SAP migration blamed for Parisian payment turmoil

Paris has blames payment delays on a new finance system from SAP

A clash with the legacy architecture was only to have been expected when the city of Paris rolled out new finance software from SAP to replace around 50 existing applications, some of them 20 years old. But the migration shouldn't have stopped work on the €23 million restoration of the 17th century church of Saint Sulpice.

However, once all levels of the city administration started using the SAP software, the city ran into problems processing payments on time, it said Thursday.

Paris has an unusual status in French administration: it is both a département (a regional government) and a city. City Hall thus has two sets of accounts to manage, corresponding to the different legal responsibilities of each layer of government.

The new SAP system, which the city calls Alizé, has handled the €2 billion annual budget for the département since May 2007, but at the city level the switch didn't take place until February 2008. The migration involved training 1,000 accounting staff who between them handle over a million invoices.

As the payment delays accumulated, the city authority assigned a team of 25 to catch up with the backlog, paying special attention to the invoices of its most fragile suppliers, it said yesterday. In the first half of 2008 the city paid invoices worth more than €2 billion, more than in the same period last year, and things were back to normal by mid-July, it said.

That wasn't enough to keep work going on the church of Saint Sulpice, though. Suppliers stopped delivering materials to the site last Friday in protest over late payment of their invoices, according to local press reports.

The city authority said the contract to restore delicate masonry at the church was split between a number of companies in a complex tender offer, one of the causes of the delays in payment.

The city will pay outstanding invoices, including interest on the arrears, within a few days, it said in a statement.

City officials did not respond to requests for further comment on the cause of the payment delays.

An SAP spokeswoman disputed the city's view of the situation.

"What's happening isn't related to the solution we installed," said Françoise Nové-Josserand, adding that it wasn't for her to comment on the state of the city's finance department before the software migration took place.

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