Four departments launch £1bn tender for shared services tech providers

DWP, Home Office, MoJ and Defra seek joint deal with software provider and system integrator to build common operating model
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By Sam Trendall

07 Jun 2023

Four of the biggest departments have opened bidding for a decade-long £1bn-plus contract to cover the provision of cloud software platforms and system integration services as part of government’s ongoing shared services drive.

The Synergy cluster – one of five groups of departments brought together by government’s 2021 Shared Services Strategy – is led by the Department for Work and Pensions, and also houses the Home Office, Ministry of Justice, and Department for Environment, Food and Rural Affairs.

The cluster has launched a single procurement process through which it intends to identify both a provider of cloud-based back-office enterprise resource planning (ERP) software, and a systems integrator to provide implementation and technical support.

A contract notice newly published by the DWP outlines that the departments require that “technology… and SI suppliers work together in partnership from the outset to jointly propose a cohesive solution and delivery approach which meets the [departments’] outcome-based requirements and demonstrate they are a compatible supplier partnership”.

The successful software and integration bidders will be co-signatories to a dual contract of five and ten years in length respectively. These terms could each be extended by up 24 months – meaning the software deal could run for seven years, and the SI contract for 12 years.

At least £933.65m – plus VAT – is set to be spent via the agreement.

Once the contract is in place, one of the suppliers’ first objectives will be to “building a common operating model and establishing business process services” to be used collectively across the four departments – who employ a collective tally of 250,000 people, representing more than half of all civil servants.

Alongside the operating model – which will be expected to “continually evolve throughout… five programme delivery phases”, the SI and software suppliers will support the creation of “a new user-centric service including common data standards”.

The government has projected that the overall shared services initiative will deliver savings of £1.8bn over the next 15 years – including direct savings of £500m and £1.3bn in efficiencies gained.

 “Benefits will also continue to evolve over time [and] this will help identify additional benefits for the programme and provide more robust data and narrative to justify the current benefits profile,” the Synergy contract notice said.

“[Synergy] seeks to deliver value and efficiency across all transaction services, including the separation of technology from service centres.  The Covid pandemic, and the challenging fiscal environment that has followed as a result, has heightened the drive and need for more effective and efficient delivery by all government fepartments.

"Key to this ambition will be the ability to capture, manage and improve the quality of finance and HR data to enable better informed decisions. The Synergy programme will drive significant business transformation across four major departments in support of this ambition.”

Work to unite the cluster on shared back-office services will be helped by the fact that, according to the procurement document, the four departments all currently have a business process services outsourcing arrangement with SSCL – a joint venture between the Cabinet Office and consultancy Sopra Steria.

SSCL also provides DWP, Defra and MoJ with an Oracle-based ERP system which, in 2020, was moved from an on-premises to a cloud environment. The Home Office also uses Oracle’s back-office software – but works directly with the vendor itself.

Alongside the Synergy cluster – which represents government’s most delivery-focused departments – is the policy-centric Matrix cluster of eight departments, a Defence grouping for the Ministry of Defence and the Armed Forces, an Overseas cluster largely comprised of the Foreign Commonwealth and Development Office, and the HMRC-led Unity cluster, which also houses the Departments for Transport and Levelling-Up.

A National Audit Office report late last year revealed that the Matrix, Synergy and Unity clusters had sought cumulative backing of £759m during the 2021 spending review – with all three bids rejected. HM Treasury has since provided the trio with an interim funding package of £300m, intended to help progress the shared services implementation and address the highest-risk systems. But the NAO warned that this is a little over a £100m short of what auditors claim is required.

An investigation published by MPs last month warned that government’s ability to deliver its shared-services ambitions would be hampered without additional funding and focus for the programme.

This article first appeared on our sister publication website PublicTechnology

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