Sopra Steria bags £115 million legacy extension from UK pensions department after delays to replacement ERP project
(2025/08/08)
- Reference: 1754647695
- News link: https://www.theregister.co.uk/2025/08/08/sopra_steria_gets_115_million/
- Source link:
The UK's pensions and social security department has modified a 12-year-old contract with Sopra Steria, tacking on more than £100 million to allow it to run legacy systems for another three years.
This comes after a delay to a replacement ERP and HR software project across four major UK central government departments that is set to cost around £2.5 billion (c $3.3 billion) in total.
Without competition, the French outsourcing provider was recently awarded an additional £115 million ($154 million) — more than a third of the contract's original value — to run the Single Operation Platform (SOP) relied on by the Department of Work and Pensions, the Ministry of Justice, the Cabinet Office, and the Department for Environment and Rural Affairs.
[1]
The extension to the contract — first signed in 2013 — was necessary because of the challenges in the programme to replace the current Oracle eBusiness Suite 12.2.6 with a more modern SaaS system.
[2]
[3]
Nearly all departments in central government are currently involved with the shared service program, which organizes them into "clusters" associated with ERP and HR software suppliers and service partners. The departments reliant on the SOP are all set to move to Oracle Fusion as part of the so-called Synergy program.
A recent procurement [4]notice revealed the need to modify the contract with Shared Services Connected Limited (SSCL), a Sopra Steria company.
[5]
"The complexity of implementation of the Synergy cluster arrangements, including the phased exit from the incumbent solution provided by SSCL to align to the cluster and split technology and business service approach… means that new shared services will not be procured and associated systems and solutions will not be fully implemented," before the DWP contract with SSCL ends on 31 October 2025, it said.
It explained that the current system services are "dependent on a bespoke operating platform which incorporates proprietary material and interfaces with numerous other systems within the respective Synergy Cluster members' IT environments." Finding an alternative, interim supplier would "result in significant duplicative and nugatory cost," the notice said.
The SOP was migrated from an on-prem data centre to a hosted platform — provided by Oracle Cloud Infrastructure (OCI) — in October 2020. The Home Office is also part of the Synergy programme, but [6]it moved off SOP to Oracle Fusion in 2021 through its direct relationship with Oracle.
[7]
SSCL was contracted to run the SOP under a Call Off Order Form (COOF) from a framework agreement called Independent Shared Service Centre Two. The agreement had already been extended twice under the original terms. It was due to expire in 31 October 2025 "which means business critical services including the capacity to make payments to employees and suppliers would cease… unless continued provision could be secured."
The modification extended the deal until 31 October 2028. The Register has asked the DWP when the Synergy team became aware that the agreement would need to be modified to accommodate the new cluster arrangements and procurement timeline.
In March 2024, the Infrastructure and Projects Authority — a now-defunct government projects watchdog — said the full business case for the Synergy program was "on track for HM Treasury approval by July 2024 with Systems Integrator and ERP [software] procurement on track for contract award" once approval was in place. It also set the whole-life costs of the project at £2.49 billion ($3.3 billion).
In September 2024, [8]IBM and Oracle won a contract worth £711 million ($955 million) to provide Synergy with software and systems integration services. However, the deal for [9]business process services — set to be worth £958.7 million ($1.28 billion) — is yet to be awarded, after the competition was launched in the same month.
In May this year, senior accounting officer for the Synergy project, Peter Schofield, said: "The complexity in delivering business transformation across multiple departments to challenging timescales has caused early delays to the Programme. A critical milestone will be the agreement of a fully costed and deliverable integrated plan in summer 2025 incorporating the release dates for departments to move over to Synergy services following work to rephase and replan."
The Register has asked the DWP what caused the delay and whether the "deliverable integrated plan" is ready.
[10]Troubled French outsourcer Atos finds pot of gold at the end of UK state bank Rainbow
[11]Already three years late, NHS finance system replacement delayed again
[12]London's Met Police seeks business services, ERP refresh in £370M deal
[13]NHS drops another billion on tech in the hope of finally going digital
Schofield also noted that the Synergy program's "value for money position is sensitive to delays, which lead to cost increases due to longer running of the Programme and reduced benefits as they are delayed within the business case period."
He promised the next iteration of the business case would see cost forecasts updated "to reflect the Business Process Services procurement outcome."
Even without delays, it may have been necessary to extend the Sopra Steria support agrrement, such is the size of the replacement ERP and HR project, which is set to support 280,000 employees. The project was unlikely to have a new system up and running by 31 October 2025.
Nonetheless, some of the participating departments might be irked by the modification. In 2021, the [14]Ministry of Justice cancelled its £100 million ($134 million) ERP procurement to get in step with the new shared service strategy. Four years later, it might have hoped to be on a new system by now. As things stand, it remains beyond the horizon. ®
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[4] https://www.find-tender.service.gov.uk/Notice/043018-2025
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aJYfF1KwEP6FaQtMSQTHFgAAAI4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2021/03/24/oracle_home_office_fusion/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aJYfF1KwEP6FaQtMSQTHFgAAAI4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2024/09/27/ibm_and_oracle_uk_contract/
[9] https://www.theregister.com/2024/09/18/dwp_business_processes_procurement/
[10] https://www.theregister.com/2025/03/07/troubled_french_outsourcer_atos_finds/
[11] https://www.theregister.com/2025/02/11/nhs_finance_system_delayed/
[12] https://www.theregister.com/2024/12/17/met_police_seeks_business_services/
[13] https://www.theregister.com/2024/09/23/nhs_tech_procurement/
[14] https://www.theregister.com/2021/03/29/moj_cancels_100m_erp_procurement/
[15] https://whitepapers.theregister.com/
This comes after a delay to a replacement ERP and HR software project across four major UK central government departments that is set to cost around £2.5 billion (c $3.3 billion) in total.
