UK Council Sells Assets To Fund Ballooning $50 Million Oracle Project (theregister.com) 82
West Sussex County Council is using up to $31 million from the sale of capital assets to fund an Oracle-based transformation project, originally budgeted at $3.2 million but now expected to cost nearly $50 million due to delays and cost overruns. The project, intended to replace a 20-year-old SAP system with a SaaS-based HR and finance system, has faced multiple setbacks, renegotiated contracts, and a new systems integrator, with completion now pushed to December 2025. The Register reports: West Sussex County Council is taking advantage of the so-called "flexible use of capital receipts scheme" introduced in 2016 by the UK government to allow councils to use money from the sale of assets such as land, offices, and housing to fund projects that result in ongoing revenue savings. An example of the asset disposals that might contribute to the project -- set to see the council move off a 20-year-old SAP system -- comes from the sale of a former fire station in Horley, advertised for $3.1 million.
Meanwhile, the delays to the project, which began in November 2019, forced the council to renegotiate its terms with Oracle, at a cost of $3 million. The council had expected the new SaaS-based HR and finance system to go live in 2021, and signed a five-year license agreement until June 2025. The plans to go live were put back to 2023, and in the spring of 2024 delayed again until December 2025. According to council documents published this week [PDF], it has "approved the variation of the contract with Oracle Corporation UK Limited" to cover the period from June 2025 to June 2028 and an option to extend again to the period June 2028 to 2030. "The total value of the proposed variation is $2.96 million if the full term of the extension periods are taken," the council said.
Meanwhile, the delays to the project, which began in November 2019, forced the council to renegotiate its terms with Oracle, at a cost of $3 million. The council had expected the new SaaS-based HR and finance system to go live in 2021, and signed a five-year license agreement until June 2025. The plans to go live were put back to 2023, and in the spring of 2024 delayed again until December 2025. According to council documents published this week [PDF], it has "approved the variation of the contract with Oracle Corporation UK Limited" to cover the period from June 2025 to June 2028 and an option to extend again to the period June 2028 to 2030. "The total value of the proposed variation is $2.96 million if the full term of the extension periods are taken," the council said.
Consulting (Score:5, Insightful)
Re:Consulting (Score:5, Insightful)
How much of this is incompetence (Oracle's and the City Council's), and how much of this is good old-fashioned money laundering? I can't believe that anyone is stupid enough to now know of Oracle's many expensive failures, but I can readily believe that public money is being intentionally stolen.
Re:Consulting (Score:4, Funny)
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If the United States behaved like Switzerland, we would all be speaking German and you wouldn't have the luxury of complaining in a public forum.
If the United States behaved like Switzerland 1/3 of you would be speaking German, 1/3 would be speaking Italian, 1/3 would be speaking French, and you'd be free to complain in any forum you wanted in your choice of German, Italian, or French.
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To be fair, I think he meant if the US didn't have that military because it tried to be as neutral as Switzerland, the Nazis would have won.
I would disagree on two points: A Germany would probably have won WW1 and the Nazis wouldn't have been a thing and I am not convinced the Kaiser would have had ambitions on US soil.
B: Switzerland's neutrality, to a degree, was secured BECAUSE it had a somewhat potent military willing to go scorched earth on the low lands and hunker down in the mountains.
Neutrality is wo
Re:Consulting (Score:5, Interesting)
Every government project should be payment on delivery. Every. Single. One. If you can't finance the project, or get a loan to get it across the finish line, you shouldn't be bidding on it. That should be the law. In all government, world wide.
Friend of mine's wife is a lawyer, and when writing a contract for the government added a penalty clause to it. Apparently this is never, ever done, he's unaware of any time this has been put in a government contract before.
The contractor went bankrupt because of the penalty clause.
AFAIK it's never been done again since then.
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On the other side, I remember the CA Highway reconstruction project that had an incentive clause, awarding the contractor millions of dollars based on early completion of the highway project. As I recall the contractor worked three shifts around the clock to finish the project months early.
https://www.planacademy.com/co... [planacademy.com]
Re: Consulting (Score:2)
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Horseshit.
