Manchester City Council
Report for Information (PART A)
Report to: Resources and Governance Scrutiny Committee – 18 July 2024
Subject: Our New Finance & HR System (PART A)
Report of: City Treasurer
Director of HR OD & Transformation
Summary
The Council is in the process of replacing its legacy SAP HR and Finance system
(also referred to as an Enterprise Resource Planning (ERP) system), which was
implemented in 2006. The technology platform which it operates on will no longer be
supported after 2027. This report provides an update on the work undertaken since
our previous report on 7 March 2024, including an update on the current contractual
position and immediate next steps.
Recommendations
The Committee is recommended to note the content of the report.
Wards Affected: All
Environmental Impact The previous report to this committee detailed the
Assessment -the impact of the plans for reducing our carbon impact in areas
issues addressed in this report on such as printing and energy consumption, in
achieving the zero-carbon target addition to the move to a cloud-based system and
for the city. the benefits that brings.
In addition, our procurement process has
allocated a weighting of 10% to carbon and
environment considerations during evaluation,
with the preferred bidder scoring the joint-highest
marks in this area.
Equality, Diversity, and Consideration of equality, diversity and inclusion
Inclusion - the impact of the issues for Manchester residents, employees and
issues addressed in this report in businesses have been considered in the
meeting our Public Sector development and procurement of the replacement
Equality Duty and broader system. Our equalities groups were consulted,
equality commitments. and feedback has been factored into the system
requirements. The program team will carry out an
Equality Impact Assessment (EqIA), and EDI
report that will detail what steps can be taken
inform the programme.
The change management programme will take
needs and experiences into account when
planning organisational training on the new
system.
Manchester Strategy outcomes Summary of how this report aligns to the Our
Manchester Strategy/Contribution to the
Strategy
A thriving and sustainable city: The programme is closely aligned with the ICT &
supporting a diverse and Digital Strategy which is designed to strengthen the
distinctive economy that creates deliveries of the priorities in the Council’s digital
jobs and opportunities plan.
A highly skilled city: world class The new Finance and HR system will enable to us
and home-grown talent sustaining further improve our employee brand and our
the city’s economic success recruitment offer to make sure we are attracting and
developing diverse talent in the organisation.
A progressive and equitable city: User self-serve modern technology will support best
making a positive contribution by use of resources and enhance data quality for
unlocking the potential of our decision making around organisational finances
communities and workforce deployments including supporting
MCC to forecast the roles we will need to deliver
services for our residents.
A liveable and low carbon city: a The project will support ICTs ongoing commitment
destination of choice to live, visit, to Cloud-first environments and the reduction in
work carbon emissions that they bring. This will include
reducing our reliance on paper and printing where
possible.
A focus on Zero Carbon formed 10% of the
valuation criteria during procurement. The selected
preferred bidder scored the joint-highest score in
this area.
A connected city: world class The new system will enable our HR and Finance
infrastructure and connectivity to functions to deliver digitally, supporting
drive growth Manchester’s ambition of being a digital leader.
Full details are in the body of the report, along with any implications for:
• Equal Opportunities Policy
• Risk Management
• Legal Considerations
Financial Consequences – Revenue
There are no direct revenue consequences arising specifically from this report.
Financial Consequences – Capital
There are no direct capital consequences arising specifically from this report.
Contact Officers:
Name: Tom Wilkinson
Position: City Treasurer
Telephone: 07714 769347
E-mail:
[email protected]Name: Mark Bennett
Position: Director of HROD & Transformation
Telephone: 07908 259971
E-mail:
[email protected]Name: Christine Mullins
Position: Chief Accountant
Telephone: 0161 219 6438
E-mail:
[email protected]Name: Amy Powe
Position: HROD & T Change Programme Manager
Telephone: 0161 234 1041
E-mail:
[email protected]Background documents (available for public inspection):
The following documents disclose important facts on which the report is based and
have been relied upon in preparing the report. Copies of the background documents
are available up to 4 years after the date of the meeting. If you would like a copy,
please contact one of the contact officers above.
• Key Decision – Approval of the decision to select a preferred bidder was
granted by the City Treasurer on 7 February 2024 and approved by the
Programme Board
• Capital Programme Monitoring P4 2023/24 – Changes to the revenue budget
of the programme over the next four financial years was requested and
approved – Council 4 October 2023.
• Resources and Governance Scrutiny Report, Our New Finance & HR System
– 22 June 2023.
• approved – Council 4 October 2023.
• Resources and Governance Scrutiny Report, Our New Finance & HR System
– 7 March 2024.
1.0 Background
1.1 In 2022 it was reported that the Council needed to replace its legacy SAP HR
and Finance system (also referred to as an Enterprise Resource Planning
(ERP) system), which was implemented in 2006. The technology platform
which it operates on will no longer be supported after 2027. Due to significant
adaptations instigated by the Council during implementation of the current
system, it was recommended that the Council embarked on procuring a
replacement system.
1.2 In March 2024, the programme team reported to this committee to confirm that
a preferred bidder had been chosen but due to the procurement standstill
period the preferred bidder could not be named. At the Executive Meeting on
the 15 March 2024 the preferred bidder was announced as HCL Tech, and
they would be implementing S/4Hana for Finance and Success Factors for HR
with SAP RISE as the platform.
1.3 Since then, the team has been working on the programme phasing,
governance, risk assessment, resource review and the commercial contract
finalisation, on which further details are included in Part B of this report.
