Audit: Oracle ERP Project Wracked With Woes

A US$66.6 million Oracle ERP (enterprise-resource-planning) project undertaken by Pennsylvania's Liquor Control Board has been marred by inflated costs, staffing woes and operational problems, according to a report by the state's auditor general.

The PLCB oversees the wholesale and retail sale of alcohol in Pennsylvania through a chain of state-run retail stores. While PLCB's sales rose from $1.41 billion to $1.51 billion between its fiscal 2008 and fiscal 2010, net profits from store operations dropped 47 percent to $68 million, the audit states. Problems with the ERP system "appear to be one of the primary causes for this major downturn in profits."

The audit report was flagged this week by a Pennsylvania think tank, the Commonwealth Foundation, which espouses free-market principles and believes the stores should be privatized.

"Unfortunately [the Oracle system] was a waste of taxpayer money that failed to do what it set out to do," said Jay Ostrich, director of public affairs for the group. "It exposed why government has no business in business. It's only a symptom of a much sicker patient and the PLCB overall."

There seems to be strong public sentiment toward privatizing retail liquor stores in Pennsylvania. A recent poll by Quinnipiac University found that 69 percent of residents surveyed were in favor of such a move, and a legislative bill that would privatize the industry has been introduced.

If and when liquor sales go private in Pennsylvania, the Oracle system should be included in an auction of the PLCB's assets, Ostrich said.

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