Get Here?
The BCC introduced Oracle in 2018 as a replacement for its SAP solution, citing its suite of advanced capabilities, including automatic updates, real-time analytics, and AI and automation features, which would hopefully reduce manual processes.
When starting its deployment journey, the council faced a typical business conundrum; should it adapt to fit the software’s requirements or change the software to better suit its own needs?
It decided to try doing bits of both, which meant it was left with twice the amount of problems, as one Birmingham City Council report confesses:
“The council had planned to adopt the Oracle system, changing its existing business processes and upskilling staff to support its implementation.
The report added: “This is what members gave officers approval for through Cabinet papers in July 2019 and March 2021.
“However, officers evolved the approach towards adapting the system – meaning that Oracle was customized to meet the council’s existing business processes.
This shift in emphasis (from adoption to adaptation) has severely impacted upon the council’s ability to properly implement the Oracle system.
In the end, to ensure reporting remained up-to-date, the council ended up running both systems side by side, which included the Oracle ERP going live in April 2023.
Birmingham City Council may not be entirely to blame for its costly ERP rollout, however, as the cabinet did not appear to sign off on the council’s decision to alter Oracle’s system.
If no other good has come out of this, the council’s actions may at least serve as a warning to other businesses facing a similar predicament.
Last month, Oracle’s share price took a tumble after missing revenue expectations, in spite of its growing sales.