Penalty clauses (and early finish bonuses) happen all the time in critical infrastructure, because it's critical infrastructure that needs to only be down as long as specified.
If a company rebuilding a bridge gets it done a month early and it passes inspection, they deserve something for the efficiency.
If a company rebuilding a bridge gets it done a month late, they deserve to get whacked on the nose for wasting everyone's time that needed to use that bridge.
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Re:Consulting (Score:5, Insightful)
How much of this is incompetence (Oracle's and the City Council's)
Low-balling to get the project and then inflating the cost is standard practice at Oracle.
Larry is the world's third-richest person. He isn't incompetent at all.
The city council is either incompetent for selecting Oracle, corrupt, or (most likely) a combination of both.
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Low-balling to get the project and then inflating the cost is standard practice at Oracle.
Low-balling to get the project is standard practice *everywhere*. The entire procurement process is broken by design. We all say we won't just choose the lowest bidder but we also all know that the lowest bidder is going to get the most attention. So we strip it down to the barest scope that can be called a 'solution' without blushing too hard, with all the bits that make it actually workable moved into the optional extras section, and we take the optimistic happy-path time estimates that cannot possibly be
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Low-balling to get the project is standard practice *everywhere*.
Sure. Plenty of sleazeball contractors can turn a $10M bid into $15M or $20M.
But how many can turn $3M into $50M? That's a whole different level of sleaze.
Re: Consulting (Score:2)
Re:Consulting (Score:5, Insightful)
It's not low balling, it's because the UK breeds incompetence in government.
We are thinking about building another tunnel under the Themes river. So far we spent about 3x as much on a feasibility study as it cost the Danish to build the longest underwater tunnel in the world. What is the difference between us and the Danish?
It's because in much of Europe they keep doing these kinds of projects, so they build up the skills in government/civil service to get them done on time and on budget. The contractors get a steady flow of work so are less incentivized to inflate prices or prolong projects, because if they do a good job there will be more work coming soon.
The UK rarely builds much, and when it does it tends to be local councils in charge, with little experience. Same with IT projects.
It could be fixed by establishing a government projects department that oversees these things and develops the talent and processes needed to get them done. We should also look abroad for contractors because our own are incompetent and out to rip us off. The Chinese could have built HS2 for about £5 billion, not the £100 billion our guys were asking for. Getting things done quickly and affordably is more important than it being done by a British company, and they can always improve if they want to get those contracts.
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What is the difference between us and the Danish?
You're a person (or possibly an AI) and the Danish are puff pastries with a fruit filling that go well with a cup of tea or coffee?
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Sam Freedman has written extensively about this in relation to Capita etc. On Substack. It's good stuff, he's very astute
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Other Sams are available on the same topic, also astute! Sam Bowman and Sam Dumitriu
Tory council. (Score:5, Insightful)
Getting into economic trouble with private contracts and selling off public assets to pay for it is a time honoured Conservative tradition.
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I don't understand why a city council needed a $3.2M HR system to start with, let alone understand how it ballooned to nearly $50M. Isn't there a another council using similar software that they could have leveraged off of, tweaked a few settings, and run with that?
After 6 years of implementation consulting, it is amazing that every year, when discussing the coming year's budget, no one effectively argued to write off the losses and take a different approach...
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I don't understand why a city council needed a $3.2M HR system to start with, let alone understand how it ballooned to nearly $50M. Isn't there a another council using similar software that they could have leveraged off of, tweaked a few settings, and run with that?
After 6 years of implementation consulting, it is amazing that every year, when discussing the coming year's budget, no one effectively argued to write off the losses and take a different approach...
Of course they don't need it... but they got sold it by a slick sales-arsehole and keeping the contract going is making someone a lot of money.
Combine that with the idea that private industry uber alles which permeates conservative thinking and it's no surprise West Sussex ended up where they are... and the sad part is in the next elections, the Tories will still be in control as that part of the country won't vote for anyone else because of the misguided belief that the Tories are the party of fiscal re
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The UK rarely builds much, and when it does it tends to be local councils in charge, with little experience. Same with IT projects.
