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UK's NHS goes to market for $2b HR and payroll system
Plans afoot to replace Oracle EBS/AIX system used by 1.8 million staff dating from 2008
The UK's National Health Service (NHS) is in the market for a company to manage HR and a new electronic staff records system as part of a procurement worth up to £1.7 billion ($2 billion).
One of the world's largest employers, the NHS pays around 1.8 million staff via its current Oracle E-business Suite-based HR and payroll system.
The publicly funded service is looking for a company to take over the running of that system, as well as implement its replacement, according to documents released this week.
The procurement takes place via the NHS Business Services Authority, an executive non-departmental public body of the Department of Health and Social Care.
Under a program dubbed Future NHS Workforce Solution, the authority requires "a new transformed integrated workforce management solution for the NHS in England and Wales," the tender notice said.
The authority wants a supplier to manage the current electronic staff records (ESR) service as well as "transform, develop, implement and manage a future NHS workforce solution and once migration of user organisations completes, decommission the ESR service."
The ESR is provided via NHS Shared Business Services – a joint venture between the health service and French outsourcer Sopra Steria – but is run by a managed service contract which expires August 2025. Oracle eBusiness Suite underpins the current integrated HR, payroll, learning management, and business intelligence capability.
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IBM won a contract to run the ESR in 2014, although the system goes back further. According to a PwC review of the system, the implementation was completed by March 31, 2008. "The Oracle database that supports the ESR Application is hosted on six production servers which run on the AIX [IBM's Unix flavor] operating system," the report said.
From September 2025, the NHS expects the supplier to run the existing ESR service including ongoing development. It then expects the vendor to "design, develop, configure and test the future NHS workforce solution from contract award including pilot implementation."
Implementation and running the new system will be down to the supplier as well as its decommissioning.
The contract is also an HR outsourcing deal. It addresses talent acquisition, core HR, payroll, compensation and benefits, learning, career development, and performance management.
An earlier procurement notice had considered a replacement integrating ERP and HR/payroll into one system.
A discovery project launched in 2020 was designed to "build upon the work being performed within the Electronic Staff Record (ESR) and Integrated Single Finance Environment (ISFE) programmes to identify the likely benefits and drawbacks of adopting an integrated ERP versus separate ESR and finance systems," it said.
However, the current notice shows HR/payroll is being procured separately to the project to replace the ERP system, a £300 million project judged "red" risk by government watchdog the Infrastructure and Projects Authority, in 2021. The 2022 report reduced that assessment to amber. ®