The Home Office is obliged to continue paying Oracle for ERP services until 2016, even as it signs a cost-cutting shared services ERP deal
The Home Office has disclosed that it is locked into a £330 million contract with Oracle for enterprise resource planning (ERP) software, which may conflict with government efforts to cut back-office IT costs by shifting to shared services centres.
The contract, signed in 2009 under the previous Labour government, provides 29, 518 users with access to Oracle E-Business Suite (EBS), and is set to expire in January 2016, according to a statement published in response to a Freedom of Information (FoI) request.
The Home Office said it is planning to upgrade the system next year with the assistance of Fujitsu.
The deal means that the Home Office is obliged to continue paying Oracle for another year, while also having signed up for ERP services from French integrator Steria.
The deal with Steria, signed in October, extends an existing ERP contract with the Cabinet Office to the Home Office and the Ministry of Justice, and was intended as a cost-cutting measure. Under the arrangement, Steria is to provide the Home Office with finance, procurement and HR IT services.
The government said last year the use of shared services centres could cut back-office IT costs by up to £600m per year, but the plan may be held back by departments’ legacy contracts.
Oracle’s ERP software is licensed for 134,700 users across the Department for Work and Pensions, the Cabinet Office, the Department for Education, the Health & Safety Executive and the Office for Nuclear Regulation, according to an earlier Freedom of Information statement. The public sector as a whole spent £290m in 2013 with Oracle, down one percent from the previous year, according to TechMarketView.
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