Incident: Payroll Underpayment Due to Botched Oracle System Implementation at Next

Published Date: 2022-07-17

Postmortem Analysis
Timeline 1. The software failure incident at Next, causing months of salary underpayment, started to emerge in February [130019]. 2. The article was published on 2022-07-17. 3. Estimation: The incident likely started in February 2022.
System 1. Next's new payroll system implemented by Oracle [130019]
Responsible Organization 1. Next (retailer) [130019]
Impacted Organization 1. Next employees, including store staff, who were underpaid and faced financial difficulties [Article 130019] 2. Pension funds of employees who had contributions deducted but not invested [Article 130019]
Software Causes 1. The software causes of the failure incident at Next were primarily due to the botched implementation of a new computer system after outsourcing its payroll functions to the US technology company Oracle [130019].
Non-software Causes 1. Outsourcing the payroll functions to the US technology company Oracle [130019] 2. Payroll provider errors made by Asda's external payroll provider [130019]
Impacts 1. Some Next staff were deprived of pay during the cost of living crisis, affecting their spending power, and forcing some to rely on food banks or hand back holiday days to make ends meet [130019]. 2. Employees were underpaid by as much as £200 a month, with some having pension contributions deducted from their pay that were not invested in pension funds [130019]. 3. The payroll issues affected workers paid weekly and monthly, with some experiencing significant financial losses [130019]. 4. Next had to assign a dedicated team to spot errors and pay missing money to workers every week, indicating a strain on resources and operational efficiency [130019].
Preventions 1. Thorough testing and validation of the new payroll system before full implementation could have helped prevent the software failure incident [130019]. 2. Proper training for staff on how to use the new software system effectively could have mitigated errors and issues during the transition [130019]. 3. Close monitoring and oversight during the integration of in-house applications with third-party platforms, such as Oracle's software, could have identified and addressed potential compatibility issues early on [130019].
Fixes 1. Implement thorough testing procedures before fully deploying the new computer system to ensure its compatibility and accuracy with existing systems [130019]. 2. Provide comprehensive training to staff members on how to use the new payroll system effectively to minimize errors and ensure proper implementation [130019]. 3. Consider bringing the payroll functions back in-house to have better control over the software and avoid potential issues associated with outsourcing critical software [130019].
References 1. Next spokesperson 2. Sunday Times 3. The Church of England’s pension board 4. Asda, the supermarket chain 5. Oracle (US technology company) 6. Living Wage Foundation 7. Investors who backed a 50% pay rise for Next's chief executive 8. Next employees affected by the payroll issues [130019]

