We have been trying to work out the implications of the Foreign & Commonwealth Office (FCO) issuing a pre-tender notice for the provision of Oracle ERP systems including business intelligence (BI) and enterprise data warehouse services. The deal would also include the provision of associated services i.e. hosting, integration, service desk and management services. The notice states that the framework procurement is in support of the Cabinet Office Shared Services strategy and will be open to all central government departments, arms length bodies and agencies. It will replace the current PRISM contract with Capgemini.
The inference is that those departments currently on Oracle or wishing to migrate to Oracle, and which do not want to migrate to ISCC1 (the DfT Independent Shared Service Centre), would use the framework. We understand that it will soon be announced that ISCC1 will be outsourced to Arvato (Arvato and HP were the final contenders) and that Arvato will work with ‘Tier 2’ ERP provider Unit4 (for its Aggreso solution). But what about ISSC2 (which is centred on DWP and DfE)? We understand that ISSC2 will be Oracle-based. But, with the pre-tender notice giving an estimated contract value of £250m-£750m, it looks like a fair few departments will choose not to migrate. Of course, the intention has always been that there will be some ‘standalone’ departments, namely MoD, HMRC and MoJ. Two out of three of those departments are ‘run on’ Oracle. At the MoJ, Steria has implemented an Oracle solution for the department’s shared services centre, and at MoD Capgemini’s P2P solution is Oracle-based. We believe, though, that HMRC has recently rationalised its installations of SAP onto a common platform.
This framework appears to support departments continuing to run Oracle or, indeed, choosing to move to Oracle. This is surprising as when the Shared Services strategy was published in December, the Cabinet Office continued to highlight the cost of running Oracle ERP. It estimated that moving to a single Oracle solution for the whole of Whitehall would save 40% on the current average cost per employee of £160 for a multiple installation set up. However, it also estimated that moving to a Tier 2, “low cost” ERP solution could bring the cost down to £52 a head, a saving of 67%. The document went on to say “this level of saving does not include the savings which would be expected from a competitive procurement or the possibility of hosting ERP in the Cloud”. With Unit4 apparently breaking into central government, there appears to be an alternative Tier 2 solution on the table. This framework, though, gives the message that the Cabinet Office has had to accept that some departments and agencies are wedded to the Tier 1 solutions. And if they are not going to move away from Oracle or SAP, the best the Cabinet Office can do is ensure they are getting the best deal. There's no doubt there will be plenty of SIs looking to protect their existing relationships by getting a place on the FCO framework.