Birmingham City Council has begun work on a £130m SAP project that is designed to improve its Audit Commission rating by saving £450m over the next 10 years.
Birmingham, the UK's largest local authority, plans to roll out MySAP 2006 to more than 10,000 people over 12 months from October, to help it manage procurement more effectively.
The project is the first large IT implementation following the Audit Commission's annual inspection in February, which concluded that Birmingham City Council was only meeting "minimum requirements."
The commission awarded the council two stars out of a possible four, placing Birmingham in the lower 21% of local authorities.
"We have got to fundamentally change processes across the organisation. We have traditionally been quite a silo-based organisation and we are moving to a more corporate approach," said Birmingham City Council director Glyn Evans.
Council managers and finance staff will use the SAP system to manage programmes, projects and procurement, and to monitor their budgets.
Evans expects that the project will save the council £450m over the next 10 years, with the full annual benefit coming in the third year. The savings will come from better procurement and a reduction in head count. The council expects to realise a further £350m in benefits over the coming decade.
A 100-strong team of IT professionals is implementing the system. They are split equally between permanent council employees and people on secondment from a joint venture company that Birmingham set up with Capita last April. The joint venture, Service Birmingham, has a 10-year contract worth £470m to run the council's IT function.
Birmingham is also evaluating the business case for MySAP CRM.
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