Oracle Delivers Little in Philadelphia's Project Ocean

This is the problem with multinational market presence: Err in Philadelphia and you're news in New Zealand. Of course, $18 million bungles involving 500,000 consumers make headlines anywhere, especially when the key player is software mammoth Oracle.

Last week came the news that the city of Philadelphia has halted work on the three-year multimillion-dollar "Project Ocean," a CRM software project in which Oracle was contracted to implement "the most complex and biggest IT system" in the Philadelphia government. When contracted in 2003, Oracle promised to replace the city's outdated water department billing, collections and operations processes with updated Oracle software within twelve months for a total of $7 million.

At that time, then-Philadelphia Water Commissioner Kumar Kishinchand opposed Project Ocean on a number of grounds. Philadelphia CIO Dianah Neff bypassed Kishinchand's objections regarding Project Ocean and signed a contract with Oracle extremely favorable to the company. In 2004, Kishinchand resigned from the commission after a twelve year stint, citing the difficulties with Project Ocean among the reasons.

Kishinchand has become a quotable figure since the story broke, detailing problems with Project Ocean in sources from Holland to Oceania. As Kirshinchand sees it, problems were manifest from the go. Firstly, in charge of the implementation was the Philadelphia financial department and not the water utility, the actual users of the software. Reportedly, the Mayor's Office of Information Services was making a push to take over the water billing system, a producer of $300 million in annual revenue. In Kirchinchand's opinion, Oracle was absolutely unsuitable to create Project Ocean, as the firm had never taken one a municipal water billing system, much less one of Philadelphia's size.

Outgoing CIO Dianah Neff has attempted to put a positive spin on the Project Ocean disaster that some are calling a straight-up "scandal." Neff has citing numerous reasons for Project Ocean's failure, including high personnel turnover and unforeseen technical complexity. Neff seems unwilling to lay too much of the blame on Oracle, though she did cite Oracle inexperience in implementations like Project Ocean. Neff is leaving her public-sector position on September 8, and current negotiations with Oracle will continue long after she's gone.

The project was officially stopped in August 2005, with the Mayor's Office of Information Services seeking to analyze alleged overpayment. Several Oracle employees were suspended, and the poster child in this more scandalous feature of Project Ocean became private contractor Jeanette Foxworth, who billed an average of 82.3 hours (representing about $12,350) per week. In a report to Neff, Philadelphia city controller Alan Butkovitz wrote that "it seems highly improbable that anyone could sustain these kinds of hours for three straight months without a break." (Indeed, especially since Foxworth also reported working part-time in Connecticut at the time.) Today, Foxworth is facing federal grand jury charges for bribing a Connecticut state senator for assisting in winning consulting contracts; she has a November trial date.

By March 2006, city officials had proclaimed the investigation finished and Project Ocean back on track. However, city councilman Frank Rizzo blew the whistle in a budget hearing and subsequently took his concerns to the press. Rizzo called the project a "major scandal" in the Philadelphia Evening Bulletin and claimed then that Oracle had stopped work on Project Ocean altogether. In response, Neff offered little comment except to say that the city and Oracle were "in negotiation."

Butkovitz' office began a review of Project Ocean in February of this year and recently said that his office is about halfway finished with a review of the Oracle/Project Ocean debacle, but hasn't specifically commented on project issues.

The official word from Oracle vice president of consulting Stephen Holdridge on Project Ocean reads, "Oracle believes it has fulfilled its contractual obligations with the city, and we have attempted to work with the city to move this program forward. We continue to stand firmly committed to partnering hand-in-hand with the city under the terms of our contract to ensure that the benefits afforded in their technology investments are realized to the greatest extent." Another Oracle statement stated that "The Project Ocean implementation is still in progress, and Oracle believes that the work performed to date conforms to the current agreement. Oracle has also continued to confirm its commitment to deliver on all its obligations to complete the project."

The persistence of this story in international business media despite quotes of "no comment" and resignations of key players should show Oracle officials that this is one story that will not be ignored. With each day Philadelphia passes without a proper water-utility CRM system, the more the Oracle reputation will erode. Project Ocean may just lead to a draining customer base.