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UK govt Matrix has unenviable task of consolidating several different ERP systems

Software to support 46,000 users as group part of £900m program to simplify central government back end

The UK government has kicked off procurement of an ERP system for eight Whitehall departments which consolidates nine different software systems – a project potentially more complex than a snake's wedding.

According to civil service chief operating officer Alex Chisholm, the group, dubbed Matrix, is the "trickiest one" among the five clusters of government departments each set to procure new ERP systems together, according to the Shared Services Strategy first set out in March 2021. The approach promises to save £2 billion ($2.47 billion) on the back of a £900 million ($111 million) investment.

The strategy details how eight central government departments – currently running disparate ERP, HR and finance applications – will come together under a single SaaS ERP system.

Earlier this week, the Department for Business, Energy & Industrial Strategy (BEIS) published a prior engagement notice to begin talks with suppliers who are being offered the chance to build a system to support 46,000 users.

It said it was "conducting a single procurement process… to determine the fit for purpose consortium of suppliers."

"At this stage, it is envisaged that the procurement may result in either the award of modular and separable contracts for the suppliers that constitute each consortium," the notice said.

For example, the ERP and SI services may be awarded separately or a prime contractor-to-subcontractor model may come into play.

"The Programme… will design, develop, and procure the new technologies and capabilities that are required to help modernise their 'back office' systems. It will deliver a high quality, and good value, system and support service to help streamline the transactions and activities that underpin the way departments are run," the notice said.

But it belies the difficulties the Matrix cluster faces. For example, the Department for Health and Social Care went live with Microsoft Dynamics 365 in 2020, while HM Treasury went live with Oracle Cloud ERP in 2017.

To get all eight departments onto a single system, the program must grapple with the challenge of who gets to move the least when it comes to the choice of the future ERP system.

The difficulty of resolving these competing interests has resulted in the Matrix group being split into fast movers and the following group. "The following group need to recognise their future convergence path to make sure they are going to be part of a single system in the future," Chisholm told MPs earlier this month.

He told Parliament spending watchdog the Public Accounts Committee that forming the group had already presented difficulties. "What unsettled people at an early stage in the cluster formation was the thought among those people who had relatively up-to-date recent systems, including the Treasury, that they would have to quickly change to align with this new cluster approach, and that that was going to be cutting across their existing plans and existing contracts. The fast movers and slower followers approach has helped from that perspective," he said.

Chisholm admitted that not everyone was on board in the early days of the Shared Services Strategy. "I definitely recall that, over that summer and autumn of '20, some of the departments were saying, 'Do we really have to work in this way?' They had had this history of being able to work independently, and some people liked the idea of saying, 'I can just decide it myself and do exactly what I want.'

"So we had to work quite hard to show the overall benefits of the case of working together – the benefits of scale. In some cases, we were also saying, 'Look, this is a cross-government programme. This is expected of you.'

"There was also a sense in which we relieved that tension by saying, 'You're not going to have to break your existing contract, because you can onboard at the end of your contract, so long as you are aware of that future conversions requirement and are committed to that,'" Chisholm said.

He declined the opportunity to say all constituent departments were 100 percent behind moving to a single system, but instead pointed out that the Cabinet Office, his department, has had to move to a new cluster. It currently sits with the Department for Work and Pensions and the Ministry of Justice on Oracle's "single operating platform."

"We have all had to sign our commitment and to put people and money against that, and the programme business case that was formally submitted and that has been approved by the Chief Secretary was done in the name of all of those Departments, so there is a high level of commitment even in the Matrix one, which is the trickiest one of the five [clusters]," Chisholm said.

In its procurement notice, BEIS said it expected to launch the contract notice, triggering formal competition, on April 30, 2023. ®

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