UK Pensions Department awards Sopra Steria a £115 million extension for legacy ERP project due to project delays.
The UK's pensions and social security department has made a significant move to ensure continuity in its services. The department has extended its contract with Sopra Steria, adding over £100 million to run legacy systems for an additional three years beyond the original expiry date of October 31, 2025.
This extension is a response to delays in replacing the existing Oracle eBusiness Suite 12.2.6 with a newer SaaS-based ERP and HR software system. The Synergy program, a large-scale initiative involving multiple central government departments and costing around £2.5 billion, aims to move these departments to Oracle Fusion, a modern cloud ERP solution.
The contract extension primarily covers running the Single Operation Platform (SOP), a critical legacy system used by the Department of Work and Pensions, the Ministry of Justice, the Cabinet Office, and the Department for Environment and Rural Affairs. The delay in the replacement program has necessitated the maintenance of these legacy systems to avoid service disruption.
The impact on involved departments is substantial. They must continue relying on Sopra Steria’s legacy system services rather than transitioning to the new Oracle Fusion platform as originally planned. The extension locks in Sopra Steria’s role as the sole provider for these critical systems for three more years, highlighting the challenge of switching vendors mid-program without alternatives currently available.
The broader government shared service program, which groups departments into clusters aligned with ERP and HR suppliers, faces ongoing transitional complexity as the Synergy program’s timeline is effectively pushed out.
In September 2024, the Synergy program contract for software and systems integration services, worth £711 million ($955 million), was awarded to IBM and Oracle. The next iteration of the Synergy program's business case will update cost forecasts to reflect the outcome of the business process services procurement, which is still ongoing, having been launched in September 2024.
The full business case for the Synergy program is expected to receive HM Treasury approval by July 2024. The SOP contract was originally under a Call Off Order Form (COOF) from a framework agreement called Independent Shared Service Centre Two. The SOP was migrated from an on-prem data centre to a hosted platform provided by Oracle Cloud Infrastructure (OCI) in October 2020.
The Home Office moved off SOP to Oracle Fusion in 2021 through its direct relationship with Oracle. However, the Ministry of Justice cancelled its £100 million ($134 million) ERP procurement in 2021 to align with the new shared service strategy. Despite this, it remains uncertain when it will transition to a new system.
The Synergy program's whole-life costs were set at £2.49 billion ($3.3 billion) in March 2024. The value for money position of the Synergy program is sensitive to delays, which can lead to cost increases due to longer program duration and reduced benefits.
[1] Source: Government Digital Service - Synergy Programme
- The department's decision to extend its contract with Sopra Steria, despite delays in transitioning to Oracle Fusion, has resulted in an additional £100 million investment for managing legacy systems for three more years.
- The Synergy program, a collaborative initiative among multiple central government departments, aims to move these departments to Oracle Fusion, a modern cloud ERP solution, at a cost of around £2.5 billion.
- AI, databases, and cloud technology play significant roles in the Synergy program, with the next iteration of the program's business case likely to update cost forecasts upon the completion of the business process services procurement.
- The delay in the Synergy program has necessitated the continued use of Sopra Steria's legacy system services, locking in the company's role as the sole provider for these critical systems for three more years.
