Reason for the decision:
The Council’s support from Oracle for its E-Business Suite
(EBS) expires on 5 April 2021. EBS is used for critical business
processes in finance, human resources and procurement, including
payroll and accounts payable. Oracle will stop providing its
“Premier Support” for the version of EBS the Council
uses in December 2021. Should the Council wish to retain this
support from Oracle it would have to make a long-term commitment to
them and undertake a programme of expensive and disruptive
upgrades. Third-party support in terms of service levels is
directly comparable to that from Oracle, but significantly lower
cost.
Background: Provide brief additional context
Rimini Street is a well-established and proven provider of support
for Oracle EBS (including the Local Government sector). Contracting
for support from Rimini Street will secure service continuity for
the foreseeable future and a significant financial saving. It will
also give the Council time to consider its requirements for
replacing EBS in the context of its strategic reset and financial
constraints if that is necessary.
The Council’s EBS is hosted “on-premise” in the
data centre at Sessions House. Arrangements for the close and
migration of the data centre are being considered separately and
are not affected by the provision of EBS support and vice versa.
Third-party support can be provided if EBS is hosted on an
Infrastructure-as-a-Services (IaaS) solution for example, without
incurring additional cost relative to on-premise.
Options (other options considered but discarded):
Three options were considered. The first and preferred option is to
procure third-party support as a direct replacement of the support
provided by Oracle. A critical difference to support from Oracle is
that it removes the option to upgrade to future versions of EBS
without purchasing new licenses from Oracle, but does nonetheless
provide the important updates for security, tax regulations
etc.
Continuing with Oracle’s Premier Support for an
“on-premise” instance beyond December 2021 requires the
Council to upgrade to a new version (12.2.8). This is the last
significant upgrade of EBS planned by Oracle. This option was
discounted because it requires a fundamental and costly change in
middleware (the software that lies between the operating system and
the applications running on it), with limited opportunity to
achieve functional and feature improvement. Ongoing costs will be
significantly higher than those for third-party support.
Adopting a new Software-as-a-Service (SaaS) alternative to EBS was
also considered; often referred to as a “cloud-based
solution”. Transition to cloud, even an Oracle Cloud, is a
substantial undertaking. The Council would be forced to
“adopt” different business processes because SaaS offer
little opportunity to “adapt” the software to the way
the Council works. Whilst this may be desirable in the longer-term
it is considered too disruptive in the near term. The associated
implementation costs will run to millions of pounds and the ongoing
costs are higher than those for third-party support. Given the
context of the Council’s strategic reset and financial
constraints this option was rejected but will be revisited as the
strategic reset progresses.
Decision type: Key
Reason Key: Expenditure or savings of more than £1m;
Decision status: Recommendations Approved
Division affected: (All Division);
Notice of proposed decision first published: 07/10/2020
Decision due: Not before 5th Nov 2020 by Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services
Reason: In order that the proposed decision can be published for a minimum of 28 days, in accordance with statutory requirements
Lead member: Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services
Department: Strategic & Corporate Services
Contact: Vincent Godfrey, Strategic Commissioner Tel: 03000 419045 Email: vincent.godfrey@kent.gov.uk.
Consultees
The Policy and Resources Cabinet Committee
considered and noted the preferred option to use third-party
support as an Exempt Item (no. 230) on 29 July 2020 (link
below).
https://democracy.kent.gov.uk/ieListDocuments.aspx?CId=750&MId=8527
Financial implications: The term of the contract will be November 2020 to April 2021 with options to extend for up to two further years in one-year increments. The value of the contract is £491,207 with the options to extend priced at £515,767 and £541,555 respectively (£1,548,529 in total). In the 2020/21 finance year the cost of Oracle support for EBS was £1,285,745. This compares to the cost of £491,207 with Rimini Street. This amount is though payable to Rimini Street in the 2020 calendar year representing an additional cost in the 2020/21 financial year (it is budgeted). In the 2021/22 financial year the Council will not incur any support costs for EBS; effectively making a saving of at least £1,285,745 relative to what it would have expected to pay based on the cost of Oracle Support in 20/21.
Legal implications: The Council has selected Rimini Street through the Government’s Digital Marketplace (“G-Cloud”). General Counsel is satisfied that the appropriate terms are in place with Rimini Street and have been reviewed by external lawyers (Burges Salmon). The proposed contract with Rimini Street contains the appropriate provisions for compliance with the General Data Protection Regulations as they apply in the UK, tailored by the Data Protection Act 2018. Rimini Street will not have access to or collect information about individuals as a result of this contract.
Equalities implications: None given no change to the EBS system or impact on staff.