NHS England's £200m ERP replacement misses another deadline as procurement runs 2 years behind schedule

NHS England has missed the latest deadline in the procurement of a £200m replacement ERP system responsible for managing the UK's annual health spending of £110bn and is now more than two years late.

The migration of the Oracle financial management system to a cloud-based ERP system, which is now judged a "red" risk, according to the government's own Infrastructure and Projects Authority, was supposed to see tender documents published by the end of July.

Delays had already forced the government to spend £59.2m on a contract extension for its existing system as it ran out of road with the procurement and implementation of a replacement.

The Integrated Single Financial Environment (ISFE) is currently provided through NHS Share Business Services, a joint venture between the Department of Health and Social Care (DHSC) and French IT services company Sopra Steria. The contract with the supplier was set to end in April 2021.

In the tender notice for the contract extension, NHS England said the "current timeline assumes that the tender for the replacement ISFE system will go live toward July of 2021."

No such tender documents have appeared and NHS England has stonewalled The Register's requests for further information for more than a week.

"The ISFE re-procurement project is a large and complex project which will deliver a replacement for the current service," the document said. "During the planning stages for the reprocurement, it was identified that short term uncertainties regarding Group structure posed significant challenge to finalising a tender specification during 2019 with a review to implementing a replacement service by April 2021. The outbreak of the COVID-19 pandemic has meant that the project team and other key colleagues have had to focus their resource on keeping critical business processes running and work on the procurement of the new contract has inevitably been delayed."

But the project was already running more than one year late before the pandemic hit.

In 2018, a prior information notice, designed to gather intelligence from suppliers before the formal competition started, priced the project at £200m and said that a contract notice would be published by 18 March 2019.

It said that the ISFE system and service "enables group entities to complete their financial year end and other duties including accounting and payment to other [NHS] Commissioning organisations, NHS provider organisation, GP practices, opticians, pharmacies, dentists as well as suppliers."

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"The current platform holds the financial information and is the reporting and transactional environment for the annual group revenue and case resource of circa £110bn," it said.

However, NHS England published another prior information notice in October 2020, this time proposing a replacement with cloud-based software to support 450 separate organisations, including all elements of the NHS in England and more than 1.7 million employees.

It's not only solid evidence of procurement which is absent from the ERP system at the core of the UK's health economy. The 2020 Prior Information Notice also said an outline business case would be ready by January 2021.

NHS England has refused to answer The Register's questions about whether the business case is ready.

Meanwhile, the current system is already on the move to a new platform. The ISFE runs on Oracle 12.2. NHS Shared Business Services said it had commenced the move to Oracle Fusion Cloud Financials. "The first stage of this is due to be completed in September 2021, when we will then look for further feedback and engagement from NHS organisations," it said.

NHS Shared Business Services does not only support NHS England’s financial systems. It offers a range of procurement, HR and financial services BPO to the NHS, with clients including more than one hundred NHS providers and arms-length bodies.

The report by the Infrastructure and Projects Authority said the project to procure the next-generation ISFE as a managed service provision including a financial and accounting system is at "red" risk of going live by April 2024.

For clarity, when the government body which reports to the Cabinet Office and the Treasury says red, it means that the "successful delivery of the project appears to be unachievable." Stumbling blocks might include "project definition, schedule, budget, quality and/or benefits delivery, which... do not appear to be manageable or resolvable."

With £110bn NHS spending rolling through the system, that might make an interesting in-tray item for newly appointed NHS England CEO Amanda Pritchard. ®