Purpose of the item:
To provide an update on the Digital Business & Insights programme including its projected benefits.
Becky Rush, Cabinet Member for Finance and Resources
Leigh Whitehouse, Deputy Chief Executive & Executive Director of Resources
Andrew Richards, Digital, Business and Insights Programme Manager
Key points raised during the discussion:
1. The Chairman read out the recommendations made by the Resources and Performance Select Committee on 8th October 2020, before current membership of the committee was in place: “The Select Committee is concerned about the tight deadlines, achievement of savings, and lack of an obvious contingency plan. Therefore, the Select Committee recommends that there is assurance put in place demonstrating effective monitoring of risks, timely review of progress and implementation of next steps”. Officers were invited to provide an update regarding the delay to the go-live date and the programme currently. An officer summarised that a review was undertaken in Autumn 2021 when it was realised that the planned December go-live was no longer deemed achievable. This resulted in a re-plan and additional funding request being put before Cabinet on 21 December 2021. Good progress had been made towards the April go-live since that point, including a finalised build of the solution, integrated testing system and parallel payroll running activity. A Cutover Readiness Checkpoint will be completed on 28 January 2022 to assess readiness to progress with the cutover plan for an April go-live and whilst uncertainty and risks remain, the team continued to focus on the delivery of the April go-live.
2. The Chairman asked if the material risk to achieving the April go-live could result in further delay and cost to the Council. An Officer said that the programme was replacing the existing SAP (Systems and Applications) system at Surrey County Council (SCC) and would touch the whole organisation of approximately 10,000 users in addition to 30,000 external users included in school’s payroll. Back-office processes across finance, procurement, Human Resources (HR) and payroll as well as integrations currently in existence for SAP would be included with the addition of new integrations. The result was a very large-scale programme and a significant risk of further delays remained. A Deed of Variation had been agreed to the existing contract with Unit4 to reflect agreed milestones and to ensure that SCC was able to exercise its rights fully. Unit4 were paid on achievement of agreed milestones, with SCC being responsible for delivering its side of the contract to avoid any additional costs or delays.
3. A Member recalled that the Committee had questioned the Digital, Business and Insights (DB&I) deadline overview at the Resources and Performance Select Committee Meeting on 17 September 2021 and received the response that it was too early for an update. A programme update, was expected at this stage, including stakeholder board meetings with RAG (Red, Amber, Green) rated information on processes at that time. There was a concern that translation mapping of the target source data from the existing SAP system was not obvious or of sufficient quality and that data mapping and translation into Unit4 was not completed fully or accurately. An officer explained that there had been complexity in understanding how to extract the data and how to transform that data enabling the load to Unit4. Better coordination and management from the supplier side to coordinate the rectification of those data issues had since been developed.
4. A Member queried if at this point the data migration and transformation had been completed fully or had the process been exited too early to enable a faster move to begin User Acceptance Testing (UAT). An Officer said that the data migration was still ongoing. Data migration supporting cycle five of UAT would continue and there would be a further full data migration as part of cutover, up to the go-live date.
5. A Member asked if the reference to insufficient quality of the data the report referred to insufficient quality of the data in the current source system or insufficient quality of data in the translation and implementation into Unit4 from the source. An Officer explained that the reference referred to both instances.
6. The Chairman asked if there had been sufficient contact with contracted parties to date. An Officer explained that a full-time data migration lead had been in post since the beginning of the programme. The contract with Unit4 specified that they were required to provide leadership and responsibility for the programme’s data migration and when a gap was identified, Unit4 provided the additional leadership for finance, procurement, HR and payroll.
7. A Member questioned why the programme entered the UAT testing phase without the data migration and data mapping being fully completed and confirmed. An Officer explained that authorisation had been given to start UAT with simple aspects of the solution to progress UAT in the absence of the master data. The expectation was that in parallel to that, the data migration stream would complete at the same time. Unfortunately, when the data arrived the quality was not sufficient, causing difficulties.
