The State Government’s strategy of centralising ‘back office’ activities into shared service centres is creating unprecedented opportunities for the information technology sector.
The State Government’s strategy of centralising ‘back office’ activities into shared service centres is creating unprecedented opportunities for the information technology sector.
The latest to benefit from the strategy are Oracle and its local partner, ASG Group, which last week finalised negotiations on a 10-year, $66.8 million contract.
The Government has issued tenders for two further multi-million dollar projects that collectively will be worth even more than the Oracle contract.
Oracle and ASG will supply business systems to the Government’s four shared service centres, which will provide finance, payroll and human resources services to about 110 government agencies.
Ron Mance, executive director shared services in the Department of Premier and Cabinet, said the Government had recently issued a managed services tender, which would be similar in value to the $67 million Oracle contract.
The winner of the managed services tender will be responsible for ‘application management support’ and communication following implementation of the Oracle solution.
Also this week, Mr Mance said, the Government would release a systems integration tender, which would result in the appointment of a panel of systems integration experts.
Oracle and ASG were named as preferred tenderers last October and finally completed negotiations last week, nearly three months later than expected.
They will now enter a three-month design phase, followed by building and testing of their business systems solution.
The design phase will help to define the scope of contracts to be negotiated with two independent product vendors.
Alphawest has been named as preferred tenderer for an electronic document and records management system, while Information Builders is preferred tenderer for a business intelligence system.
Mr Mance said the Government would not proceed with a rostering system, even though Total Care Technologies had been named as preferred tenderer.
Treasurer Eric Ripper said the shared services project was expected to generate annual savings of $50 million from 2007-08.
It would enable the Government to replace numerous software systems currently in use with standard systems across the four shared service centres.
An exception to the rule is the police department, which was already implementing a new, integrated system when the project commenced.
Mr Mance said the police department was “to some extent ahead of the sector” and would be expected to reach the same efficiency targets as the rest of the public sector.
ASG managing director Geoff Lewis said the contract would provide a significant boost to the listed company’s revenues starting in the 2005-06 financial year.
“We believe this is an important milestone in the growth of ASG and is a gratifying vote of confidence in our service offering and technical capability,” he said.
Mr Lewis also acknowledged that ASG had already needed to bear the cost of recruiting a substantial number of extra staff, but did not specify the impact of the extra costs.