I don't understand why a city council needed a $3.2M HR system to start with, let alone understand how it ballooned to nearly $50M.
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Because:
1. Oracle came to town and buried the stakeholders under all the free swag and bullshit promises of how their shit would make everything so much better, and there would be a pot of gold under the rainbow at the end
2. After winning the bid on the project, Oracle began doing what they always do: relying on a sunk-cost fallacy and the bad press generated by politicians being in the shit over their head because they didn't know what the hell they were doing
3. They try to keep the project on the rails
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How much of this is incompetence (Oracle's and the City Council's)
Low-balling to get the project and then inflating the cost is standard practice at Oracle.
Larry is the world's third-richest person. He isn't incompetent at all.
The city council is either incompetent for selecting Oracle, corrupt, or (most likely) a combination of both.
Governments have run on the cost-plus contractor route for so long they probably just put together a list of requirements that started with, "Lowest initial bidder that will inflate costs the most through time."
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I can't believe that anyone is stupid enough to now know of Oracle's many expensive failures
Every major database migration company / consultancy has a history of many expensive failures. It's easy to point to Oracle as the fault here, but the reality is the fault almost certainly lies with project management. Oracle and others will do what they are told. Expensive failures universally stem from incorrect problem assessment, unclear requirements, too much system customisation, changes mid project execution, etc, etc, etc.
Incompetence is the answer. No need to go look for a conspiracy.
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A friend of mine got his first job in IT after graduating college in a state government office in the US. One of his major responsibilities was to follow - in-person - the daily, weekly, and monthly printed reports that flowed out of the datacenter, and to see first-hand how the departments actually used the reports.
He found most departments simply shelved the stacks of greenbar printouts and never looked at them.
A smaller number needed just a few datapoints.
An even smaller number had a need for the reports
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I just see the same mistakes repeated over and over again.
In many cases this is caused by buyers not knowing what they want because they can't create good requirements that actually fulfills the needs of the users and the developers don't have a clue about what they are developing for while the project managers don't know any technology and just have a hammer so everything looks like a nail to them.
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My wife was involved several times with choosing enterprise systems which included an Oracle bid.
No matter the pricing from the other bidders, Oracle would always come in lower. They chase the sunk-cost fallacy as a business strategy. Once they're in, they wedge themselves in so hard you'll never get them out and then penalize you with "license audits" to make you pay for shit that wasn't even part of the original deal.
If you do business with Oracle without having leverage over them in some way, you are g
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"nobody ever got fired for buying oracle"
Re:Consulting (Score:4, Interesting)
I wasn't in legal, I was in IT, but thats pretty much it. I was in the room when they scoffed at the amendment, and our CFO basically said "you gave us the quote, it was your bid, your number. We didnt negotiate it, we take it as is, but you'll deliver us the entire implementation for that or we dont have a deal. It was one of the best quips I have ever heard in negotiations and it stuck with me. They came back and signed, and believe it or not, that was our 5 year cost. Took 9 months to implement, and boy were they fast. They wasted no time in getting the project delivered. Full ERP, WMS, Shipping solution, MRP, assets management, accounting suite, the works. They can do it if you make them.
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If someone came to me suggesting Oracle, they would be laughed out of the meeting.
If they came back and tried it again, they'd be getting pretty close to fired.
Re: Consulting (Score:2)
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> If you can't be part of the solution, thereâ(TM)s money to be made prolonging the problem.
If you can't be part of the solution, you can be part of the precipitate.
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SAP and then Oracle, do people learn nothing (Score:5, Interesting)
Re:SAP and then Oracle, do people learn nothing (Score:5, Insightful)
SAP projects have been plagued with cost overruns
Yes, SAP is terrible.
But replacing them with Oracle, which is far worse, was nuts.
The best way to run a project like this is with your own people.
Obamacare is a good example. Nineteen states implemented insurance market websites (the others use the Federal site).
Kentucky spent the least ($3M) and used state employees.
Oregon spent the most ($300M) and contracted with Oracle.
