IT Failure 'To Cost £19M'

Delays in setting up an IT system will hit Fife Council's budget by a net £19 million pounds.

Problems in implementing the ERP programme will save the local authority £18million less than expected, and has run £900,000 over budget.

Fife Council says the new system still reduces £13million from its budget every year compard to previous working methods.

Councillors are facing a £77million overspend by 2017.

Local Lib Dem leader Tim Brett said: "Like many major computer projects, the ERP project hit a large number of difficulties, meaning Council staff and outside consultants from Capgemini had to spend a great deal of time and effort in resolving them."

A report has recently gone to the Environment, Finance and Communities Scrutiny Committee, and among items highlighted are:

• An increase in project costs for the six year period to 2018/19 from £11.1M to £12.0M.
• A fall in project benefits for the same period from £58.6M to £40.6M, meaning that additional savings will have to be found in other parts of the Fife Council budget.
• The problems and difficulties encountered in Phase 1 included delays in the Council paying its suppliers, some of whom are no longer supplying the Council.
• Improved financial information should have been made available to the different directorates and services within the Council but is still not available; Fife Council has now asked Oracle (another company) to provide an independent report on these problems.
• A further update of other Council computer systems was due to take place once the ERP system had been completed, but it is not clear as to when or whether these other system updates will be delivered.’

Cllr Brett says questions whether due diligence was taken before the project began, saying "it is clear that the scale and size of this project was not fully appreciated."

"This has been a sad and sorry tale, and I am pleased that the Environment, Finance and Communities Scrutiny Committee has agreed to set up a working party to look in more detail at the problems. 

"Clearly, there is a need to learn lessons, as the problems encountered have affected many areas of the Council’s services and continue to do so. It is still not clear who, if anyone, should be held accountable for them, but it would appear that there was a lack of appreciation of the scale and size of the changes that needed to take place, so more effort should have gone into preparing departments before they were made. I look forward to seeing the results of the working party so that we can try and avoid problems such as this in future."

'Almost resolved'

Council Leader David Ross said, “We’ve been completely upfront about the problems with implementation of the Council’s new Enterprise Resourcing Planning system (ERP) for ordering, invoicing and payments. 
 
“Full reports have been presented to the Council’s Standards and Audit Committee and to the Finance Scrutiny Committee.  It is important that we learn the lessons from this process and that is precisely why the scrutiny working group has been set up.
 
“But we also need to recognise that the Council’s old system was out of date and had to be replaced.  There will be a delay in the timing of some of the expected savings but the new system is largely in place now and it is important that the public know that this new system will be saving the Council upwards of £13m every year by streamlining our ordering, invoicing and payments processes.
 
“While we did experience some difficulties with a number of suppliers over last summer almost all of these issues have now been resolved and only two suppliers stopped doing business with the Council completely and this was partly because they were not prepared to adapt to the way the new system operated.
 
“I am still convinced that switching over to the ERP system was necessary and was the right thing to do at a time when the Council is facing the biggest financial challenge in its history.  This project is about streamlining back office processes making the Council more efficient and will save over £13m annually by 2018/19.”