The council has been able to reduce its IT support costs and free up financial and human resources staff from data entry tasks, a report by Insead Business School has revealed.
The replacement of old back-office systems is a challenge facing organisations in both the public and private sectors.
Cambridgeshire Council, which signed a £10m, eight-year outsourcing deal with Fujitsu in 2002, has worked with the supplier to replace IBM legacy systems used to manage council assets, property, invoices, payroll and HR functions with Oracle's E-Business suite running on Sun Unix servers.
Mike Parsons, the council's resources director, said, "The cost of running our previous system was mounting. We had a number of standalone systems running on an IBM mainframe. We had an old and inflexible platform running old systems that needed heavy maintenance."
As part of the upgrade, the council changed the way it managed finances internally, moving from a decentralised paper-based ordering and invoicing system to a web-based system, which lets managers order from a list of approved suppliers.
The system keeps track of departmental budgets, providing managers with accurate accounts which factor in the cost of orders that have been placed but have yet to be paid. It has allowed the council to meet government targets of paying all invoices within 30 days and provides managers with up-to-the-minute financial reports, said Parsons.
The system has also freed up staff time by eliminating the need for re-keying of data between different databases.
HR staff have been able to use data collected by the system to run a targeted information campaign which has reduced absenteeism among council workers.
Cambridgeshire Council now plans to make further savings by automating its paper-based expenses system.