2. a. To note the successful completion of Phase 1 and the positive outcome of the business case review (paragraphs 14 21).

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1 19 September 2007 Council 8a To consider SAP Status Update Issue 1. This paper provides an update from the SAP Steering Group to Council on the status of the Strategic Applications Project. It covers: a review of the Phase 1 Business Case; the status and plans for Phase 2 and the plans for Phase 3. Recommendations 2. a. To note the successful completion of Phase 1 and the positive outcome of the business case review (paragraphs 14 21). b. To note the progress made on Phase 2 and the current plan to go live in November 2007 (paragraphs 22 26). c. To note the plans to carry out Phase 3 in 2008 (paragraphs 27 37). d. To receive the report of the Steering Group and endorse its conclusions (paragraphs 38 39): Further information i. That the project is very much on track to meet the overall objectives set out in the original business case. ii. That the project has provided the GMC with quality information systems. iii. That the project has positioned the GMC well to meet future requirements demanded by the overall strategy. 3. Neil Roberts nroberts@gmc-uk.org Dave Anson danson@gmc-uk.org

2 Background 4. The original Strategic Applications Project (SAP) business case was approved by the Resources Committee in December The business case covered a plan to roll out new systems to all parts of the GMC. 5. There were three types of benefit identified in the original business case: a. Non-quantifiable benefits based on quality and service improvements. b. The provision of an appropriate IT platform to support the GMC s needs through a period of complex change. c. Quantifiable savings based on improvements in resource utilisation and reduced expenditure with third parties. 6. The first two types of benefit were considered to be more important to the GMC than the financial return on investment. In essence the GMC needed to take forward its technology platform to be able to support its business strategy and plan. The financial aspect was nevertheless considered important in ensuring that the project was progressed in a cost effective way and that thought was put into how the technology could be used to reduce costs and better utilise resources. 7. The anticipated saving in the business case for Phase 1, Fitness to Practise, was 450,000 per annum from improved resource utilisation and elimination of costs associated with the existing IT systems. The costs for Phase 1 were finalised at 4.55 million, which is a variance of 7% when compared with the original business case. 8. A review of the Phase 1 business case has now been completed. This took place in April 2007, over one year after the implementation. The review looked at the outcome against all the types of benefit listed in paragraph 5. The results of the review are discussed later in this paper. 9. The anticipated saving in the business case for Phase 2, Registration, was 1.55 million per annum from improved resource utilisation and elimination of costs associated with the existing IT systems. 10. Phase 2 is due to go live towards the end of this year. The actual date will be determined once the testing stage has been completed but the current planning assumption is for a go-live in the middle of November The costs for Phase 2 were budgeted to be 2.33 million as per the 2004 business case. Phase 3 has subsequently been re-forecasted at 2.75 million. There are two reasons for the increase: a. The complexity of the proposed solution following completion of the functional specification. 2

3 b. The move of the implementation date from mid-october to mid-november to accommodate the introduction of the New Registration Framework in October All changes to the costs of Phase 2 have been approved by the Resources Committee. 12. Phase 3 is scheduled for 2008 and provides for the implementation of a single system to support Finance, Purchasing, HR and Facilities. Detailed plans and a business case have not yet been developed for Phase 3, the work being scheduled for the first quarter of Finally, to recap the governance arrangements: under these arrangements the Resources Committee is responsible for approving the project s expenditure. However, there are two other bodies with key responsibilities: Discussion a. The Steering Group, chaired by Ann Robinson and comprising five Council Members, is responsible for overseeing the project on behalf of the Council, specifically ensuring: that the project proceeds in line with the GMC s overall strategy, that risk is managed effectively and that the project meets overall budget, schedule and performance targets. b. The Project Board, chaired by Finlay Scott and comprising the GMC s Directors, the Assistant Director for IS and the Head of Strategic Systems, is responsible for making operational decisions and resourcing the project. Phase 1 Fitness to Practise 14. A detailed review has been carried out of progress following the Phase 1 Fitness to Practise implementation. This work has been managed by Robert Loughlin, Head of Change Management for the Standards and Fitness to Practise Directorate and uses the original business case as its baseline. The review paints a very positive picture. 15. It is clear from the analysis that efficiency and service have improved since Phase 1 went live and it is also clear that the new system has made a significant contribution to this. 16. The analysis provides an extremely positive review of the non-quantifiable benefits that have resulted from the SAP. There are significant and important improvements in terms of: quality of service; reduced risk associated with business processes; improved decision making; and improvements in work management and team working. 17. Based on the experience of using the system, and modifying it when needed, it is clear that the system has the flexibility and capability to adapt to the changing needs of the GMC in Fitness to Practise. This is important in that it leads to a high 3

