SAP deal paves way for savings

Pay-per-user contracts such as Oxfordshire County Council's £18m SAP deal with ITNet could pave the way for cost-effective...

Pay-per-user contracts such as Oxfordshire County Council's £18m SAP deal with ITNet could pave the way for cost-effective transaction-based deals in local government, said outsourcing expert Robert Morgan.

Morgan, the chief executive of sourcing consultancy Morgan Chambers, explained, "This is a positive step forward. Some time through the life of the contract I would expect them to move from a cost-per-user basis to a cost-per-transaction basis."

Pay-per-user deals can easily change into transaction-based agreements, said Morgan. "Users will benefit from increased scalability with a move to transaction-based contracts."

A council spokeswoman could not confirm whether the council planned to move to a transaction-based contract.

The 11-year Oxfordshire deal has been described as the largest SAP managed application service contract in UK local government. Initially 1,428 users will use the facility, which is based on ITNet's Business Direct managed application service.

The IT services specialist will phase in SAP financials, HR, payroll, e-procurement and business intelligence over the next two years. The fully managed service is due to go live in September 2002.

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