The decision by councils in Northumberland and Durham to share a
single installation of Oracle E-Business Suite (Computer Weekly,
10 October) points the way to how the government's shared services
vision could work in practice for many local authorities.
Central government has been seeking to duplicate in the public
sector the efficiencies created in parts of the private sector
through shared back-office functions.
Next month, the Cabinet Office will increase the pressure on all
parts of the public sector when it publishes its proposals for
sharing services. Nine sector plans will set targets for the number
of public sector shared services centres to be created within three
to seven years.
Separate plans will be published for education, health, the
criminal justice system, local government, the Department for Work
and Pensions, defence, HM Revenue & Customs, departments with
multiple agencies and other central government bodies.
Under the arrangement between Northumberland and Durham county
councils, Durham's finance and procurement functions will be hosted
on Northumberland's systems. The plan is that Northumberland's
Oracle E-Business Suite will replace Durham's Geac Smartstream
finance application by 2008.
Durham needed to update its Geac system to realise cost savings
of £900,000 by transforming its finance and procurement functions.
Using Northumberland's system will be far cheaper than implementing
a new system of its own.
Northumberland benefits by sharing the cost of maintaining the
Oracle E-Business Suite software that it implemented two years
ago.
The project is a clear example of the kind of approach being
supported by government CIO John Suffolk.
Speaking at the Society of IT Management's annual conference
earlier this month, Suffolk signalled a change in government
thinking about shared services. "I would not say there is one model
for all councils in all situations that says big is beautiful. We
do have to be careful, and I do not think shared services means
robotic, identical services for everyone."
In this light, the Northumberland deal can be seen as offering
an alternative to the approach taken by several large councils,
which have signed major deals with systems integrators over the
past few years.
Birmingham, Liverpool and Suffolk have contracts to transform
their IT systems lasting five or more years and costing tens of
millions of pounds. These councils and their private sector
partners are creating shared services centres that could also be
used to supply back-office services to smaller local
authorities.
By contrast, Durham and Northumberland's partnership is enabling
them to share more complex, embedded systems than councils that
have partnered with systems integrators.
As well as finance and procurement functions, the North East
councils will benefit from a reciprocal mirroring of their
datacentres to provide business continuity. Further down the line,
Northumberland is also planning to link up with the shared customer
relationship management application that Durham is using under a
shared services agreement with the eight district councils in the
county.
Both sides said the shared services project appealed from the
outset because the councils had already built some connectivity
between their networks.
Durham provides Derwentside District Council's IT services under
an earlier shared services deal. As part of that deal, Durham
County Council extended its network as far as Northumberland.
As part of the project, Durham County Council will move its
systems on to a new datacentre. The migration is expected to be
completed between January and March next year. Once the datacentre
is operational, a joint project team of Durham and Northumberland
IT staff will make it a live back-up for Northumberland's
systems.
At the same time, a second joint project team will set up
Northumberland's datacentre in Morpeth as the live back-up for
Durham's systems, thereby completing the circle and giving both
councils comparatively low-cost business continuity systems.
Derwentside District Council will also benefit from free business
continuity systems.
The main shared application, Oracle's E-Business Suite, has
already delivered cost savings of £1m a year for Northumberland,
where it has been live since 2004.
Northumberland is rolling out a range of Oracle modules in the
run up to its shared business continuity systems going live. These
include training administration, property management and enterprise
asset management.
During the remainder of 2007, it plans to deploy a time
management module, a balanced scorecard and an enterprise
recruitment module - functions that will not be available to Durham
initially but which potentially it could take advantage of in the
future.
The final piece in the jigsaw will be Northumberland
implementing the same instance of Oracle CRM that is being used by
Durham and its district councils. No definite timeframe has been
set but Northumberland expects to be using the system within the
next few years.
www.cio.gov.uk/shared_services
www.cabinetoffice.gov.uk/e-government