NHS sets out case for shared services

The NHS has completed the outline business case for an ambitious project to introduce a single, Web-enabled finance and...

The NHS has completed the outline business case for an ambitious project to introduce a single, Web-enabled finance and e-procurement system, which the health service believes could save it £300m a year.

Following government approval of the outline business case, an advertisement will be put into the Official Journal of the European Commission in late September. Responses will be required by January 2002, with the aim of awarding the contract by December 2002.

Sources close to the project say it is likely to be a candidate for a public-private partnership.

Health secretary Alan Milburn last month identified IT as one of four key areas in which the NHS will further develop partnerships with the private sector.

The project, worth about £300m over 10 years, forms the second part of the NHS shared services initiative - the first was HR and payroll. The initiative aims to provide key support services for all NHS agencies from 10 to 25 centres.

Though being run as separate projects, the two shared services initiatives will eventually converge. The shared model may also be extended to cover clinical data and applications.

"We're getting a lot of expressions of interest from software and hardware firms, with consortia beginning to shape up," said Eric Jackson, director of e-commerce at the NHS Purchasing and Supply Agency.

One frontrunner is likely to be a consortium led by Oracle and McKessonHBOC, which in June was named as preferred supplier for the NHS HR and payroll project. The consortium won a contract worth £13.5m in December 2000 to provide all financial applications to 12 Welsh NHS trusts on a shared services basis.

Other potential bidders are understood to include SAP, KPMG and JD Edwards.
The finance service will be piloted at two sites. National implementation will begin in 2003, with completion scheduled for 2006.

Trusts have been instructed not to procure finance systems ahead of the shared services project. "Those that want to update systems will feel hamstrung," said Keith Lilley, from Leeds University Hospitals, commenting on the e-procurement element of the project.

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