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UK gov't inks £9m extension with Oracle as £64m ERP overhaul looms

"Highly customised" system not getting swapped out earlier than 2023.

The UK's Shared Business Services (SBS) has agreed a £9 million Oracle ERP contract extension for a wide range of government departments including the UK Space Agency, Department for International Trade (DIT), and the Department for Business, Energy & Industrial Strategy (BEIS).

The licence extension, announced this week without competitive tender (on the grounds that swapping out two heavily customised on-premises ERP systems could take up to 30 months) will run from June 2021 to May 2023 with the possibility of a seven-month extension, SBS said.

The move comes as the shared services organisation eyes ambitious plans for an integration and cloud migration of government ERP systems, with a competitive tender for the shift to SaaS expected later this Spring.

That will see an existing on-premises Oracle suite used by BEIS, DTI, and the UK Space Agency among others -- along with the Workday ERP solution used by Innovate UK --swapped for an integrated shared SaaS system with a user base of up to 20,000. (UK SBS earlier suggested that a contract value for that migration of up to £64 million.)

The ambitious ERP migration project was first announced in early 2020 in a public information notice that detailed a vision of "transforming the existing service model, implementing a new single technology platform and realising the benefits and economies of scale that a modernised solution can deliver [including]... the efficiencies enabled by a modern system, i.e. more intuitive, automated and user friendly."

This week the UK SBS acknowledged that "changing such a highly customised BPS system any sooner [than 2023] whilst UK SBS and its clients prepare to enter a new environment would incur significantly disproportionate costs in both operation and maintenance".

It anticipates that the ERP project and "associated business transformation" is expected to take between 24-30 months to complete: "UK SBS therefore requires a renewal / extension of the current BPS & CSA license agreements required to continue to operate the Oracle platforms whilst new software products are competitively tendered and implemented."

See also: Is getting workloads of mainframes still a howling headache of a job?