On roll-out day, Kentucky's site worked smoothly and was widely considered the best.
Oregon's site crashed, and it took weeks of rework to get even basic, sluggish, bloated functionality.
Here's the recipe for success:
1. Use your own people so they have skin in the game.
2. Ensure they have an established track record of working together on successful projects.
3. Starve them of resources so they have no choice but to implement a clean, simple design.
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Seems like they need to learn how to write contracts. If the site doesn't work you don't get paid. Specific requirements for performance and user experience scores.
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For what it's worth, that wasn't Oregon's first IT debacle with Oracle. They fucked over the DMV several years previous by building out a "new system" and installing it everywhere, and it was garbage and took months to make it work right.
Then for some reason, Oregon went back to Oracle for the ACA insurance portal, because either they don't learn, or anyone that did learn had moved to different positions / employment. So they made the same costly mistake and fucked it up again. There were lawsuits, etc.
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But replacing them with Oracle, which is far worse, was nuts.
Oracle is neither good nor bad.
It is a database.
Whether something is a success or not depends on the project management.
The project management here is rubbish.
Did you get a discount on the use of the carriage return key today?
Why did you put every sentence on a new line?
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Part of the problem is the underlying software systems, but much of the problem is customers who want bespoke solutions. If you need an HR or Finance system, by one and use it unmodified, you'll be successful. Buy a solution and customize it, costs are going to be out of control.
Re: SAP and then Oracle, do people learn nothing (Score:1)
Then there's MNLARS (MN drivers license system) approved in 2008 for $41 million to replace a system built in 1982.
Booted out HP in 2014 (paid them $16 mil anyway) as nothing has been completed, were going to go with internal resources.
By 2019 project was still essentially nothing, budget was now $100mil.
Criticism was blamed on "politics".
https://www.twincities.com/201... [twincities.com]
https://spectrum.ieee.org/minn... [ieee.org]
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You make some good points but you underplay the enormity of the waste, fraud, and abuse in the healthcare.gov rollout.
the rollout of the healthcare.gov website ballooning the initial $93.7M budget to an ultimate cost of $1.7B.
Source: https://d3.harvard.edu/platfor... [harvard.edu]
Mind you, the website rollout was not involved in actually managing the insurance plans, it was simply an enrollment portal...
Replacement technology (Score:5, Insightful)
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The article is only about west sussex council. Sussex consists of both east and west sussex, the east is not relevant to this story.
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Maybe they could share East Sussex systems?
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I was wondering the same, if the costs for this system are so high that paying clerks to do it with typewriters and index cards and filing cabinets would actually cost less and have more flexibility.
The really sad part is that the UK basically invented modern bureaucracy during the Empire period, one would think that they'd be better at implementing it.
Not a municipal skill (Score:3)
Projects like these should be managed by a provincial/state/or national government. Some entity that will make these purchases more than once. And someone who can push back on both the vendors and on the bureaucrats.
Now if the purchaser is the federal government then you have a whole different problem. In Canada they launched a project to do federal government payroll The trouble is the pay system has evolved over 150 years through negotiations with different unions. The changes have been percentage increases, or tweaks to how hours are calculated, or bumps in pay based on doing different duties. The existing rules are now self contradictory in many places and would be a nightmare to describe. So before upgrading to a new system the government would have had to fully described what they had, maybe gone back to the unions and tried to negotiate a sane pay system They didn't and we got https://en.wikipedia.org/wiki/... [wikipedia.org]
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MARIADB is FWEE FWEE FWEE.... (Score:1)
...and not ran by a sociopath friend of an orange idiot.
And yet local governments keep sucking up to [X}aaS pieces of shit obsolete providers. Why OH WHY would you give $50 million to a company that can't provide what they sold you for $30 million???
"Oh so sorry, that car battery you bought was listed at $200 but now that you're checking out after we've detained you for two years it's really $500."
Throw out Oracle. Throw out SAP. Throw out Larry "douche" Ellison.
Maria is free. MySQL is free. Postgres i
Um...Not Actually SaaS? (Score:2)
I thought the way SaaS works is that you rent someone's SaaS software, and thus don't have to build it.
