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City council cans ERP project, keeps details of replacement supplier secret

New system 'commercially sensitive' but set to go live in October

Leeds City Council is keeping the replacement of its Oracle finance system secret after deciding to abandon plans for a £44 million ($54 million) ERP system to support finance, HR and payroll.

In 2021, the local authority for Leeds, a city in northern England, kicked off procurement of a core ERP system that was to create a 20-year relationship following the replacement of its old business applications, including the finance system based on Oracle and an HR and payroll system based on SAP.

The council's "business change program" would be "supported by the implementation of cloud-based, fully integrated, people and finance software-as-a-service solutions utilizing a post-modern ERP technology strategy," it said at the time.

But now it has changed its mind. In a statement to The Register, a spokesman said: "Early in 2022 Leeds City Council reviewed its proposed procurement route in light of rapid developments in the market. As a result, that route was discontinued and no contracts were offered. The council is instead pursuing a transformation programme that will result in a phased replacement of systems, processes and ways of working across core business functions: finance, HR, payroll and 'procure-to pay'."

But why? Leading up to the first tender, the council seemed adamant that a single solution was best.

"An integrated single solution, commonly known as an Enterprise Resource Planning system or ERP, is commonplace amongst Councils, being the most popular type of solution for managing financial and people information. This tried and tested technology is now delivered as a Cloud based service, meaning that the Council will not need to invest in additional hardware," a report [PDF] said in 2020.

The single integrated system was "the most appropriate way of meeting the aims of the Council, whilst ensuring ongoing sustainability of the Council's core systems at the lowest procurement and implementation cost," it concluded.

However, the result of the procurement was disappointing. "Suppliers did not deliver submissions which met our requirements on transformation or technology," a new report [PDF] said in 2022. Three suppliers bid the same solution with minor differences, while one was undecided on technology and the remaining supplier was "uncertain about progressing," the council document said.

With outside advice from consultancy EY, the council concluded that the original 24-month timeline was "unrealistic and high risk."

As a result, the council is adopting a "phased" approach, replacing the finance and HR/payroll systems with different technology in different projects.

Both projects will fit in a three to four-year transformation, the council said, but the finance implementation is a "24-month journey… to be operational and deployed to financial services staff [in] October 2023," suggesting that the journey has already begun. The cost estimate for phase one is £10.48 million ($12.93 million).

But with which supplier? The council said it would buy from an existing framework deal and that the "chosen Finance technology is being kept as commercially sensitive so that the authority can negotiate with the supplier on the cost of the services the supplier provides to the authority."

The council spokesman has been asked to identify a new supplier.

It is not only internal ambition putting a ticking clock on the project. Both Oracle's finance system and SAP's HR/payroll system will reach the end of life by 2025 when mainstream support comes to a close.

Council taxpayers in the Yorkshire capital can rest assured that the authority they pay for has chosen the low-risk option in its dramatic 18-month U-turn. ®

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