In this article, we reflect on the chaos and ballooning costs that ensued after Birmingham City Council embarked on its cloud journey with Oracle.
The Original Solution and the Shift to the Cloud
Oracle was brought in to replace the council’s existing SAP (Enterprise Resource Planning/ERP) system. While it had served its purpose, an external consultant in the form of Socitm Advisory was brought in in 2018 to consider a new cloud-based ERP system (=Oracle) as part of its future requirements review. At this point, it’s worth noting that the previous system ticked all the boxes from a planning point of view – on time, to budget and according to the requirements.
Solutions and Systems integrator Insight Direct (UK) Ltd and its partner Evosys won the contract to deliver the solution, which was supposed to save £563k in 2022/23 and £788k in 2023/2024 – and a whopping £10.9m over nine years.
As it turns out, while the plan originally set out to adapt existing business processes to fit with the new Oracle system (the cost-effective solution), Oracle was customised instead. And this change in approach is eventually what hampered a working implementation of the Oracle system – with costly and time-consuming consequences.
The system went live in 2022 – with configuration problems right from the start, resulting in an additional £100 taxpayer bill in 2023 alone, according to city council leader John Cotton in an interview with the Birmingham Mail.
The major issues surrounded the ERP posting inaccurate transactions, resulting in tremendous manual work to rectify the challenges of the finance system and delays to the implementation of crucial functionality relating to budgeting and forecasting.
In September 2023, the council declared itself effectively bankrupt.
In February 2024, it was reported that the council required another £45m of taxpayers' money to fix the problems. Additionally, BCC experienced half a year’s worth of delay to close the prior year’s accounts due to the challenges outlined above. As a result, the 2024 financial report states: “Significant increases in the bad debt provision of £12.5m – this was driven by an increase in total uncollected debt, as issues with the Oracle finance system meant that debt collection activities were paused between April 2022 and January 2023. This was due to incorrect information being posted to ratepayers’ accounts, so the Council needed to tidy up the finance system before it could begin debt enforcement activities.”
As of January 2025, works to rectify the especially affected finance system have been delayed. According to a report by Audit Reform Lab, a collective of academics, consultants and activists located in the Centre for Research on Accounting and Finance in Context (CRAFiC) at the University of Sheffield, the total impact of the Oracle failure on the general fund to April 2026 is estimated to be an egregious £216.5m.
The IT Reality
Now, if like me, you run a business, any investment would need justification and a clear set of objectives, along with regular reviews to work out spend vs ROI, service level agreements, and general due diligence to ensure you’re not throwing money out of the window and what you’ve chosen to invest in delivers on what was promised/what you were trying to achieve.
As taxpayers (businesses included) face tax increases, they will become harder to justify if situations like this involving public organisations do not employ basic business sense and approach projects in a structured manner considering all eventualities.
Keyword: change management. Appoint a project manager as your central point of contact. Get your staff on board right from the start of a project by relaying purpose/objective of the project, scope, boundaries, details, principles. Rather than a one-way street, the communication must be a dialogue. Example: shift from “We’re doing this because it saves us money, these are the implications.” to “We have a real opportunity here to become more cost-efficient, lean, and productive. We’d like to understand how you do your job to achieve that.” This way you’re avoiding forgetting about integrations/dependencies that could later become a pitfall if you’re not considering them during the design process. This is especially ironic now hearing Birmingham council saying their employees will need extra time to align with the vendor’s established ways of working - years after the troubled launch.
Below the advice we at Innovate would give any customer who is thinking of taking on a comprehensive project like this.
- Make informed decisions. Especially from our customers we hear often that they’ve turned to us for the IT knowledge and they trust us. BUT, while we appreciate our customer relationships, we’d advise anyone to acquire the necessary basic knowledge to judge/understand the solution and what it achieves for yourself (which is why we’re also providing knowledge resources on our blog to equip you with it). With the manifold of suppliers you work with on a daily basis – which by themselves are usually focused on generating as much revenue as possible - if you don’t understand something, ask – so they can’t pull the wool over your eyes.
- Have a clear strategy and detailed plan in place, map
- Responsibilities (who does what, when)
- Clear objectives (what’s the end state of the project/what is the challenge we’re trying to solve beyond ‘saving money’ – if that is your goal)
- Milestones (what should happen by when) – moving goal posts is not point of the exercise
- Service level agreements – so you know what you’re getting. (On that note, we’ve recently onboarded a customer who was with a different MSP before. Our initial assessment flagged over 2000 security issues in their system!)
- Emergency protocols (disaster recovery) when things don’t go according to plan. The BCC case delivers plenty of examples where a disaster recovery/business continuity plan (like rollbacks when workflows don’t work) would have prevented bigger challenges down the line. Why? Because the last thing you need is more business disruption – when, please excuse the language - shit hits the fan.
- Ensure accountability – always ask questions, always ask for updates; while you’d of course want to avoid a situation like BCC encountered, accountability ensures that you know 1) something HAS gone wrong and 2) who is responsible and 3) who will work on a solution.
- Work in cadences/phases. By knowing the ins and outs of the entire business from the start, prioritising and ensuring regular reviews of what’s been done so far, what’s worked and what doesn’t, you’ll never be in the situation of getting to the end of a project and seeing it failing. – As they say: do it right or do it twice.
In a Nutshell
Long story short, the Birmingham Oracle debacle is a case study in what happens when you outsource thinking (… which also applies to the use of AI, but that’s a different story) and fail to run an IT investment with basic commercial discipline. If you cannot explain what you’re buying, how the technology works, don’t do the groundwork for big changes and plan for when things go wrong, you’re essentially funding a gamble (and in this case even worse: with taxpayer money). Whether you’re spending private capital or public money, the fundamentals don’t change: do your due diligence, set clear responsibilities and milestones, agree SLAs and reporting, phase delivery with proper governance, and hold providers to account from day one.
My lesson for you? Ask more questions early, demand evidence, and keep control of the outcome, because blind trust is expensive, and taxpayers always end up paying the bill.
Sources and further reading:
Failure to act on Oracle rollout crashed Birmingham finances • The Register
Further delay in fixing council's troubled IT system - BBC News
Vital services safe - leader of 'bankrupt' Birmingham council - BBC News
Birmingham pauses Oracle relaunch to get staff on board • The Register
Birmingham council faces £216.5M loss over Oracle debacle • The Register
