Kiwibank write-down of SAP fiasco

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Forums › Finance and wealth management › Kiwibank write-down of SAP fiasco

matisyahu

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#230442 23-Feb-2018 23:15

Just reading and watching regarding the SAP fiasco at Kiwibank which makes me wonder - what is their Plan B now that the SAP project has died; are they going to reboot it and salvage what they can from the project or will they go back to the marketplace to find a new provider. Anyone familiar with the fiasco?

"When the people are being beaten with a stick, they are not much happier if it is called 'the People's Stick'"

Geektastic

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#1963228 23-Feb-2018 23:32

Not specifically this one, but I have worked in two other companies that implemented SAP and it was a massive PITA both times, so not surprised to hear this.

matisyahu

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#1963232 23-Feb-2018 23:51

Geektastic:

Not specifically this one, but I have worked in two other companies that implemented SAP and it was a massive PITA both times, so not surprised to hear this.

It makes me wonder why they went with it - I'm no Oracle fan but I've heard their Core Banking system isn't too bad particularly their FLEXCUBE system seems to be pretty popular with 9 credit unions and co-op money all adopting it without too much drama (NAB and BNZ IIRC also use it as well). I guess SAP has the mystique very much like the old say "no one ever got fired for buying IBM".

"When the people are being beaten with a stick, they are not much happier if it is called 'the People's Stick'"

Linux

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#1963243 24-Feb-2018 00:37

@sbiddle knows all about this mess

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alasta

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#1963311 24-Feb-2018 09:37

I'm not familiar with the Kiwibank situation, but the company that I worked for previously did an SAP implementation across their Australian and New Zealand businesses as an 'experiment' to see if it would work for their entire global operation. It ended up being a total shambles for two reasons:

1.) The Australian and NZ businesses had different legacy systems. The Australians were running the project but they didn't understand the data structure of the NZ legacy system and couldn't be bothered working it out because they thought they knew better.

2.) The user interface was not properly customised so junior call centre staff were given access to all sorts of confusing options that resulted in bad data entry. This very quickly becomes a huge problem in a subscription accounting environment.

My overall impression of SAP is that the back end is pretty robust, but often the system gets the blame when situations like the above arise.

From what I understand Contact Energy implemented SAP a few years ago and had a lot of problems, whereas Chorus wasn't too bad.

sbiddle

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#1963314 24-Feb-2018 09:46

How a SOE managed a $100 write down on a major IT project with basically zero media attention especially in an Election year is truly remarkable. The CEO resigning days before the first $90 write down was announced and Coremod cancelled basically seemed to prevent it from actually gaining any attention.

When you look at the losses incurred from other projects and failures over the years the implications have been huge.

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#1963324 24-Feb-2018 10:14

One of the implementations I suffered was for a large water and sewage company.
It worked fine for the engineering parts of the company ordering pipes, valves, construction services and so forth. My part was negotiating and paying farmers and landowners compensation when we laid new pipes across their land (always done in the UK under statutory compulsory powers).
So when we were told that the would be no exceptions to the no SAP purchase order/no pay rule, we pointed out that the logical outcome of that was me issuing an order to the engineers to do £X thousands of damage so we could pay it, they found they needed an exception. Then another one to pay business losses when we dug up highways outside shops etc etc.
I think they ended up with a lot of exceptions...!