Clouds gather over Mercury energy’s SAP development

Clouds are gathering over Mercury Energy's multimillion-dollar SAP implementation. The first stage of the project, worth more about $28 million, has gone in on time and within budget. However, Computerworld understands Mercury's chosen implementation partner, Melbourne-based Tui Consulting, is pressing the Mercury board for a gold-plated solution for stage two - a billing and customer care package. The entire package would be worth around $60 million.

Clouds are gathering over Mercury Energy’s multimillion-dollar SAP implementation.

The first stage of the project, worth more about $28 million, has gone in on time and within budget. However, Computerworld understands Mercury’s chosen implementation partner, Melbourne-based Tui Consulting, is pressing the Mercury board for a gold-plated solution for stage two — a billing and customer care package. The entire package would be worth around $60 million.

A source close to the power company says every change Mercury wants to make to the base product is costing at least $2 million because of the complexity and resources involved with consultants.

Although stage two hasn’t yet begun, it is believed that the cost imposed by Tui Consulting is likely to cause a budget blow-out. However, the Mercury board is understood to be staying with Tui.

Computerworld also understands that the $25.3 million loss for the year ended March 31, which was announced by Mercury last month, does not include write-downs of the IT system. Mercury has blamed the loss on a $128 million charge because of the power crisis.

Despite repeated attempts to contact Mercury IT manager Nigel Bonser, Mercury general manager of strategic services Patrick Denham and Tui Consulting’s Mike Clements, none have been available for comment.

The matter is complicated by the fact that Mike Clements, who was IT manager at Mercury Energy when the contract was awarded to Tui last year, then left to take a position as a consultant at Tui.

The situation appears similar to a case last year when police IT manager Greg Batchelor awarded a contract for a new communications system to Australian-based Intergraph, then resigned from the police to join Intergraph. Computerworld’s attempts to find out how big Tui Consulting is, what areas it operates in and how long it has been operating were met with a statement that it would issue a press release at a later date.

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