Independent Report shows SAP Payback in 18 months

Successful modernisation of Council Services

Independent report identifies Logica helping to enable a 72 per cent Return on Investment on IT systems at London Borough of Waltham Forest.

An IT system designed to join up services across the Council and improve customer care is literally paying for itself, according to a recent independent report by a leading IT analyst. The new system, SAP, will save the the Council 72% of the original cost of purchasing and installing it in its first five years. This will be achieved through more efficient working and is equivalent to £5.3 million.

The independent report, highlighting the benefits of implementing a local government IT system for the 21st century was launched on 11 October by industry analyst firm, IDC [external]. The study, which reviews the return on investment (ROI) of a business transformation initiative at the London Borough of Waltham Forest, delivered by Logica, identifies that the council has received a payback from the investment within 18 months of “go-live”.

Net benefits of over £5.3 million

The report further notes that the system, an Enterprise Resource Planning (ERP) solution implemented across the council’s back office operations, achieved an ROI of 72 per cent over five years, translating to net benefits of over £5.3 million. This has enabled the council to make rapid progress in the use of resources league table, moving from 137th to 27th place nationwide and 4th position within London.

Business Benefits

The IDC study further identifies that the system, built on SAP and managed by Logica, has delivered three key areas of business benefits to Waltham Forest:

Real-time access to business information
The time to produce an end-of-month report has been reduced from three days to five minutes and the budget reporting time has been halved. Payroll costs have been reduced by 30 per cent since inception.
Productivity improvements
The move from paper documentation to electronic workflow management has increased productivity in the finance and procurement departments. Previously, end-of-month reporting produced reams of paper equivalent to 24 boxes, which took two days to collate.
Value for money
In addition to the payroll savings and net benefits achieved of over £5 million, the integrated solution significantly improves cash flow for the council. Specially negotiated payment terms and more efficient debt collection, has reduced the council’s need to borrow funds and reduced borrowing by £6 million in the last 12 months.

Business Transformation Strategy

Prior to the implementation of the SAP ERP system, Waltham Forest was running on a highly fragmented computing architecture with 20 disparate IT systems. There was a great need for a single, integrated system to support HR, payroll, procurement, finance, CRM and estate management.

Chan Badrinath, Executive Director of Corporate Services, London Borough of Waltham Forest, said: “This initiative has been part of a major business transformation strategy across the council, pivotal to us meeting our Gershon Efficiency savings objectives. Delivered on time and to budget, the programme has been a true partnership between Logica and Waltham Forest. This has enabled us to realise significant business and operational benefits, acknowledging us as a borough that manages its resources in the most efficient and effective way possible.”

Shaun Collings, Business Development Director (Government), at Logica, said: “Logica is proud to help deliver Waltham Forest value for money in such a large-scale, mission critical government initiative. This initiative makes a major contribution towards modernising local government services for the 21st century, helping Waltham Forest transform itself into a local authority of stature that provides the best possible service to the public. The council is now in an excellent position to deliver the highest level of services to its citizens.”

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