8. A Member asked what might have been done earlier to avoid problems and/or mitigate the risks. An Officer explained that lessons could be learned from the method rather than earlier interventions. A key piece of feedback to consider going forward was to include a requirement at the tender stage to have sight of the system at an earlier stage in the implementation project to enable business stakeholders to develop a clearer understanding of the solution. When considering future projects, it would be beneficial to consider senior stakeholder ownership from within the business at an earlier stage. Stipulation of the requirements of additional resources and more transparency at the point of data migration would also have benefitted the process in addition to ensuring contractors communicated changes to technical environments more clearly
9. A Member asked what the £3 million in additional costs related to. An Officer explained that the additional costs related to the SCC programme team and additional supplier costs to enable continued funding until go-live and the resources required within the three- month early support period.
10.A Member asked if the use of SAP would continue, if it would still be supported and were there any risks relating to this. An Officer said that SAP was supported up to 31 December 2022 which would allow the County Council to operate even if there were a delay beyond April 2022. Risks had been mitigated and Her Majesty’s Revenue and Customs (HMRC) patches had been applied to SAP to ensure that employees would still be paid correctly in the event of any difficulties.
11.A Member asked if the project had been defined and analysed properly. An Officer confirmed the project had been defined and analysed properly. Clear objectives and design principles had been considered throughout the process with the project including an outline business case stage, procurement work completion, senior management approval and Strategic Investment Board (SIB) development. An external consultancy had been employed to look at the strategic options whilst considering the aims of SCC to aid decisions and development. A lack of transparency with the supplier had caused some difficulties in addition to the team working remotely due to COVID-19.
12.The Deputy Chief Executive & Executive Director of Resources reiterated that the team had been frustrated that it had not been possible to work to the initial timescale however this was not the result of a single action or reason as some of the questioning indicated a desire to identify and it was important to recognise the huge amounts of good work and progress that had been achieved within the programme, whilst still being frustrated about the revision to the timetable. Internal audit had been scrutinising events and highlighting concerns to the programme board where appropriate, lessons had been learnt and future SCC projects would benefit from these experiences.
13.A Member queried the feedback from staff testing the new system. An Officer summarised that feedback had been positive overall. There had been some frustration with data quality during the early stages but they had moved forward to putting the system through its paces.
14.A Member asked if lessons learned would be conveyed to the districts and boroughs. An officer said that this would be fed into the programme management part of the process when the project had closed.
15.The Chairman observed that the main issues for delayed delivery of the project concentrated around data transfer and changing data and by early September it had become clear that the project was not deliverable within the timescale. The Chairman asked if the project board and Cabinet Member for Finance and Resources were aware of the difficulties prior to this point. The Cabinet Member for Finance and Resources explained that the Select Committee meeting took place before the date of the project board and at that time negotiations with Unit4 were taking place. Discussions were taking place to identify solutions and following the decision at the board it was a priority to negotiate shared costs and draw a plan to mitigate risk going forward however timing sensitivity meant that these plans could not be discussed openly at the last Select Committee meeting, by when the decision to revise the date had not been made.
16.The Chairman said that issues had been identified in May and June 2021 and was concerned that it had only become in apparent in September 2021 that the project would not be deliverable within the given timeframe. The Select Committee voiced concerns regarding the project 15 months ago and without being overly hard on those involved, things had been missed. What was the project boards involvement during this time as it appeared that those intimately involved did not have control on events. An Officer explained that items reported to the project board during the summer related to some workstreams within the program but the supplier continued its reassurances that the programme remained deliverable in line with initial targets. The potential for elements of the programme to slide became apparent during August and September 2021 with the Select Committee meeting a week before the project board agreed to delay the go-live date. At this point the programme board were presented with three options, proceed as planned with 1 December 2021 go-live and consider risks around that, a phased option with some elements to go-live on 1 December and some to implemented subsequently and lastly, to move the entire go live date.
17.A Member asked why User Acceptance Testing (UAT) of cycle five had begun before completing cycle four. An officer said that a new data migration load had impacted progress on UAT with a decision made to refresh the environment and begin a longer cycle five to 18 February 2022. Although not an ideal position to be in, the level of testing gained momentum during December 2021 and was continuing.
The Resources and Performance Select Committee: