Purpose

The Council is at an advanced stage of its
implementation programme for Oracle Fusion and continues to review
all supporting elements to ensure successful delivery. This
coincides with the conclusion of the initial 5-year appointment of
Oracle, which is due to expire in October 2024, and evaluation of
whether to exercise the 2-year option to extend.

A review of requirements to identify the scope and breadth of
Oracle Fusion system users, licences and their required access has
been undertaken. Negotiations were had with Oracle to identify a
menu of licence options to meet the Council’s requirements to
determine whether the extension option be exercised.

During licence negotiations an opportunity arose to secure
commercial terms that will deliver value for money. To take
advantage of the terms offered, the Council is required to reach a
decision on this option prior to 31st May 2024 from which point
licence arrangements from Oracle would change and less commercially
advantageous terms will take effect from October should the option
to extend be taken later.

The licence proposal from Oracle enables Council, Sandwell
Childrens Trust (SCT) and school users to access the full
functionality of the system during which time further process
improvements will be investigated and is based on sufficient
licences for each component to function effectively. A price cap
has been included at a maximum of 8% to protect the Council from
future excessive price increases from year 3.

The current contractual licence costs up to October 2024 are
£836K and will automatically increase to £920K (10%
increase). This included £700k of license costs plus
additional essential Learning Modules totalling £136k. The
current contract still does not cover all our projected licence
requirements though, and without the negotiated process would
result in annual costs of £1.7M based upon revised licence
numbers.

By signing the agreement and exercising the 2-year option to extend
prior to 31 May 2024, in addition to the beneficial pricing
achieved, further savings will be made during the period July 2024
– October 2024. We have agreed that increased licence numbers
and functionality can be used from the July go-live until the
October contract start date resulting in savings of £162K per
month. Over the 3.5 months this equates to £567K.

All licences costs have either remained constant or reduced from
the 2019 commercial agreement despite a contractual commitment of a
10% increase. The final licence costs are because of increased
licence numbers and additional functionality.

The original Cabinet decision granted authority for an extension of
up to 2-years but limited the annual value to £700,000.
Financial resources for the revised licence costs covering the
2-year extension period are provided for within the implementation
programme.

Content

For the reasons set out, it is recommended
that -

(1) Approval be given to exercise the option to extend the existing
Oracle Fusion Licence agreement for 2-years commencing October 2024
in accordance with Cabinet decision 119/19 (Appointment of EBS
System Supplier and Implementation Partner), subject to the value
of the contract being varied to an amount of £1,996,061.66
over the duration of the 2 years extension. Any subsequent
requirements for additional modules, functionality or licence
permissions to be assessed based on value and determined in
accordance with relevant decision-making procedures;

(2) Authority be granted the Executive Director for Finance &
Transformation in consultation with the Monitoring Officer and
Assistant Director for Legal & Assurance to enter into all
necessary contractual and financial agreements on or before 31 May
2024 with a contract start date of 31 October 2024.