Customer: Birmingham City Council
Submitted by: Harvard
In September 1997 the finance users in Birmingham City Council (BCC), had reached the limit of their capabilities with the existing general ledger. The system was inflexible and could not be adapted to meet the government’s new requirement for ‘Best Value’; an initiative to promote both improved service and reduce costs. The Finance Department therefore went out to tender for a new general ledger system, which would be the first strategic step towards a modern financial solution for the authority. This culminated in BCC purchasing SAP’s integrated R/3 solution.
Birmingham City Council is the largest Local Authority in Europe, with 54,000 employees, servicing a population of just over 1 million people. Being the largest authority, and therefore highly visible, BCC’s IT procedures and implementations are watched with interest by other authorities and advisory bodies, and in this case, as an example of how to address the Best Value initiative.
The new system requirements for BCC were actually quite narrow, but very detailed, in order to support such a large authority and its users’ requirements. The new financial system had to cope with 30 million transactions per year including over 1.5 million supplier invoices. The initial core requirement was to replace forty-four ledgers used across the Council into a single comprehensive chart of accounts in one general ledger. To achieve this, the General Ledger and Management Information System project, (GLAMIS), was established and managed by the Finance Department’s project manager, Steve Wise. GLAMIS was greeted enthusiastically by finance users – that is everyone in the council with budget responsibility. The resulting SAP solution provides both a financial and an information solution, which is user friendly and accessible to non-accountancy professionals.
The City Council’s procurement process required a specification to be put out to tender with companies proposing a solution and bidding for the project. Steve Wise, project manager, said: “We were looking for a system that had flexibility in reporting: for example, windows based functionality, with point and click drop down lists. The SAP solution won on technical, functional and cost grounds. It was the most technically efficient and flexible on the market and the implementation was an opportunity for us to change the way we work and plan for future developments.”
The solution bid was led by ITNET with support from PWC, who were responsible for the design and build of the General Ledger, and SAP who provided the software base for the project. BCC awarded the overall contract to ITNET on 1st July 1999 and launched the implementation on the following day. This coincided with a second project being undertaken by the Council, PARIS, Property And Repairs Information System. Tony Glew, head of Birmingham City Council’s IT function stated, “There was a good choice of systems but SAP gave us the solution we required from a business need at an affordable cost. SAP is the best solution all round for our requirements.”
The GLAMIS project had a very detailed road-map in place for its implementation which required the co-operation of all departments. Phase one of the installation concentrated on the accounting procedures in the Council, as this was the catalyst for investing in a new IT system. The IT project was outsourced to ITNET who also brought in PWC with SAP, to complete the whole team. The project team appointed within BCC had limited technical SAP expertise but worked well with the suppliers’ implementation team. The Council felt confident working with three large organisations, which all had good SAP experience and a close working relationship. One of the largest tasks for the project teams was the streamlining of the 44 old departmental ledgers and rationalising 11,000 accounting codes into one list for the new general ledger.
The original 44 ledgers ran on an old mainframe system, which had been installed nearly 20 years earlier. Access to the system was through dumb terminals and because of the complexity of the software and its reporting, the system was only used by 200 finance staff distributed across service departments. This meant that the other staff were totally reliant on the expert knowledge of these employees to produce reports and interpret the data. Consequently finance sections in departments were becoming a bottle-neck.
As new requirements had arisen over the years, software had been added with little or no true integration with existing systems. Reporting on a corporate basis required each department to send information to the Finance Department, for collation. This created a great deal of duplication across the authority. For example, to produce a monthly report for the entire council took six weeks elapsed time. As a result, the information on which key budgetary decisions were being made was always out of date and potentially inaccurate.
Whilst the old system was in place, people in finance sections were often focused on collating information and producing reports. They had little time to act in an advisory capacity for budget holders- which should have been a key element of their role.
During the implementation, BCC developed a comprehensive training and systems testing plan. Anne Hinks, training co-ordinator, was brought on board to train staff and test the system procedures. Her role later evolved into supporting the users and ensuring their requirements were included in the solution. As the lead trainer, Anne taught herself to use the system, created manuals and devised standards for testing. She describes the SAP system as “a piece of cake to use, the most simple IT system I have ever worked on. It is very user friendly and intuitive.” Anne designed ‘train the trainer’ courses to enable the devolution of system training, which included a competency test to ensure high standards were developed and maintained.
A full build and trial of the system took place over seven weeks. Each department had a two week period to test the system and carry out a dummy year end run. The trained staff were later assigned to train users of the live system. This first group of trainers now form a support team manning a helpdesk for other users in the Council. They also help identify future system requirements. The training process is ongoing, and an objective to establish 500 competent users with access to BCC’s general ledger by the end of March 2000 has been achieved, with access for 1600 users planned by April 2001.
Anne also worked closely with the implementation team to add any further configuration requirements or changes that were identified during training and testing. This is now managed through the help desk.
GLAMIS has significantly changed the role of the finance function – from being focused on ‘number crunching’ to now being the authority’s expert financial advisers to their customers, enabling them to carry out their job efficiently and quickly. They are adding real value to the council through their financial advice and this change has also created greater job satisfaction. Lesley Brockington, one of the Council’s designated finance officers, said: “The biggest potential for the new system is the way that we can support departments in their efforts to provide Best Value.” GLAMIS has also empowered departmental users to manage their budgets and expenditure. The reports are user friendly and do not require accounting skills, so users can interpret the output themselves. There is now only a single general ledger with access for budget holders across the whole authority.
Departments can also readily access the detail relating to any financial transactions. Faster reporting has empowered them to provide a better service to their customers, through more efficient management of budgets and expenditure. The system is also very flexible: searching for financial inaccuracies is much simpler, with a facility to drill down through reports to find errors and exceptions. Batch processes interfacing to other systems are now carried out on a daily not weekly basis, so that the financial information held on the general ledger is up-to-date. In summary therefore, investment in the SAP system is leading to large savings for the council because their finances can be managed more efficiently.
Sarah Wood, BCC Director of Finance and Performance, added: “SAP is performing well and doing what we expected. We are very happy with the implementation and are impressed with the solidity of the solution. The system has been installed smoothly and we have achieved our aim: the user population is extending and the benefits to the council are substantial and growing.”
The Council’s SAP Financial Development team is now putting together a business case, which is expected to be completed in April 2000, for the next phase of the project. Birmingham City Council’s long term vision is for the employees and the citizens of Birmingham to have access to financial and non-financial information when they want it and to provide excellent customer service, on a par with the very best organisations in the UK. Part of this vision will require the full integration of the PARIS system and the development and implementation of other elements of the SAP R/3 product. GLAMIS is the first step in taking the vision forward to achieve a fully integrated information organisation.