News article

Posted by Stuart Lauchlan PM | on Fri, 25/01/2013 - 10:36  2741

How do the FCO's Oracle plans fit with national shared services?

The Foreign and Commonwealth Office (FCO) is planning a £750 million investment in an Oracle shared services platform that will be opened up to other government departments. 

The government is looking to consolidate the many current disparate systems onto a select few shared Oracle platforms. A prior information notice issued this week states:“The scope intends to cover existing Oracle platforms in the UK government departments and any supporting technologies, and to include upgrades and implementations of new Oracle version for these existing platforms”.
The notice states that the framework procurement is in support of the Cabinet Office Shared Services strategy and will be open to all central government departments, arms length bodies and agencies. It will apparently replace an existing contract with Capgemini.
The notice also outlines the following lots potentially available for suppliers to bid on:
  • Application Managed Services (AMS) (including care & maintenance of legacy systems);
  • Implementation (including design and build);
  • Infrastructure with hosting options (including development and operation);
  • Transition;
  • Business change;
  • Management information provision (including Business Intelligence and Enterprise Data Warehouse).

Last year Oracle did a deal with the Cabinet Office to reduce licensing costs, which should deliver £75 million worth of savings by 2015. The contract is likely to be issued in March, and will run for a minimum of 3 years, with the possibility to extend to 4 years.

But some commentators have asked how this new framework arrangement will fit in with the Shared Services strategy published by the Cabinet Office  late last year. “This framework appears to support departments continuing to run Oracle or, indeed, choosing to move to Oracle,” notes Georgina O’Toole of research firm TechMarketView. 
“This is surprising as when the government Shared Services strategy was published in December, the Cabinet Office continued to highlight the cost of running Oracle ERP. It estimated that moving to a single Oracle solution for the whole of Whitehall would save 40% on the current average cost per employee of £160 for a multiple installation set up. 
“However, it also estimated that moving to a Tier 2, 'low cost' ERP solution could bring the cost down to £52 a head, a saving of 67%. The document went on to say 'this level of saving does not include the savings which would be expected from a competitive procurement or the possibility of hosting ERP in the Cloud'. 
“This framework, though, gives the message that the Cabinet Office has had to accept that some departments and agencies are wedded to the Tier 1 solutions,” she adds. “And if they are not going to move away from Oracle or SAP, the best the Cabinet Office can do is ensure they are getting the best deal. There's no doubt there will be plenty of SIs looking to protect their existing relationships by getting a place on the FCO framework.”