The health service plans to spend between £100m and £200m on a human resources database to manage the pay, staff records and training of one million NHS employees.
The project, one of the largest IT investments made by the NHS, will create the first central human resources and payroll database for the health service.
Dubbed the Shared Services Initiative, the project aims to replace the plethora of incompatible human resources and pay roll systems used across 500 organisations in the service with a single Web-accessible database.
The NHS believes the system will more than pay for itself by improving the accuracy of staff records, and eliminating the need to retype records when staff transfer from one NHS organisation to another.
"The benefits will outweigh the costs by a significant margin," said Wayne Lloyd, HR consultant for the project. "We have one million employees, and a large proportion of those are highly skilled, yet we have very poor HR information."
A typical trust might end up entering staff records up to six times every time an employee moves. With 220,000 employees changing jobs every year, this adds up to a lot of duplicated effort, said Lloyd.
The project will provide the NHS with an IT platform that will support future technical developments such as the introduction of smartcards to verify the identity of medical staff and to control access in hospitals.
It aims to give managers accurate, up-to-date statistics on workers that will allow staff to be deployed where they are most needed and provide data to work out national pay awards.
The system will also keep records of employees' qualifications and the training they have received, allowing the NHS to keep tabs of the skills available in the service.
The NHS is evaluating bids from three shortlisted suppliers and expects to award a final contract for the system in December. Roll out will begin in April 2002.
The biggest challenge, said Lloyd, is not the technology, but managing the culture change that the new system will bring. "A single system requires common processes. Across 500 organisations that poses a significant challenge," he said.