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In deepest darkest Surrey, an on-prem SAP system running 17-year-old software is about to die....
40 million British pounds goes to one brave supplier of replacement
Surrey County Council is shopping around for a new £40m ERP platform as the existing SAP system has been running on in-house servers for so long it is in danger of falling over.
A tender notice published last week says the southern England authority is looking for a "fully integrated ERP system on a software as a service basis… [including] modules for finance, procurement, HR and payroll, which are currently supplied by an SAP system."
It doesn't say how old that SAP system was, or the risk it presents to the organisation. But council documents do.
The business case for the new ERP system states (PDF): "The SAP software dates back to 2004, is out of date and will no longer be supported by SAP beyond 2025… The existing hardware was procured in 2011 with a projected lifespan of five years and is now suffering performance problems, increasing the risk of system failure with serious consequences for the council."
The council docs add: "The existing server hardware has reached end of life and is on expensive extended support, with costs increasing every year."
The capital costs for upgrading the hardware to run a new solution would be £2m, it adds.
In 2004, the council worked with Capgemini to implement SAP R/3 to run finance, HR and payroll, according to a case study from payroll specialist IntelliCorp (PDF). In 2008, the council upgraded from SAP4.6c to ECC 6.0.
As UK councils came under pressure from a central government austerity budget, Surrey officials thought they could save money on ERP support costs. Between 2012 and 2014, measures included migrating the system to the Surrey County Council data centre and bringing it under in-house operational control; creating a new procurement framework in conjunction with East Sussex County Council that was used by both Councils and resulted in annual cost saving of around 40 per cent for support and maintenance services, according to the council docs discussing the need for new support arrangements.
In 2015, the council contracted with an independent support provider which effectively "froze" the council into its version of the software, with limited options for maintenance, upgrades or patching.
The council documents make the seemingly obvious point that "loading of the latest product patches and enhancements reduces the risk of system failure and increases the protection against cyber threats." It was also facing "fundamental interoperability issues" linking ERP to other council systems.
In 2017, Surrey's administration decided to get a new contract for maintenance and licensing, but to stay on the same system because of the cost of moving to a new ERP platform.
Now it is ready to do so. The council is looking for a single supplier to take responsibility for delivering the whole project. The platform could come from a single vendor, or integrate a number of solutions in the cloud, tender documents say.
The SaaS system would be good value and drive "digital transformation," the council added.
So, good news for council services and taxpayers, er, maybe. Not so good news for council workers in IT or back-office roles, however. The business case warns the new system would potentially "reduce back-office staff costs" and "reduce the number of business support staff required to support a SaaS-based technology".
The Register has contacted the council for comment. ®