Case study: How Middlesbrough Council went to G-Cloud to replace SAP with Unit 4

Middlesbrough Council has shaken out its software estate, swept out SAP and procured a new ERP solution for finance, payroll and HR via G-Cloud

There's nothing like budget cuts to focus people's minds and, at least as far as austerity in the UK is concerned, it is in the local authority sector where the pinch has arguably been felt the most.

However, when Steve Fletcher was appointed corporate programme manager at Middlesbrough Council just two years ago, he uncovered plenty of scope for economies in the council's IT systems, including an SAP finance and payroll system that seemed to require more resources to maintain than an organisation the size of the council ought to be spending.

Not only that, but the heavy-duty software was far from popular and, while the council ran SAP for payroll on the one hand, it remained dependent on manual processes for human resources on the other. Not only could the council potentially save money on the software, it could also improve the efficiency of its HR function.

"We had a lot of separate solutions but we didn't really utilise a full organisation-wide solution," says Fletcher. As a first step, Fletcher brought in a consultancy to examine the council's software licensing, which uncovered a multitude of savings that could be made on software licensing.

"We had a lot of separate solutions and the exercise gave us a road map for where we really ought to be. That also gave us a cost-benefit that helped tie into our transformation programme," he adds.

The choice for the council, believed Fletcher, would either involve doubling down on SAP by adding HR and other modules, but running it more efficiently; or procuring something more suited to the local authority via G-Cloud. After examining the options, Middlesbrough opted for a cloud-based system from Unit4, built for the needs of local councils, procured via G-Cloud.

This decision was taken in May and the implementation is ongoing.

Out of the box

The current system is run by outsourcer Mouchel, with Middlesbrough's SAP system being run out of Mouchel's data centre in Lincoln. However, 10 servers are also required to run in a data centre operated by the council in-house dedicated to the SAP system. This is another area where the council is expecting to save resources and money.

Like many organisations, Middlesbrough Council has decided to largely take the software as it comes and reorganise accordingly, rather than trying to configure the software to fit its existing processes. The reason? It is invariably the most efficient way of conducting these processes which, in any case, are not exactly core to the council's mission, while maintenance and upgrades are also easier.

"We've accepted that we will be doing significant business change on our side and taking it 80 per cent out of the box from Unit4 with a 'templated solution' is very much the standard local authority spec'," says Fletcher. "It's an out-of-the-box solution and we're doing a programme of business change around that."

However, while the HR system only needs to be set up – because the council does not have an existing system from which to migrate – the finance system is not so straightforward because the council must, by law, have at least seven years of financial data readily available. That has called for a migration of data from SAP to Unit4, which Unit4 is largely handling, due, says Fletcher, to a lack of in-house SAP and data migration skills.

G-Cloud procurement

One of the benefits of G-Cloud is that councils don't need to run costly and time-consuming tenders.

"We'd already had the applications reviewed and done a piece of work looking at a number of different providers," says Fletcher. One of the options considered was taking a best-of-breed approach – HR from one provider and finance from another. "We still saw a cost benefit compared with the SAP solution," he adds.

"When we decided to go for a full ERP solution, we went via the G-Cloud 'long list'. We knew what we were looking for and drew up a shortlist and through our own procurement rules were able to select a framework. It wasn't a traditional procurement process where you get all the sales team wheeled out to tell you how wonderful their product is," says Fletcher.

As a result, the council saved time, effort and money, making the decision to shift to Unit4 in May, with a go-live date set for April. "As of April 2015, it will be our finance system and we'll be working on it, not SAP, as from that time," says Fletcher.