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization, multiple_organization (a) The software failure incident having happened again at one_organization: Next, the retailer, experienced a software failure incident related to payroll issues caused by the botched implementation of a new computer system. This incident is not the first time this year that payroll issues have affected a large UK employer, as Asda, another company, also faced similar problems with its external payroll provider making errors affecting the wages of staff [130019]. (b) The software failure incident having happened again at multiple_organization: The article mentions that Asda, the supermarket chain, admitted to facing payroll issues with nearly 11,000 errors made by its external payroll provider, affecting the wages of 5,500 staff. This indicates that multiple organizations, including Next and Asda, have experienced software failure incidents related to payroll systems [130019].
Phase (Design/Operation) design, operation (a) The software failure incident at Next was related to the design phase. The article mentions that Next usually designs its own software but struggled to make Oracle’s software work with its own. This struggle with integrating their in-house applications with third-party platforms led to payroll errors affecting staff salaries [130019]. (b) The software failure incident at Next was also related to the operation phase. Employees had pension contributions deducted from their pay that were not invested in pension funds, indicating issues with the operation or misuse of the system. Next acknowledged the problems caused by these payroll errors and assured that they were resolving them as a priority [130019].
Boundary (Internal/External) within_system, outside_system (a) within_system: The software failure incident at Next was primarily caused by issues related to the botched implementation of a new computer system after the decision to outsource payroll functions to Oracle [130019]. Next typically designs its own software but faced challenges in making Oracle's software work with its own, leading to payroll errors affecting staff payments and pension contributions [130019]. The company acknowledged the need to integrate their in-house applications with third-party platforms and mentioned having a dedicated team to address errors and rectify payment issues [130019]. (b) outside_system: The software failure incident at Next was exacerbated by external factors such as the decision to outsource payroll functions to Oracle, which led to months of salary underpayment for staff [130019]. Additionally, the incident occurred during a period of rapid consumer price inflation, impacting workers' spending power and exacerbating the effects of the payroll errors on employees [130019].
Nature (Human/Non-human) non-human_actions, human_actions (a) The software failure incident at Next was primarily due to non-human actions, specifically the botched implementation of a new computer system after outsourcing payroll functions to Oracle [130019]. (b) However, human actions were also involved in the failure as Next struggled to make Oracle's software work with its own, leading to the need for a dedicated team to spot errors and rectify the missing payments to workers [130019].
Dimension (Hardware/Software) software (a) The software failure incident at Next was primarily due to contributing factors originating in software. The issue arose from the botched implementation of a new computer system after the retailer decided to outsource its payroll functions to Oracle, a US technology company. Next usually designs its own software but faced challenges in making Oracle's software work with its own, leading to payroll errors affecting staff salaries and pension contributions [130019].
Objective (Malicious/Non-malicious) non-malicious (a) The software failure incident at Next related to salary underpayment was non-malicious. The issue stemmed from the botched implementation of a new computer system after the decision to outsource payroll functions to Oracle. Next struggled to make Oracle's software work with its own, leading to errors in payroll processing and underpayment of staff [130019].
Intent (Poor/Accidental Decisions) poor_decisions (a) The software failure incident at Next was primarily due to poor decisions. The issue stemmed from the decision to outsource the payroll functions to Oracle, which led to months of salary underpayment for the staff. Next had been struggling to make Oracle's software work with its own, indicating a poor decision in the integration process [130019].
Capability (Incompetence/Accidental) development_incompetence (a) The software failure incident at Next was related to development incompetence. The issue arose from the botched implementation of a new computer system after the retailer decided to outsource its payroll functions to Oracle, a US technology company. Next, which usually designs its own software, struggled to make Oracle's software work with its own, leading to payroll errors affecting staff salaries and pension contributions [130019]. (b) The software failure incident was not explicitly mentioned to be accidental in the provided article.
Duration temporary The software failure incident at Next related to salary underpayment was temporary in nature. The article mentions that the problems emerged in February and have been ongoing for months, indicating that the issue was not permanent but rather caused by specific circumstances such as the botched implementation of the new computer system and the struggle to make Oracle's software work with Next's own software [130019].
Behaviour omission, value, other (a) crash: The software failure incident in the article is not described as a crash where the system loses state and does not perform any of its intended functions [130019]. (b) omission: The software failure incident in the article is related to the system omitting to perform its intended functions at instances, specifically causing underpayment to staff due to payroll errors [130019]. (c) timing: The software failure incident in the article is not related to the system performing its intended functions correctly but too late or too early [130019]. (d) value: The software failure incident in the article is related to the system performing its intended functions incorrectly, leading to underpayment of staff and errors in pension contributions [130019]. (e) byzantine: The software failure incident in the article is not described as the system behaving erroneously with inconsistent responses and interactions [130019]. (f) other: The software failure incident in the article is not specifically categorized under the options provided. The behavior described involves issues with the implementation of a new computer system, outsourcing payroll functions to Oracle, and struggling to integrate in-house applications with third-party platforms, leading to payroll errors and underpayment of staff [130019].

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence basic, property, other (a) death: There is no mention of any deaths resulting from the software failure incident in the provided article [130019]. (b) harm: The article does not mention any physical harm caused to individuals due to the software failure incident [130019]. (c) basic: The software failure incident impacted some Next staff members by depriving them of pay, leading some to rely on food banks or hand back holiday days to make ends meet [130019]. (d) property: The software failure incident resulted in underpayment of salaries to Next staff, with some employees being underpaid by as much as £200 a month [130019]. (e) delay: The software failure incident did not lead to any delays as mentioned in the article [130019]. (f) non-human: The software failure incident did not have any direct impact on non-human entities as per the article [130019]. (g) no_consequence: The software failure incident had real observed consequences on the Next staff, as mentioned in the article [130019]. (h) theoretical_consequence: The article does not discuss any potential consequences that were theorized but did not occur due to the software failure incident [130019]. (i) other: The software failure incident led to some workers having pension contributions deducted from their pay that were not invested in pension funds, which Next promised to rectify [130019].
Domain sales [130019] The software failure incident reported in the article is related to the sales industry, specifically affecting the retailer Next's payroll system. The failure occurred due to the botched implementation of a new computer system after Next decided to outsource its payroll functions to Oracle, a US technology company. This failure led to months of salary underpayment for Next staff, impacting workers paid weekly and monthly. The issues with the payroll system deprived some employees of their pay during a period of rapid consumer price inflation, affecting their spending power. The article highlights how Next had to assign a dedicated team to address errors in the software and ensure missing payments were made to workers every week.

Sources

Back to List