Government's Unity Cluster embarks on £366m ERP cloud transformation

The Government's Unity Cluster, comprising HMRC, DfT and MHCLG, has initiated a significant ERP cloud transformation, with contracts totalling £366 million aiming to modernise and unify back-office functions across these departments.

HMRC, leading the Unity Cluster, has signed a £246 million, 10-year agreement with SAP to implement the RISE with SAP platform.

This SaaS solution will centralise finance, procurement, HR, and payroll services, replacing legacy SAP ERP systems nearing the end of their support lifecycle.

In parallel, Deloitte has been appointed as the technical delivery partner under a five-year contract worth up to £120 million. Deloitte will oversee the systems integration necessary for this comprehensive digital transformation.

The Unity Cluster aims to standardise processes across the three departments, enhancing efficiency and data-driven decision-making. By migrating to a unified cloud-based ERP system, the cluster anticipates:

• Cost Savings: Collaborative migration is projected to save approximately £90 million compared to independent departmental upgrades.

• Operational Benefits: The revamped shared services are expected to deliver benefits totaling £585 million over 15 years, providing a substantial return on investment.

• Enhanced Service Delivery: The new platform will streamline administrative processes, allowing civil servants to focus more on core responsibilities.

The transition to the new ERP system is scheduled to be completed before SAP ends mainstream support for the current ECC 6.0 platform in 2027. However, the Infrastructure and Projects Authority (IPA) has previously rated the Unity Programme as "red," indicating concerns about its deliverability due to outstanding design decisions and resource constraints.

"This partnership is a real demonstration of the breadth of our digital capabilities," said Leila Romane, Managing Director of SAP UKI, emphasising the transformative nature of the project. "We are delivering complete end-to-end ERP transformation that will positively impact the work of 100,000 civil servants across three major government departments."

The Unity Cluster's ERP cloud transformation aligns with the Government's broader digital strategy to enhance public sector efficiency and service delivery. Successful implementation could serve as a model for other departments seeking to modernise their operations through cloud technologies.