East Sussex County Council dodges SAP S/4HANA upgrade bullet, sets aside £25m for a 10-year SaaS ERP deal
(2020/08/27)
- Reference: 1598530387
- News link: https://www.theregister.co.uk/2020/08/27/east_sussex_county_council_25m_saas_erp_deal/
- Source link:
A council on the south coast of England has decided to climb off the SAP upgrade treadmill and instead seek out a cloudy ERP system.
A user of SAP R/3 since at least 2005, East Sussex County Council has been weighing up its options for an upgrade.
A [1]tender document published this week confirmed the council's intention to opt for a software-as-a-service alternative in a management deal that could be worth £25m over 10 years.
The notice calls for an ERP that could be a "fully integrated system or a fully integrated combination of best of breed ERP systems". This will include "modules for finance, procurement, HR and payroll, which are currently supplied by SAP".
The council wants one throat to choke: a single lead supplier or implementation partner to take responsibility for the whole show, but it will contract the software vendor separately to pay SaaS subscriptions.
In deepest darkest Surrey, an on-prem SAP system running 17-year-old software is about to die.... [2]READ MORE
An [3]audit committee report [PDF] published by the council last year underlines the importance of the incumbent R/3 system, which is currently supported by Orbis Information Technology and Digital (IT&D) teams based in Kingston and Lewes.
"SAP is a mission critical system at the Council and there are risks that inaccuracy or lack of availability of SAP would prevent receipt and disbursement of cash, as well as producing inaccurate management information. There are in excess of 900 active users of the system," the report revealed.
Further details of the council's dilemma over the future of its ERP system were detailed in a June [4]Cabinet Office report [PDF] from the chief operating officer.
The COO said the council must move off R/3 as it will "no longer be supported by the supplier beyond 2025 and the existing server hardware is now beginning to show its age with more performance issues arising".
But the option of moving straight to SAP's preferred upgrade path based on its S/4HANA in memory system is also tough to swallow. The cabinet report stated that migrating to SAP S/4HANA "would not provide suitable value for money due to a lack of market testing and open procurement nor give the market an opportunity to demonstrate that ESCC requirements will be appropriately met".
SAP may be still in the running with its SaaS line, but will have to compete against a wider market. The council has done soft market testing with the German vendor, Oracle, Unit4, Workday, Microsoft, and a couple of smaller suppliers.
"SaaS is the focus for innovation and investment for major system providers and is specifically designed to meet the needs of an agile and mobile workforce, enhancing self-service business processes and significantly improving the use of management information," the report said.
The fairytale picture perhaps ignores the fact that ERP is hosted. East Sussex County Council will still need to align their processes to the software – facing battles with important stakeholders – and wait while the chosen vendor gets around to fixing any ongoing glitches.
The council plans to sign its new ERP contract in December, just in time to make one vendor's Christmas that little bit happier. ®
Get our [5]Tech Resources
[1] https://ted.europa.eu/udl?uri=TED:NOTICE:401579-2020:TEXT:EN:HTML&src=0
[2] https://www.theregister.com/2020/01/27/sap_system_surrey_england/
[3] https://democracy.eastsussex.gov.uk/documents/g4035/Public%20reports%20pack%2025th-Mar-2019%2010.00%20Audit%20Committee.pdf?T=10
[4] https://democracy.eastsussex.gov.uk/documents/s30788/Item%207%20-%20Modernising%20Back%20Office%20Systems.pdf
[5] https://whitepapers.theregister.com/
A user of SAP R/3 since at least 2005, East Sussex County Council has been weighing up its options for an upgrade.
A [1]tender document published this week confirmed the council's intention to opt for a software-as-a-service alternative in a management deal that could be worth £25m over 10 years.
The notice calls for an ERP that could be a "fully integrated system or a fully integrated combination of best of breed ERP systems". This will include "modules for finance, procurement, HR and payroll, which are currently supplied by SAP".
