Nottingham County Council's (NCC) decision to move to a shared services model will save it £5m a year.
The council is implementing an SAP ERP suite managed by Logica. The contract is worth £7.4m over five years will see Logica work with the council to implement internal shared services.
As NCC is the eleventh largest county council in the country, with a total budget of £1.3bn a year, it needs an effective system to support its services, said Tim Gregory director of corporate services at the council.
"The first reason for choosing an ERP suite was because our current systems are not integrated and are complex to manage. Also, some of our systems are reaching the end of their lives. The second was that we needed to radically transform the way we support the organisation," said Gregory.
The council has to save £170m over the next four years, 30% of the running cost budget.
In 2001, 2004 and 2007 it tried to implement a similar system, but the need for such a level of change was less pressing. "Now the appetite for change is much bigger," he said.
"We have to be more businesslike, understand the cost of services and have timely and accurate reporting."
Once the system is bedded down, the council has hopes of moving to an external shared services model, added Gregory.
"We are very keen to discuss sharing services [with other government bodies]. Inevitably that will take a while. If we can get further benefits downstream that would be very desirable for us."