UK council dodges £100k hosting bill, opts for £6.5 million ERP migration

You must be Barking and Dagenham, the east London borough

The London Borough of Barking and Dagenham is tendering for a new £6.5m ERP system after balking at the £100,000 annual price hike for continuing to run its hosted Oracle E-Business Suite solution.

The council is in the market for a hosted software system that will support a more user-friendly UI and improved business processes, according to tender documents published last week.

The London authority claimed a long list of factors led it to seek a new supplier, not least of which is the fact it is running on a hosted Oracle 12.1.3, which will be out of support at end of December 2021.

"Council would not receive any software updates & patches – including Year-End Payroll updates – from January 2022 onwards. This issue alone necessitates the move to an alternative solution," a council document said.

But in making this move, the public body is also looking to avoid a £100,000-a-year cost increase in continuing to run its hosted solution.

The story goes back to 2000, when the council first bought Oracle e-Business Suite to bring the processing, management and reporting of HR, payroll, finance, into a single system. First, it was hosted by the council, then on a platform shared by six other London Boroughs – a CapGemini project called OneOracle. It was last upgraded in 2014 to Release 12.

In May 2018, the east London council left that hosting agreement and began joint hosting with northwest London's Brent council in a shared data centre. But Brent has decided to move to Oracle Cloud during 2021, leaving Barking and Dagenham - which sits just north of the Thames and 18km (11 miles) east of the City of London - with an annual cost increase of £100,000 to host the system alone.

Why not upgrade Oracle? The council document said only that it is avoiding £5.6m over 10 years by migrating to a new system, based on the "estimated cost of implementing and operating a replacement system compared to the cost of upgrading, operating and replacing Oracle Release 12."

The council hopes the new system will "support the Council's core transformation programme". But it is unlikely to result in further cashable savings, the document said.

The council also said it is looking to buy a Cloud Software-as-a-Service solution, as does the prior information notice, published in March. But the contract notice merely asks for a "hosted software solution" so presumably, bidders could propose a system hosted in a data centre on dedicated hardware.

Other than that, the tender asks for the usual bundle of ERP features in one bag: HR, payroll, purchase-to-pay, expenses, sales-to-cash, and general ledger accounting. It is looking for capabilities including reporting and analytics, configurable workflows, Microsoft Office 365 integration and mobile capabilities.

The contract is set to be awarded for five years, and can be extended for another five. Barking and Dagenham council expects to issue invitations to tender in July, after the first round of the competition. ®