The council wants one throat to choke: a single lead supplier or implementation partner to take responsibility for the whole show, but it will contract the software vendor separately to pay SaaS subscriptions.
In deepest darkest Surrey, an on-prem SAP system running 17-year-old software is about to die.... [2]READ MORE
An [3]audit committee report [PDF] published by the council last year underlines the importance of the incumbent R/3 system, which is currently supported by Orbis Information Technology and Digital (IT&D) teams based in Kingston and Lewes.
"SAP is a mission critical system at the Council and there are risks that inaccuracy or lack of availability of SAP would prevent receipt and disbursement of cash, as well as producing inaccurate management information. There are in excess of 900 active users of the system," the report revealed.
Further details of the council's dilemma over the future of its ERP system were detailed in a June [4]Cabinet Office report [PDF] from the chief operating officer.
The COO said the council must move off R/3 as it will "no longer be supported by the supplier beyond 2025 and the existing server hardware is now beginning to show its age with more performance issues arising".
But the option of moving straight to SAP's preferred upgrade path based on its S/4HANA in memory system is also tough to swallow. The cabinet report stated that migrating to SAP S/4HANA "would not provide suitable value for money due to a lack of market testing and open procurement nor give the market an opportunity to demonstrate that ESCC requirements will be appropriately met".
SAP may be still in the running with its SaaS line, but will have to compete against a wider market. The council has done soft market testing with the German vendor, Oracle, Unit4, Workday, Microsoft, and a couple of smaller suppliers.
"SaaS is the focus for innovation and investment for major system providers and is specifically designed to meet the needs of an agile and mobile workforce, enhancing self-service business processes and significantly improving the use of management information," the report said.
The fairytale picture perhaps ignores the fact that ERP is hosted. East Sussex County Council will still need to align their processes to the software – facing battles with important stakeholders – and wait while the chosen vendor gets around to fixing any ongoing glitches.
The council plans to sign its new ERP contract in December, just in time to make one vendor's Christmas that little bit happier. ®
Get our [5]Tech Resources
[1] https://ted.europa.eu/udl?uri=TED:NOTICE:401579-2020:TEXT:EN:HTML&src=0
[2] https://www.theregister.com/2020/01/27/sap_system_surrey_england/
[3] https://democracy.eastsussex.gov.uk/documents/g4035/Public%20reports%20pack%2025th-Mar-2019%2010.00%20Audit%20Committee.pdf?T=10
[4] https://democracy.eastsussex.gov.uk/documents/s30788/Item%207%20-%20Modernising%20Back%20Office%20Systems.pdf
[5] https://whitepapers.theregister.com/
Re: Why not get together ?
Mark 78
East Sussex have already got together with Surrey and Brighton & Hove Councils to run their IT systems.
Re: Why not get together ?
Jon 37
They don't have the skills to do that.
They also don't have the money to invest in long-term plans like that, even if they would save in the long term. They have an effectively fixed annual budget, and they are having to cut essential services.
Re: Why not get together ?
Anonymous Coward
But who pays the kick backs and provides all expenses paid nights out if you go open source?
Re: Why not get together ?
Anonymous Coward
The taxpayer!!
Re: Why not get together ?
RM Myers
You do realize that "open source" doesn't mean free, right? There are many open source vendors, and I'm sure many are willing to provide "perks".
Zippy´s Sausage Factory
"The council wants one throat to choke"
In my experience of working with councils, this is generally the single thing in the contract that isn't negotiable. And it's usually the main argument for not going open source, too: "but who do we sue if it all goes wrong?"
Why not get together ?
All UK councils must have roughly similar needs; all are splunking huge sums to solutions providers.
I can't see why they don't club together and produce something that does what they need, then all use it. Sure it would cost an arm & leg and take several years, but after that they will save bucket loads. Yes: there is maintenance (need change, etc). Maybe it could be open sourced and let councils/... in other countries use it, add modules, submit patches, etc.
When all councils are using the same s/ware: exchange of information would be so much easier.