Agenda item
Presentation - Project Athena
This is a Pan London project involving 6 Local authorities to create a single ICT and shared services platform for London public sector. A presentation will be delivered by Clive Heaphy, Director of Finance and Corporate services, giving details of the project including the benefits of the project, the implementation proposal, timescales and costs.
Minutes:
Clive Heaphy (Director of Finance and Corporate Services) gave a presentation to Members on Project Athena, a pan-London project that was essentially IT focused but was also with a service delivery element to it. The ultimate aim of the project was to deliver a single ICT and shared services platform, however the first phase of the programme would focus on HR and payroll functions. In order to create a system to enable this, the first stage would involve standardising processes to fall in line with the other London boroughs that are part of Project Athena. The council would also need to implement Oracle Release 12, migrate some systems to Oracle, introduce Business Analytics reporting and empower staff to manage budgets and resources. Clive Heaphy added that even if the council had not joined Project Athena, it would still have needed to introduce Oracle Release 12, however doing so with project partners would allow costs to be shared. Ultimately, Project Athena partners would share the delivery of not only HR and payroll functions, but also finance and procurement services possibly via a joint committee arrangement.
Clive Heaphy explained that ‘Cloud’ technology would be used to operate the system, with information being hosted externally at a centre located within the EU, which would considerably lessen the risk to holding data on site. Cloud technology would help reduce data storage costs, currently a considerable cost to the council. The London Borough of Havering had been proposed as the host as it had already introduced Oracle Release 12. The other members of Project Athena were the London boroughs of Barking and Dagenham, Croydon, Lambeth and Lewisham. There were a further eight London boroughs who had Oracle that may join the scheme at a later date. In the meantime, work was continuing on putting the appropriate joint governance arrangements in place and councillor involvement was also being discussed. Clive Heaphy referred to the efficiencies of using a common platform and then turned to the council’s objectives, which included vastly improved services in HR and payroll, a standardised, simplified, streamlined process and services and significant and on-going financial benefits and to enable self-service in HR functions. As it was intended to introduce Project Athena in two phases, this would reduce the risk element and allow the council to learn from any issues from those project partners who were introducing all processes at the same time. The impact of the changes on HR related activities, which were currently very labour intensive, would mean a reduction of 15 back office operational staff. The partnership working with other local authorities supported the One Council Programme approach, whilst the transition to a single Oracle Release 12 platform for HR and payroll functions and ultimately financial tasks too would bring efficiencies and drive down operational costs. Members noted that the cost of implementing the scheme was around £2m and a tender exercise would be undertaken for a ‘systems integrator’. Clive Heaphy outlined the four possible financial benefits scenario and suggested that scenario one, a combined savings of £1.206m per year, was realistically achievable.
Clive Heaphy advised that amongst the risks associated with cloud hosting was the debate within the EU regarding the security of data in data centres and this required further consideration. Another risk was that Oracle HR needed to be implemented before the present Logica HR system contract expired at the end of September 2012 in order to avoid additional contract extension costs. One of the alternative options considered, to locally host Oracle, would mean being reliant on local staff to manage and maintain Oracle Release 12 and high costs would be associated with this as new staff would have to be recruited in an area of high demand. If the present system was maintained, it would not be possible to deliver HR self service and it would also not be able to generate the same kind of savings as Cloud technology. Members noted that maintaining the Logica HR system was not considered a realistic option as had not been performing well and did not have the functionality required to make the necessary changes and in addition it was unlikely to be supported beyond October 2012. The council would continue to be reliant on payroll systems which are labour intensive. Therefore the Cloud technology option had been identified as the best option and the timeline for procurement and implementation was noted.
During discussion by committee, Councillor Brown asked when the migration of some systems to Oracle would commence and he sought further details with regard to Finance arrangements. Councillor Sheth sought confirmation that the HR back office staff reductions would total 15 and whether this would involve compulsory redundancies. He asked for further information in relation to councillor involvement and what measures were being taken to address concerns in relation to data storage. Councillor Mitchell Murray expressed concern about the risks of hacking for remotely stored data, particularly as more information could potentially be obtained. She also asked whether Project Athena could result in further staff losses and the emergence of ‘super directors’. Councillor Lorber enquired whether agreement with regard to standardisation had been made and was progress on this on track to be in place by September 2012. He sought further information with regard to providing the appropriate staff training and stated that if situations were to arise such as staff not being paid that this would take a lot of time to correct.
Councillor Colwill (Vice Chair in the Chair) asked what steps were in place to ensure that all local authorities in the programme were on target and what action was being taken in respect of governance arrangements.
Councillor Jones (Lead Member for Customers and Citizens) was also invited to address the committee and she asked whether Brent schools had expressed an interest in acquiring payroll and HR services through this programme.
In reply to the issues raised, Clive Heaphy advised that governance and procurement issues were discussed with programme partners on a weekly basis and each local authority had set up a Project Board to oversee the programme. Members noted that the programme was being monitored very closely by all partners. Clive Heaphy advised that migration of systems to Oracle Release 12 needed to be completed by September 2013 as this was when support for the existing Oracle system would cease. Consideration was taking place as to whether a local ‘hybrid’ Finance Oracle system could be introduced prior to full integration with the programme and it was noted that this would not add any significant costs. Clive Heaphy advised that two separate opinions had suggested that there would be a reduction of 15 back office related HR staff and HR would be conducting an informal consultation. Every effort was being made to avoid compulsory redundancies and it was even possible that some staff affected could be redeployed to another local authority as new job opportunities may be presented elsewhere. Councillor involvement was being encouraged and efforts were being made to arrange for the appropriate Lead Member of each local authority to meet with their Finance Director. With regard to data storage issues, Clive Heaphy advised that an off site location helped de-risk the holding and provides greater resilience. However, issues with regard to information sharing using Cloud technology did need to be resolved. The committee noted that Oracle was a large organisation that also worked with the Foreign and Commonwealth Office and the USA Government and was highly experienced in providing a secure data environment. In addition, the programme partners would be required to comply with local government legislation with regard to data protection.
Clive Heaphy advised that a lot of work had already being undertaken in respect of standardisation and this was being led by Tracey Connage in HR. There had already been agreement with regard to standardisation policy and work was being undertaken with regard to processes which were being codified. Training would be undertaken around two months prior to the introduction of the new system and the existing system would be operate in parallel during the first two months and this could be extended further if there were any problems. Members noted that it was only intended to migrate payroll data to the new HR system. Clive Heaphy advised that the new payroll system would be more competitive in terms of schools being interested in using it, although there were also private organisations that would continue to offer attractive contracts to schools.