reboots ERP refresh with £934 million procurement

Second time lucky? But departments still lack funding to complete strategy, watchdog says

UK government has put £934 million ($1.15 million) on the table to update an ERP system in a cluster of Whitehall departments, a mega-project that was heavily criticized over lack of funding and business case.

The Department for Work and Pensions has launched a competition for an ERP refresh package worth an estimated £933.7 million. The 12-year contract includes both software and systems integration services as part of a "bundled procurement."

The Department for the Environment, Food and Rural Affairs (Defra), the Home Office (HO), and the Ministry of Justice (MoJ) will also make use of the procurement in what has been a stop-start refresh of the departments Oracle finance and HR systems, in a move expected to support around 250,000 employees.

Earlier this month, the Parliamentary spending watchdog said the government had yet to identify funding for the programme beyond 2024–25 and that it did not have a proper business case.

In a procurement notice published late last week, DWP said the "Synergy Programme" would "ensure the delivery of a best in class, Value for Money, shared human resources and finance service which meet the needs of service users."

The tender is designed to "procure and adopt a cloud-based service leveraging the capabilities offered by a Software-as-a-Service (SaaS) ERP platform and associated technologies" as well as a systems integration service "to enable the transition (and support business change) to the SaaS ERP platform and associated technologies."

As opposed to dividing the procurement into lots, the "bundled" approach would mean the software vendor and SI suppliers "work together in partnership from the outset to jointly propose a cohesive solution and delivery approach which meets the Authority's outcome-based requirements and demonstrate they are a compatible supplier partnership."

The departments within the procurement share an outsourcing partner in Shared Services Connected Limited (SSCL), a joint venture between French services firm Sopra Steria and the Cabinet Office. Home Office have a direct contractual relationship with Oracle, having already migrated to an instance of their Fusion SaaS (Software as a Service) platform as part of their METIS Programme.

The remainder of the departments run on the Single Operating Platform based on Oracle eBusiness Suite 12.2.6 and — since October 2020 — hosted on Oracle Cloud Infrastructure (OCI).

In 2021, the MoJ ditched a £100 million ($123 million) ERP procurement it began nearly a year earlier in a bid to get in line with the Cabinet Office's then new shared service strategy. The Cabinet Office subsequently cancelled the search for a partner it began in spring 2020 under the catchy moniker SOP2SaaS.

The Synergy Programme is part of a central-government-wide mission to update its ERP systems and save money through shared services.

Earlier this month, the Public Accounts Committee said departments do not have the funding they need to deliver the strategy.

It pointed out that HM Treasury had approved a funding of £300 million to support the five clusters — including Synergy — covering the 2021 Spending Review period to 2024–25.

"Departments have stated that this settlement may not be enough to allow them to proceed with their preferred procurement options if final costs, which they currently estimate to be between £382 million and £403 million, continue to exceed the funding envelope," the public spending watchdog said.

It added that the clusters would require £480 million of investment funding in the subsequent Spending Review period after 2024–25 to deliver the full strategy. “There is clearly a risk to the delivery of this business-critical change programme since there is no guaranteed level of funding,” the report said.

The DWP has been asked why its procurement is more than the stated funding for all departments and where it expects the funding to come from.

The PAC has also pointed out that it has not produced an overarching business case for the Shared Services Strategy, "which has hindered progress." ®

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