How is this council on the hook for building software it's going to have to rent?
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Not necessarily a doomed idea in theory; it's not like the road to success is generally paved with doing your own idiosyncratic thing from scratch for all parts of a large project; but has a nasty history of
When you are in a hole stop digging (Score:2)
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"It's probably too late."
That's what they said before, and that's what you're saying today.
So you have inadvertently provided yet another sunk cost fallacy right here in front of our eyes.
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Holy shit did you just invoke the sunk cost fallacy while decrying others for invoking the sunk cost fallacy?
"I was fired for choosing Oracle" (Score:3)
Needs to start happening.
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Shrink (Score:3, Insightful)
I have decades of experience in all sorts of software, and I can't see what is the advantage of creating these huge, complex and expensive systems.
It is like some sort of drug. We need to expend more, more, more, we need to use bigger and bigger systems, with huge quantities of storage, when the real tasks are really small and simple.
What it is needed is to stop and check what really work, and to develop "something" that can deal with future natural capacity grow, using preferable small cheap devices that can be replaced by any brand ones when needed, not to be attached to particular technology providers. Today is $50 million, tomorrow will be $500 million and counting if they follow that path.
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It is like some sort of drug. We need to expend more, more, more, we need to use bigger and bigger systems, with huge quantities of storage, when the real tasks are really small and simple.
I get what you're saying, but my experience is that simple systems can become very complex much quicker than people think. It's like the three body problem - two is simple, even 10 independent 2 body systems is simple, so why does it all go pear shaped when you add three? Lots of stuff is like this. Complexity can be deceptive.
You really need strong leadership who can relentlessly drive simplicity - and it will still be complicated. But when you have lots of vested interests who want their pet feature, this
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Yes ... humans, and humans in quantity, are troublesome.
The important thing is to have a strong person in charge, that can decide quickly the right things. This way no convoluted, complex, expensive and not so useful thing will be done. And to expend enough time deciding "WHAT" needs to be done, debugging on paper until the result is the right one. Then, go to find who could do that, even if could be done internally just purchasing the "right" technology for the task at hand.
But to start without a c
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Freakin' humans always bring chaos to projects.
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You are right in the sense that complexity can be deceptive, 100% with you.
But I think it is important to pursue simplicity all the time. I have been working with big enterprise servers, mini computers, all the way to raspberry pi and arduinos, and it is so special the way you can unfold the need of power when you distribute and go to edge computing. These are modern technologies that can help to think smaller, to process more near the source, to let less in a central behemoth.
And right now I am writ
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What it is needed is to stop and check what really work
If this was done then the Oracle migration would have worked too. These kinds of projects fail on the onset with poor statements of requirements, poor project management, poor change management, and too much needless customisation.
Of course... Oracle (Score:2)
Has ANY Oracle project in history ever come in on time and on (or under) budget?
Re: Of course... Oracle (Score:2)
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Of course, plenty. They just don't end up in the news. Oracle is no different than any other large database. The failures are the result of poor requirements, poor project management, and senseless customisation. Epic failures can happen for Oracle, SAP, IBM, virtually anyone with a database. All these companies exist for the purposes of saying yes to the client. If the client is unclear and customises something, or presents a use case that doesn't work the result will always be "yes we can do that *updates
Oracle Strikes Again (Score:2)
Like SAP, Oracle is well-known for sucking gullible companies into an "easy, straightforward" transformation project, and then crippling their infrastructure and dragging the project out, for years in some cases. In the end, the parasite takes over the host and drains it of its life force.
The simple things turn into ridiculously complex things, the small stuff turns into huge side quests, and so forth and so on. It never gets to the end because there is no end, that's not part of the plan. Oracle doesn't co
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They['e specifically done this before with UK councils -- see Birmingham, where the failure was much larger
'Government' and 'IT' (Score:2)
"Oracle-based transformation project" (Score:3)
Simple - we transform your cash into our profits! Any value which you may receive in turn is coincidental, and possibly even accidental...