Oracle and Fujitsu help DWP save £230m through shared services

Oracle and Fujitsu help DWP save £230m through shared services

Good news from government IT, Debra Lilley tells Oracle OpenWorld

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The Department for Work and Pensions (DWP) has saved £230 million since 2006 through its implementation of Oracle’s E-Business Suite, which is managed by Fujitsu and sold as a service to both the Cabinet Office and the Department for Education (DfE).

Debra Lilley, Oracle alliance director for Fujitsu in the UK, was speaking at Oracle OpenWorld this week in San Francisco and outlined the benefits of the implementation.

Oracle and Fujitsu began working with DWP in 2005, when the department had five core service lines, which were all running on separate systems. It had a separate accounting system, employee services system, debt management system, resolution of payments system and a purchase to pay system.

At the time it took 4,500 people to run these services. However, since consolidating into one single instance of E-Business Suite, DWP has managed to increase the number of service lines it has and simultaneously reduce the amount of staff running them to 1,300.

It had been previously running its systems across 24 physical sites; it now operates on just five. DWP is currently using version 11.5.10, but is in its R12 upgrade and adding performance management software, Hyperion, this month.

In 2009 DWP also started selling this as a shared service to the Cabinet Office, which was shortly followed by the DfE in 2010.

Lilley explained: “They have 121,000 end users on e-business suite. We believe it’s about the third largest installation in the world.

“DWP has a real shared service. This isn’t a shared service where it is in one organisation with different parts of that organisation working together, they actually sell this as a service to other government departments, and that has cut down their costs down as well.”

She added: “Benefits come when you consolidate yourself, but the true benefits come when you can sell those services on to somebody else and you are actually sharing infrastructure, and also the people that are running that.”

The DfE achieved its return on investment within three years, where now it is also saving £8 million a year by using the shared service.

Lilley said that the reason DWP, DfE and the Cabinet Office have made significant savings is because they are operating a shared service throughout the entire stack, rather than just at the infrastructure level, which often occurs with shared services in local government.

“We are finding that when people just look at the infrastructure, there are some savings there. Your shared service story could be just you just share a box with somebody, have totally separate instance, and they only know about each other if they doing something at the box level,” said Lilley.

“But actually the power of shared services happens when you move further up the stack. So if you move in your separate organisations within an application, then there is another level of savings to make there.”

She added: “We are getting between 25 to 40 percent of savings at the infrastructure level, 25 percent at the technology [application] level, and then the majority, 30 to 50 percent, come from when you are sharing people actually doing the processes. DWP has managed to make the savings at this actual process level.” 

DWP also meets with the Cabinet Office and the DfE on a monthly basis in order to find out if the departments are looking for it to deliver any additional functionality, or additional processes, which Lilley believes is extremely important.

She said: “A really important point I’d like to make about consolidation is that it’s not a one off job. You don’t come along and say I have 300 applications now, I want to move to one, and then that’s the job over.

“It’s not. You processes will change, your organisation will change, the things you have to deliver will change. It’s a constant thing.”
Finally, Lilley revealed that DWP has a proof of concept running with Oracle’s business intelligence (BI) applications, where the department has big plans for the this in the future.

She said: “They have done a proof of concept on the BI apps, but only on high level data so they have not spread it out on everything. That will be one of their next intentions.

“They have got the BI platform in, but they aren’t using it extensively at the moment. However, they have got lots of plans for it, they are just waiting to upgrade to 12.0, as they don’t want to have to make any schema changes twice.”

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