Agenda item

(To receive a report from Andrew Mclean, Interim Assistant Director – Corporate, which invites the Board to consider a report on the Business World ERP System Re-design, which is due to be considered by the Executive on the 17 December 2019. The views of the Board will be reported to the Executive as part of its consideration of this item)

The Board gave consideration to a report from Andrew McLean, Interim Assistant Director – Transformation, which invited consideration on the re-design of the Council's Business World ERP system, which was being presented to the Executive on 17 December 2019 for a decision.

Detailed at Appendix A was a copy of the Executive report and associated Appendix for the Board to consider. 

The Board was advised that the report proposed an estimated investment of c£1.8m in order to re-design the Council's Business World Enterprise Resource Planning (ERP) system.  It was noted that the existing system was creating a number of significant issues to the effective performance of the system, which was impacting on the efficiency and effectiveness of the departments of the Council and maintained schools which used the system.

It was noted further that the intention was to move to the existing Hoople Ltd., Business World Platform.  It was reported that as part of the move, it was proposed that the Council took up part ownership of Hoople so that Hoople became a "Teckal" company of the Council; and then the Council would award a direct contract for the services to Hoople, utilising the appropriate procurement exception.

Details of the alternatives considered and more detailed reasons for the recommendations were shown on pages 44 and 45 of the report.  It was reported that, in the absence of relevant in-house expertise to carry out the work itself effectively, the Council would as a result have to employ a third party to support the re-design and provide strong contract management through individuals with relevant system expertise and experience.  It was reported further that the Business World System was proven elsewhere in many other organisations and that the issues the Council currently faced with the system were resolvable.

In conclusion, the Board was advised that not addressing the capability issue would result in the Council failing to reap the full benefits of its investment in an ERP system; that maintaining the system as it was currently configured would create significant reputational risk for the Council through the failure to be able to implement system updates; that the current system was not sustainable in its current state; and that a re-design would remove duplicated and inefficient processes.  Reassurance was given that Hoople had provided sufficient information and had demonstrated experience to provide the Council with a robust and stable platform, upon which the system could be optimised to provide an enhanced offer.

During discussion, comments confirmed by the Board were as follows:-

·         Capacity of Hoople – The Board was advised that Hoople had identified additional resources to ensure that it had capacity to take on the Council's system re-design and the on-going provision of services to the Council;

·         Assurance – It was noted that assurance on the Hoople platform and the proposed move over to the platform had been provided by independent consultants;

·         Provision for schools – It was reported that a dedicated gateway for Lincolnshire schools would look to be developed once the system re-design and move over to the Hoople platform had been completed for April 2021;

·         Costs - It was confirmed that the future recurrent costs would show a saving of around £200,000 per annum, including reduced costs from third party providers as Hoople would provide these services in future instead.  It was confirmed further that additional system development costs would only be incurred if Lincolnshire wanted to implement something different to the standard build.  In relation to TUPE, costs would be on a one off basis and these were already starting to be managed through staff turnover and vacancies;

·         Concerns were expressed regarding bringing in the Hoople platform - Confirmation was provided that the system was stable elsewhere and worked for multiple clients so there was no reason why it should not work for Lincolnshire.  Lincolnshire would need to ensure it embraced changes to the way it needed to operate in order to get the best out of the system;

·         Security – The Board was advised that due diligence was being undertaken to ensure that the platform would be secure and that security would be up to date.  It was confirmed that if any issues arose, there would be the option to stall implementation, and if required, return to the old system. It was proposed to embed an 18 month notice period for both sides in case there were any issues;

·         Penalties – Officers advised that financial penalties would not be part of the agreement as there was a different approach with Hoople. Governance arrangements would be monitored to ensure that the agreement was being delivered;

·         Culture change – The Board noted that a change in culture and mind-set was required in how staff use the current system and the new platform would be designed to prevent staff from using workarounds. The Board highlighted that the consequence of workarounds being used from the beginning was that the costs of the new contract were higher.  It was confirmed that there would be more corporate oversight in future and the default position would be to not customise systems for staff;

·         The Board noted that there were limited options for a HR and finance system, but as the finance side of the system was operating well, Hoople was seen to be the best option as it also used the current system; and

·         Contract options - The Board was advised the same options would still be available when the contract ended in 2026, but there might be alternative systems offered in the market place that the Council could look into.

RESOLVED

1.    That the Overview and Scrutiny Management Board supported the recommendations as presented in the Executive report.

2.    That the comments as detailed above be passed to the Executive in relation to this item.

3.    That the proposed dates on page 42 of the report for further reports to the Overview and Scrutiny Management Board to monitor the progress of the re-design be agreed.