Don’t fire staff before going live – lessons from a SAP project failure

By Tony Collins

When an NHS chief executive spoke at a conference in Birmingham about how he’d ordered staff cuts in various departments in advance of a patient administration system going live – to help pay for the new system – it rang alarm bells.  

This is because more staff are usually needed to cope with extra workloads and unexpected problems during and after go-live. That’s a lesson BT and CSC gradually learned from Cerner and Lorenzo go-lives under the National Programme for IT. It’s also a lesson from some of the case studies in “Crash”.

The trust chief executive who was making the speech was managing his go-live outside of the NPfIT. He didn’t seem to realise that you shouldn’t implement savings in advance of a go-live, that the go-live is likely to cost much more than expected, and that, as a chief executive, he shouldn’t over-market the benefits of the new system internally. Instead he should be honest about life with the new system. Some things will take longer. Some processes will be more laborious.

Bull-headed

If the chief executive is bull-headedly positive and optimistic about the new IT his board directors and other colleagues will be reluctant to challenge him. Why would they tell him the whole story about the new system if he’d think less of them for it? They would pretend to be as optimistic and gung-ho as he was. And then his project could fail.

Much of this I said when I approached the trust chief executive after his speech. It wasn’t any of my business and he’d have been justified in saying so. But he listened and, as far as I know, delayed the go-live and applied the lessons.

Disaster

Now a SAP project disaster in the US has proved a reminder of the need to have many extra people on hand during and after go-live – and that go-live may be costlier and more problem-laden than expected.

The Post-Standard reported last month that a $365m [£233m] system that was intended to replace a range of legacy National Grid’s payroll and finance IT has led to thousands of employees receiving incorrect payments and delayed payments to suppliers. Some employees were not paid at all and the company ended up issuing emergency cheques.

Two unions issued writs on behalf of unpaid workers, and the Massachusetts attorney general fined National Grid $270,000 [£172,500] for failing to comply with wage laws. New York’s attorney general subpoenaed company records to investigate.

Hundreds assigned to cope with go-live aftermath

National Grid spokesman Patrick Stella said the company has assigned hundreds of employees, including outside contractors, to deal with problems spawned by the new system. Many of them have been packed into the company’s offices in Syracuse in the state of New York. Others are dispersed to work at “payroll clinics,” helping employees in crew barns or other remote locations.

For more than a year National Grid worked to develop a new system to consolidate a patchwork of human resource, supply chain and finance programs it inherited from the handful of U.S. utilities it has acquired. The system, based on SAP, cost an estimated $365m, according to National Grid regulatory filings.

Stella said the glitches to be expected when a complex new system goes live were exacerbated in the wake of Sandy, when thousands of employees worked unusual hours at unusual locations. “It would have been challenging without Hurricane Sandy,” Stella said.

SAP software woes continue to plague National Grid.

Payroll blunder.

National Grid struggles to fix payroll problems.

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