Collapse in New York: migration with Oracle on SAP cost $1 billion

The unsuccessful project on migration of a payroll system from the Oracle platform on SAP cost the New York utility company of National Grid delivering the electric power and gas to the population $1 billion, IDG News Service reports.

In November, 2012 National Grid replaced the system based on Oracle with a system from SAP that, according to data of recently published audit, had to is initial to cost the company $383.8 million. But in a new system the set of defects from the very beginning was detected, in particular, a system made incorrect payroll of employees that led to submission of numerous claims from professional associations, IDG reports.

Rare failure: the project of migration on SAP matched for utility company of National Grid revelry of Hurricane Sandy in New York. For recovery of networks the company was forced to employ hundreds of additional employees, load of the system which so had shortcomings grew many times. It tightened the project and increased expenses according to it more than twice to nearly one billion dollars

The problems caused by Hurricane Sandy which struck in October, 2012 East coast of the USA only aggravated problems of utility company.

In this timepoint, IDG with reference to results of audit writes, National Grid was forced to hire in addition 450 contract employees to recover the damaged infrastructure whereas 400 more employees delivered also the solution of financial questions. As a result migration of a payroll system which had to come to the end in September, 2012 lasted until the end of the year.

Because of all arisen problems the final cost of migration with Oracle on SAP was $945.1 million, additional costs were assigned to shareholders of the company, according to New York Public Service Commission, the local regulator of the utility sphere.

According to audit outputs, the main problem of the project of migration on SAP was the fact that National Grid employed not enough experienced consultants. In particular, in materials it is said that one of the chief contractors, Wipro, had practically no experiment on implementation of the systems of SAP in the territory of the USA.