The HR and payroll contract for the NHS is one more step towards
centralised IT.
The £300m update of the health service's HR and payroll systems
announced last week was welcomed by most healthcare professionals.
The NHS uses more than 30 different systems, some up to 25 years
old, to manage its 1.2 million staff in England and Wales.
Oracle HRMS - the first centralised system in the history of the
NHS - also represents a daunting IT challenge for the government.
The scheme is already three months behind schedule and NHS IT
managers have expressed concerns about loss of local control. The
NHS Confederation has raised the stakes by describing typical
large, centralised IT projects as being "unresponsive and
inflexible".
The need for a new HR system is not in doubt. Philip Hewitson,
chief executive of NHS Shared Services, which is overseeing the
project, said, "The majority of staff are being paid on systems
that are more than 25 years old." The Standard Payroll System was
developed in the 1970s.
Another problem is the disparate nature of the systems, many of
which are proprietary. A spokesperson for NHS Shared Services said,
"NHS organisations will pay for the system as they pay for the
systems that they use now," although details are still being
finalised. She added that mechanisms for dealing with old contracts
had already been discussed with existing suppliers.
Hewitson believes that the new system will streamline the
administration of HR and payroll processing. It should also reduce
duplication of employee records as details will no longer have to
be entered on separate payroll and HR systems. Duplication is a
major problem, since the NHS recruits 275,000 staff a year in
England and Wales, about 200,000 of whom are moving within the
service.
The NHS also hopes the system will produce substantial cost savings
but has refused to suggest a target figure. The bottom line,
however, is the fact that the new system is geared towards
improving efficiency.
In the long term additional modules, such as staff rostering, will
be added to the HR system. More ambitiously, there are plans to
introduce electronic self-service and remote access for NHS
staff.
The Department of Health recently announced that a consortium,
headed by McKesson HBOC, including PricewaterhouseCoopers, Oracle,
and IBM, will begin testing the system in September, when the
contract is due to be signed.
Although the Government remains tight-lipped about the
responsibilities of each supplier, industry insiders suggest that
IBM will provide the hardware with Oracle taking care of the
project's software. PricewaterhouseCoopers is expected to fulfil a
consultancy role, while the whole project will be managed by
McKesson HBOC, which claims to be the world's largest healthcare IT
supplier.
This is an impressive array of companies, but will the new system
actually work?
Officials at the Shared Services Executive insist that this scheme
will not end up in the elephants' graveyard of IT projects.
Hewitson said the NHS is getting a top-class system that is already
tried and tested around the world. It will be tailored to the needs
of the NHS, but the amount of tailoring needed is minimal,
something which should help make the system a success, he
said.
That is all well and good, but the project is already running
behind schedule. Implementation is scheduled for April 2002 and the
Government hopes to have the new HR and payroll system in place by
mid-2004. These are bold deadlines, especially considering that
three-month delay earlier this year.
Hewitson said the Shared Services Executive was advised in February
that it could be unsafe to select a preferred bidder at that time
because it had not sufficiently tied down the contractual terms,
and there were still outstanding concerns about some of the
project's risk transfer, such as contractual responsibilities. But
he insisted that the delay would not affect the implementation of
the HR system.
The other major challenge is the sheer complexity of the project.
The NHS employs a vast number of people working in diverse
environments.
In many quarters it is felt that that the success of the project
lies in the NHS' ability to enforce standard business processes
across the organisation, without taking autonomy from local
managers. But this will be a difficult balancing act. Some NHS
professionals have already expressed concern that the new system
will take control away from local staff.
A Unison spokesman said, "Our members in payroll services have
identified concerns about whether there will continue to be a local
payroll advice function."
These sentiments are echoed by the NHS Confederation, which
represents NHS managers. "Concerns about loss of control are
perceived as justified because of unhappy experiences with large,
centralised IT projects being expensive, unresponsive and
inflexible," a spokesman said.
The Shared Services Executive said the system will be managed
locally. But if NHS professionals decide that it is too centralised
and unwieldy their dissatisfaction will be a thorn in the project's
side. NHS staff are often wary of centralised IT projects, as shown
earlier this year when doctors attacked plans for a £70m national
booking system.
Nevertheless the £300m investment over 10 years makes it one of the
largest projects of its type, with the potential to revolutionise
how the NHS operates.
Plan of action for NHS HR
1. October 1999: Shared Services Initiative launched
2. June 2001: consortium headed by McKesson HBOC including
Oracle, PricewaterhouseCoopers and IBM named as preferred suppliers
to test Oracle HRMS system.
3. September 2001: 10-year contract for new system is due to
be signed and testing will begin
4. April 2002: implementation scheduled to begin
5. Mid-2004: government hopes to have integrated system in
place.
Shared services
The introduction of Oracle HRMS is part
of the Shared Services Initiative that was launched in October 1999
and is managed and co-ordinated by the Shared Services Task Force.
At the core of the initiative is the idea that new technologies
offer the opportunity to make better use of scarce skills and
provide information and services more efficiently.
It also hopes to bring down the cost of administration in the NHS
so that more of the health service's resources can be devoted to
direct patient care.
Big spenders
The NHS has something of a chequered past
when it comes to IT projects.
The Hospital Information Support Systems Initiative, for example,
lost up to £103m in the early 1990s, prompting criticism from the
Commons Public Accounts Committee.
This was followed by other expensive IT disasters such as the
failure of a £32m Read Codes version 3 project in the
mid-1990s.
In 2001 doctors attacked plans for a £70m national patient booking
scheme as "unrealistic".
In 1992 Wessex Regional Health Authority's Regional Information
Systems Plan lost up to £63m after the region and the NHS Executive
sought to impose systems without user buy-in.
An extra £851m was announced in January 2001 for "Building the
Core" - the project to get baseline IT services to all and NHSNet
connection to NHS trusts by 2003.
The technology challenge
As the new NHS system is
rolled out, data will be migrated, providing a single view across
the whole NHS.
Oracle HRMS, part of Oracle's e-business suite, is an integrated HR
and payroll solution and the NHS system will be implemented on a
Unix platform.
According to NHS executives, HRMS implementation will reduce
operating costs, give accurate information and streamline business
processes.
The volume of data that will be stored is expected to be in
terabytes.
This will depend on how much history the NHS decides to hold for
each employee, the volumes of data to be input for payroll
calculations, and the nature and volume of the HR information to be
stored.
James Rogers
james.rogers@rbi.co.uk