Without competition, the French outsourcing provider was recently awarded an additional £115 million ($154 million) — more than a third of the contract's original value — to run the Single Operation Platform (SOP) relied on by the Department of Work and Pensions, the Ministry of Justice, the Cabinet Office, and the Department for Environment and Rural Affairs.
[1]
The extension to the contract — first signed in 2013 — was necessary because of the challenges in the programme to replace the current Oracle eBusiness Suite 12.2.6 with a more modern SaaS system.
[2]
[3]
Nearly all departments in central government are currently involved with the shared service program, which organizes them into "clusters" associated with ERP and HR software suppliers and service partners. The departments reliant on the SOP are all set to move to Oracle Fusion as part of the so-called Synergy program.
A recent procurement [4]notice revealed the need to modify the contract with Shared Services Connected Limited (SSCL), a Sopra Steria company.
[5]
"The complexity of implementation of the Synergy cluster arrangements, including the phased exit from the incumbent solution provided by SSCL to align to the cluster and split technology and business service approach… means that new shared services will not be procured and associated systems and solutions will not be fully implemented," before the DWP contract with SSCL ends on 31 October 2025, it said.
It explained that the current system services are "dependent on a bespoke operating platform which incorporates proprietary material and interfaces with numerous other systems within the respective Synergy Cluster members' IT environments." Finding an alternative, interim supplier would "result in significant duplicative and nugatory cost," the notice said.
The SOP was migrated from an on-prem data centre to a hosted platform — provided by Oracle Cloud Infrastructure (OCI) — in October 2020. The Home Office is also part of the Synergy programme, but [6]it moved off SOP to Oracle Fusion in 2021 through its direct relationship with Oracle.
[7]
SSCL was contracted to run the SOP under a Call Off Order Form (COOF) from a framework agreement called Independent Shared Service Centre Two. The agreement had already been extended twice under the original terms. It was due to expire in 31 October 2025 "which means business critical services including the capacity to make payments to employees and suppliers would cease… unless continued provision could be secured."
The modification extended the deal until 31 October 2028. The Register has asked the DWP when the Synergy team became aware that the agreement would need to be modified to accommodate the new cluster arrangements and procurement timeline.
In March 2024, the Infrastructure and Projects Authority — a now-defunct government projects watchdog — said the full business case for the Synergy program was "on track for HM Treasury approval by July 2024 with Systems Integrator and ERP [software] procurement on track for contract award" once approval was in place. It also set the whole-life costs of the project at £2.49 billion ($3.3 billion).
In September 2024, [8]IBM and Oracle won a contract worth £711 million ($955 million) to provide Synergy with software and systems integration services. However, the deal for [9]business process services — set to be worth £958.7 million ($1.28 billion) — is yet to be awarded, after the competition was launched in the same month.
In May this year, senior accounting officer for the Synergy project, Peter Schofield, said: "The complexity in delivering business transformation across multiple departments to challenging timescales has caused early delays to the Programme. A critical milestone will be the agreement of a fully costed and deliverable integrated plan in summer 2025 incorporating the release dates for departments to move over to Synergy services following work to rephase and replan."
The Register has asked the DWP what caused the delay and whether the "deliverable integrated plan" is ready.
[10]Troubled French outsourcer Atos finds pot of gold at the end of UK state bank Rainbow
[11]Already three years late, NHS finance system replacement delayed again
[12]London's Met Police seeks business services, ERP refresh in £370M deal
[13]NHS drops another billion on tech in the hope of finally going digital
Schofield also noted that the Synergy program's "value for money position is sensitive to delays, which lead to cost increases due to longer running of the Programme and reduced benefits as they are delayed within the business case period."
He promised the next iteration of the business case would see cost forecasts updated "to reflect the Business Process Services procurement outcome."
Even without delays, it may have been necessary to extend the Sopra Steria support agrrement, such is the size of the replacement ERP and HR project, which is set to support 280,000 employees. The project was unlikely to have a new system up and running by 31 October 2025.
Nonetheless, some of the participating departments might be irked by the modification. In 2021, the [14]Ministry of Justice cancelled its £100 million ($134 million) ERP procurement to get in step with the new shared service strategy. Four years later, it might have hoped to be on a new system by now. As things stand, it remains beyond the horizon. ®
Get our [15]Tech Resources
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[4] https://www.find-tender.service.gov.uk/Notice/043018-2025
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[6] https://www.theregister.com/2021/03/24/oracle_home_office_fusion/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aJYfF1KwEP6FaQtMSQTHFgAAAI4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2024/09/27/ibm_and_oracle_uk_contract/
[9] https://www.theregister.com/2024/09/18/dwp_business_processes_procurement/
[10] https://www.theregister.com/2025/03/07/troubled_french_outsourcer_atos_finds/
[11] https://www.theregister.com/2025/02/11/nhs_finance_system_delayed/
[12] https://www.theregister.com/2024/12/17/met_police_seeks_business_services/
[13] https://www.theregister.com/2024/09/23/nhs_tech_procurement/
[14] https://www.theregister.com/2021/03/29/moj_cancels_100m_erp_procurement/
[15] https://whitepapers.theregister.com/