A Troubled Project To Replace Oracle With SAP Software Could Cost A New York Gas Utility Nearly $1 Billion
National Grid, a New York gas utility service, may be charged nearly $1 billion for a flawed project that failed to upgrade its internal payroll systems in time, according to an article in IDG News Service.
In November 2012, National Grid replaced its old Oracle system with SAP software that was initially estimated to cost about $383.8 million, according to a recently released audit cited by IDG.
But the system had many flaws from the beginning. Those flaws included making incorrect payments to workers, which resulted in lawsuits from unions, according to a previous IDG News Service Article. Hurricane Sandy, the massive storm that hit the East Coast in late October 2012, only made the problem worse.
Citing the audit report made available last week, IDG reported that National Grid had to hire 450 additional contractors to fix the flawed system, with another 400 working on supply chain and financial problems. The upgrade was supposed to be done by September but won't be finished until the end of the year.
Due to all these problems, the project is estimated to cost National Grid a total of $945.1 million. The extra costs will be charged on the company's shareholders, according to the New York Public Service Commission, the utility's regulator.
The audit report largely blames National Grid's decision to hire vendors with little experience handling SAP platforms. It points out Wipro, one of the main vendors, had "virtually no experience" implementing an SAP platform in the US. It also says National Grid should have slowed its schedule to go live since there were questions over its readiness.
This is not the first time we're seeing a huge enterprise software project go wrong. Last year, IBM was involved in a $600 million lawsuit with the tire company Bridgestone over a $75 million computer system project it led. In August, Oregon's Attorney General filed a $200 million lawsuit against Oracle for failure to deliver a healthcare website. In fact, consulting firm McKinsey says almost half of those projects can go awry.
SAP said in an email statement to Business Insider: "We are aware of the challenges experienced at National Grid and we have worked with the customer continuously." National Grid and Wipro were not immediately available for comment. We'll update if they get back to us.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market