City, University of London has abandoned procurement of a new £17 million ($20 million) ERP system following a 10-month-long competition exercise after it initially failed to understand the complexity of its own requirements.
As the support deadline looms for its current ERP system, based on SAP ECC6, the 20,000-student institution published a legal notice which said it had decided not to award the contract.
“During the procurement, it was realized our requirements were more complex than had originally been anticipated. We do not have confidence that a contract awarded under this procurement would best serve our objectives,” it said.
The problem, the notice said, was down to new circumstances as much as a failure to understand the requirements.
“The scope of our requirements changed and we now envisage combining the exercise to replace the ERP system with a wider programme of IT modernisation rather than conducting separate exercises, which may to lead to duplicated expense and challenges relating to interoperability. We intend to plan for a new procurement in the very near future on that basis,” it said.
The organization, which pulls in £246.4 million ($294 million) in income each year, might hope that that very near future comes soon as the support deadline for its current SAP solution runs out in 2027, although there is the option of purchasing limited extended maintenance until 2030.
In February 2022, City University began sizing up the market for a new SaaS ERP system to replace its SAP ECC software in a deal that looked set to be worth up to £17 million ($20 million).
It was looking for a supplier to provide, implement, and support the software and enterprise resource planning (ERP) system to replace the existing ERP and associated systems used by human resources (HR), payroll, finance, and procurement.
“City is seeking a SaaS solution that will enable improved visibility of strategic information across the university for HR, payroll, finance, and procurement whilst improved usability and control will support our staff, students and partners,” the document said at the time.
The plan was to support 100 users for HR, finance, payroll, and procurement, and around 2,200 staff more broadly in a contract expected to last 10 years.
According to a Freedom of Information response posted in December 2021, the university currently relies on SAP version is ECC6 EHP5, with no plans to upgrade along the SAP path. At the time it said it would tender for a replacement “shortly”.
The university has been contacted by The Register and given the opportunity to say why it struggled to scope the project and what it might do to mitigate risks of running out of road on SAP support.
On the one hand, it is concerning that the university failed to properly scope the requirements for such a vital piece of software before it began talking to suppliers.
On the other hand, at least it has realized the problem and is trying to go back and fix it, which is better than changing the scope after the project is well underway. Surrey County Council, for example, is experiencing an 18-month delay to its project to replace SAP with Unit4, at an additional cost of £3.9 million ($4.6 million), in part because “the implementation requirements have evolved,” it told The Register.
The lesson for anyone looking to replace an ageing ERP system is that SaaS software might sound good – but beware of the complex customizations built up in the current solution over the years. Persuading users to work in a different way takes time and tenacity, and it’s not really IT’s job. ®