4 level of confidence that the system will readily be able to support further fitness to practise reforms and other requirements arising from the recent White Paper. 18. In assessing the quantifiable benefits, one of the challenges of the analysis was to determine how much of the efficiency improvements in Fitness to Practise to attribute to the SAP, as opposed to other improvement initiatives. As a result, the review takes a conservative view of the benefits attributable to SAP. 19. The savings achieved to date have been determined to be about 360,000 per annum with an additional 60,000 forecasted to be achieved by January This total of 420,000 compares with the figure of 450,000 per annum in the business case. 20. It should be noted that all these benefits were built into the budgets for A final point worth making regarding the Phase 1 implementation is the quality of the technical implementation. The system has consistently run at extremely high levels of availability and performance, significantly exceeding the 99.9% availability target agreed by the Resources Committee earlier this year. This was a key objective of the project and is extremely important given the reliance the GMC now has on IT systems. Recommendation: To note the success of Phase 1 and the positive outcome of the business case review. Phase 2 Registration 22. Phase 2 is currently scheduled to go live in mid-november 2007 with the system being implemented for all Registration processes, including internet systems such as MyGMC and LRMP. This will represent a significant milestone for the GMC with the two main operational functions of the GMC, Fitness to Practise and Registration, using the same system for the first time. 23. All streams of work are progressing well and a large part of the testing has already been completed successfully. Once testing has been completed, planned to be in late September 2007, the implementation date will be finalised. 24. Given that the business case was written in 2004 it was deemed prudent to review the Phase 2 aspect of the business case in the context of the current Registration organisation and processes. This work has been managed by Sunil Kapur, Head of Business Planning in the Registration and Resources Directorate. 25. The conclusion is that significant non-quantifiable benefits are anticipated to result from the Phase 2 implementation. These include: improved information sharing and decision making; improved service levels; improved workload and operational management and improvements in the management and quality of the fees process. Some of the improvements, such as those to the fees process, were not envisaged in the original business case. 4

5 26. As a result of the review the financial benefits forecast has been increased from 1.5 million to 1.8 million. The savings in Phase 2 are much higher than in Phase 1 principally as a result of: (a) increased outsourcing of document production and despatch and (b) the significant savings in IT expenditure as a result of the termination of contracts with third parties who support and develop the current systems. Recommendation: To note the progress made on Phase 2 and the current plan to go live in November Other SAP developments 27. While the main focus of the project has been on Phases 1 and 2, the team has also been able to deliver other Strategic Application Project systems to the GMC leading to additional benefits. These are based on the use of Livelink which was introduced in Phase 1 as the electronic document repository for the Siebel operational system. The benefits of this have been included in the benefits for FPD and Registrations discussed above. However, the IS strategy also included the use of Livelink (a) as an electronic document management system for activities not covered by the Siebel operational system such as: managing policy documents and processes; correspondence with third parties and commercial contracts and (b) as a tool to manage and publish intranet and internet content. We have live implementations of both (a), having rolled Livelink out to about 100 users already for document management and (b), having introduced Livelink to manage the intranet. Both have been successful and while many of the benefits are qualitative in terms of quality and service improvements we have been able to estimate efficiency improvements totalling 105,000 per annum from Financial Summary of Phases 1 and As the above discussion indicates, the level of benefits that have already been achieved, and those that are expected to be achieved for Phases 1 and 2, compare well with those envisaged in the original business case. The original business case anticipated annual peak benefits of just over 2 million per annum. The current forecast is for peak benefits of about 2.57 million per annum, an improvement of 570, However, the timeline to achieve a return on the investment is longer than originally envisaged. There are two reasons for this: a. The costs for Phase 1 and Phase 2 are higher than in the original business case ( 7.3 million v 6.5 million). b. When Phase 2 completes at the end of 2007, it will have taken longer to complete Phases 1 and 2 than originally anticipated. 30. The reasons for the variance in cost and timeline have been documented in previous papers and approved by the Project Board and Resources Committee. 5

6 31. When comparing the likely costs for Phases 1 and 2 with the benefits already achieved and those still anticipated, the projected break-even date for payback on the investment will be around the middle of While this is very positive purely from a financial perspective it should be emphasised that this reflects good practice in the project s methodology rather than a key justification for the project. The Phase 1 benefits review and the revision of the anticipated benefits for Phase 2 indicate that the primary benefits of: quality, service improvement and providing a technical platform for change, have been and will continue to be achieved. Phase 3: Finance, Procurement, HR and Facilities 33. Detailed plans have not yet been developed for Phase 3. This phase will deliver a single off-the-shelf system to support finance, HR, purchasing and facilities. 34. It is planned that the requirements analysis for Phase 3 will be carried out during the first three months of 2008, leading to the production of detailed business requirements, a business case and the selection of appropriate software. 35. The business case will be presented to the Resources Committee for approval around the end of the first quarter of The Phase 3 implementation is expected to start early in quarter two of 2008 with implementation scheduled towards the end of There are two key drivers for Phase 3: a. The current Finance system is outdated. As well as providing lower levels of resilience and performance than other GMC systems, this is a constraint to future development of finance and related processes. b. Significant benefits arise from having a fully integrated finance, procurement and HR system; providing, for example, a single master list of employee details. The current disparate systems lead to duplication of effort, data quality issues and disjointed processes. Recommendation: To note the plans to carry out Phase 3 in Steering Group 38. Council charged the Steering Group with overseeing the project in terms of GMC strategy, risk management, budget and schedule. The Steering Group last met on 3 July 2007 and concluded that it would be appropriate for Council to be briefed on the status of the project. The Group concluded that the project was making excellent progress and is very much on track to meet the objectives set out in the original business case. 39. The Steering Group also wanted to make Council aware that the project has positioned the GMC extremely well to meet future requirements, particularly in 6

7 relation to the White Paper work streams. This is as a result of the proven quality and flexibility of the system and the detailed understanding of work processes that have been built up through the project s well-documented analysis work. Recommendation: To receive the report of the Steering Group and endorse its conclusions: a. That the project is very much on track to meet the overall objectives set out in the original business case. b. That the project has provided the GMC with quality information systems. c. That the project has positioned the GMC well to meet future requirements demanded by the overall strategy. Resource implications 40. None. Equality 41. There are no equality implications directly arising from this paper. 7