2.0 Programme Approach
2.1 HCL Tech have indicated that they will use the Activate+ Methodology to
manage the delivery of the project. This is a SAP structured methodology to
ensure a smoother transition from SAP legacy systems to new cloud-based
solution. The benefits are a more streamlined implementation process, aimed
at reducing to deliver successful implementation.
2.2 The stages in Activate+ are: Discover, Design, Deliver and Deploy. Following
contract signature the project will move into the planning of the activities that
will take place within each of these stages which will identify the key
milestones.
2.3 The Discover stage will include making some strategic decisions that will be
critical to the project including defining the project governance between the
four involved parties (Manchester City Council, SAP, HCL Tech and a data
migration specialist), provision of the development and test systems to the
Council and documentation of the project goals and objectives including the
identification of the likely dependences and potential risks.
2.4 The Design stage is then expected to commence in the Autumn with the
delivery of the Fit to Standard workshops. These workshops will look in depth
at the functionality of the system and how this can be used to meet the
requirements the council documented in procurement, with the Council
embracing the adopt not adapt approach.
2.5 Following this the programme will move into the Deliver phase where HCL
Tech will build the solution using an agile and iterative approach ensuring that
the Council is actively consulted through system walkthroughs, the sharing of
mock ups to validate or correct any assumptions that have been made as part
of the build. Throughout this phase, system integrations will be developed.
Sign off by the Council will be needed throughout this period, as will approval
of any changes to the specification agreed on by all parties.
2.6 The final phase is Deploy, where the business readiness testing is undertaken
along with end-user training ahead of the system going live. This will also
include the ‘cutover’ to the new system and final migration of the data.
3.0 Progression of the Contract documents
3.1 Contracts of these nature need fine balance between timeliness and risk
assessment due to the nature and newness of these cloud based, software as
a service (SaaS) contracts for the council. The Council has been working
closely with HCL Tech and SAP on the contract document and evaluating final
clauses before concluding them.
3.2 The contracts consist of several documents including the:
• MCC Standard Contract for System Implementation. – This is the main
contract between the suppliers and the council
• HCL Statement of Works. – This is a HCL document that outlines in more
detail what work is covered by the contract
• HCL Contract Price and Resource Documentation. – This document
outlines the price that will be charged and what resources are planned by
the supplier to engage on the contract.
• HCL Plan on a Page (PoaP). – This provides a high-level plan of timescale
for the work to be carried out.
• HCL Support Documentation (will be finalised outside of timescales).
• Data Migration Specialist organisation - Rough Order of Magnitude (ROM)
- estimate for data migration and cleansing.
• SAP Bill of Materials for software licensing. – This outlines the software
modules purchased and the pricing.
• SAP Order Form. – This is the order form that will be submitted once all the
contract documents are agreed.
• SAP Terms and Conditions. – These are SAP terms of the contract that will
form part of the overarching contract.
3.3 Further details in relation to contract discussions are outlined in the Part B
report to this committee due to the commercial nature of the documents.
3.4 All proposed changes to the programme implementation approach and
impacts have been discussed and approved by the Our Finance and HRODT
Replacement systems board.
4.0 Implementation Costs
4.1 Despite the additional planning, phasing, and changes to implementation plan
with the preferred system and implementation partner, the programme
remains within the approved budget. Part B to this report provides more
detailed information.
5.0 Programme Team Readiness
5.1 The Council has ensured a core dedicated team has been in place since the
decision was taken to replace the SAP system. This team has developed the
specification and supported the procurement process and contractual
negotiations. Whilst the contract documentation is being worked through, the
programme teams in HR, Finance and ICT have been undertaking research to
learn more about the system functionality to ensure we are in the best
possible position for starting the next phase of the project which will be Kick off
and Design.
5.2 This has involved becoming a more active participant in the SAP User Groups
and expanding our network across other similar organisations who either
already have implemented these systems or are in the process of
implementing. These calls are giving our Programme Team useful context and
valuable insight into the design phase and the roles they will need to play.
5.3 As part of these conversations with other Local Authorities, the Programme
Team has established working groups where learning is shared. One of the
areas of focus for this is the behaviour change as this is an area that is
highlighted as a key priority for these programmes. The project has part
funded the creation of a new Behaviour Change team which is sitting with the
Organisational Development and Transformation team in HROD&T. This team
is working on understanding the workforce’s appetite for change across the full
scope of Directorates in the Council and understanding the elements of the
system that will have an impact on the way people work.
5.4 An area of risk for programmes like this relates to data migration. Last month,
a recommendation was taken to the programme board to procure a specialist
data migration organisation. This organisation will support the Council to
develop a data archival solution for the data that will not be migrated but
needs to be retained for legal reasons, and the actual data migration to the
new system. The company will undertake a full review of our data and support
with the data cleanse work that will be required ahead of any migration to the
new system.
6.0 Next Steps & Timeline
6.1 The programme has entered a period of contract finalisation with the preferred
system implementor and platform provider. The aspirational deliverables are
shown below:
Deliverables Date
HCL and SAP contracts signed July 2024
Data migration specialist contract signed August 2024
SAP MCC starter system live August 2024
HCL onboarding August 2024
Fit for standard workshop planning ongoing
7.0 Recommendations
7.1 The Committee is recommended to note the update of business, progress of
programme and the overall updates.
