Best Practices CHAMPS and Service Birmingham Key To City's Corporate Services Transformation Â " A ProveIT Case Study

Best Practices: CHAMPS and Service
www.government-
Birmingham Key to City's Corporate

Services Transformation — A ProveIT
Case Study
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European Government Technology Decision Support
MARKET OVERVIEW #GITD03R9
Jan Duffy
GOVERNMENT INSIGHTS OPINION

Birmingham City Council's vision for the future of the city described
in the report Moving Birmingham Forward published in 2005 required
service delivery at an extraordinary level of excellence. Achieving this
and responding to the business needs led the council to launch a far-
reaching business transformation program. Key to the successful
implementation of the business transformation program was the
formation of Service Birmingham, created as a public-private
partnership between Birmingham City Council and Capita Group PLC,
along with several other partner organizations. A 10-year, £475
million contract to deliver IT transformation was signed in April 2006.
Some of the achievements described in this case study are:
● Corporate Services Transformation (CST) was successfully
implemented. CST is considered to be integral to the council's
efforts to save money and invest in areas that would enable better
services. Implementation of CST involved a change to a shared-
service delivery model and implementation of Voyager, using
SAP's software suite to support the integration of the council's
financial, procurement, and operational performance management
processes.
● Birmingham City Council achieved the benefits predicted for
the implementation of CST. The Business Transformation
Program (BTP), the Strategic Business Partnership, and
implementation of CST were all based on achieving cashable
insights.com
benefits. CST is on track to achieve £860 million in benefits over

10 years, of which £518 million will be cashable.
● Service Birmingham successfully replaced existing ICT service
delivery mechanisms and provided business transformation
experience and delivery services. Council employees work
alongside Service Birmingham employees in a seamless team
environment; all parties have a vested interest in the success of all
other parties. The CST implementation was guided using
CHAMPS, a new project management process that was developed
jointly by Birmingham City Council with Service Birmingham to
support end-to-end transformation initiatives in the public sector.
December 2009, Government Insights #GITD03R9

Government Insights: European Government Technology Decision Support: Market Overview
TABLE OF CONTENTS
In This Report 1
Methodology ............................................................................................................................................. 1
S i t u a t i o n O ve r vi ew 2
Birmingham: The City ............................................................................................................................... 2
The Best Practices.................................................................................................................................... 6
Future Outlook 36
Essential Guidance 36
Actions to Consider................................................................................................................................... 36
Learn More 37
Related Research ..................................................................................................................................... 37
Relevant Reading ..................................................................................................................................... 38
#GITD03R9 ©2009 Government Insights, an IDC Company

LIST OF TABLES
P
1 Functional Scope of CST ............................................................................................................. 18
2 Delivery of Core CST Implementation .......................................................................................... 21
3 Key Cultural Change Issues......................................................................................................... 22
©2009 Government Insights, an IDC Company #GITD03R9

LIST OF FIGURES
P
1 CHAMPS Phased Approach ........................................................................................................ 20
2 ROI Impact of CST....................................................................................................................... 26
3 Risk Impact of CST ...................................................................................................................... 27
4 Transformation Impact of CST ..................................................................................................... 28
5 Innovation Impact of CST............................................................................................................. 29
#GITD03R9 ©2009 Government Insights, an IDC Company

IN THIS REPORT
This ProveIT case study explores the following discrete but heavily
interrelated elements of Birmingham City Council's early
transformation achievements:
● Formation of Service Birmingham to replace existing ICT service

delivery mechanisms and provide business transformation
experience and delivery services
● Adoption of BTP as the overarching, holistic plan to support and

facilitate Birmingham City Council's vision for the future of the
city — Moving Birmingham Forward — published in 2005
● Successful implementation of CST as the first of nine work

streams in the overall BTP
This report focuses primarily on the formation of Service Birmingham

and the implementation of CST, including the use of SAP's suite of
software applications to support integration of the council's financial
and operational performance management processes into a single tool
to deliver a step change in performance and more effective decision-
making.
Methodology
In a ProveIT case study, IDC Government Insights analysts examine a

stated business issue in a government organization and the IT
approach taken to address it. The study then specifically analyzes the
ROI, risk, transformation, and innovation involved in the adoption of
the solution. ROI looks at the operational costs and business value of
the solution. Risk covers the situational complexity of the technology
and the execution of the solution. Transformation covers the impact on
the delivery of the government or government department's mission
and business processes. Innovation involves leveraging best practices
for scalability, repeatability, and replicability.
This ProveIT case study explores the discrete but heavily interrelated
elements of Birmingham City Council's early transformation
achievements. This report focuses primarily on the formation of
Service Birmingham and the implementation of CST including the use
of SAP's suite of software applications to support integration of the
council's financial and operational performance management processes
into a single tool to deliver a step change in performance and more
effective decision-making.
IDC Government Insights would like to thank the following people

from Birmingham City Council for taking the time to provide input to
this ProveIT case study: Karen Bridges, head of business change
development; Glyn Evans, corporate director of business change;
Rachel Musson, assistant director of accountancy service; Jean Robb,
©2009 Government Insights, an IDC Company #GITD03R9 Page 1

assistant director of shared services; and Jackie Woollam, head of
business change effectiveness, business change.
SITUATION OVERVIEW
Birmingham: The City
Birmingham is the U.K.'s second-largest city, with around 1 million

residents and covering 267.8 square kilometers. The population
continues to grow and is projected to reach more than 1.1 million by
2026. The population is young and culturally diverse, with a higher
proportion of residents under than 35 years than the English average.
Birmingham provides over 20% of the jobs in the West Midlands and
every day nearly 200,000 people from the larger Birmingham
metropolitan area (population more than 2.5 million) commute to their
work from outside the city.
Birmingham's economic prosperity was originally built on

manufacturing, but economic changes in the 1970s and 1980s led to a
massive loss of manufacturing business and jobs. Manufacturing
remains important to the city, but Birmingham has also developed a
substantial business and financial services sector through the
transformation and growth of the city center.
Moving Birmingham Forward

In 2005, the Birmingham City Council published its vision for the
future of the city in a report entitled Moving Birmingham Forward.
The vision of Birmingham is for it to be a city known nationally and
internationally as a place to invest and visit, live, and work.
Birmingham is a growing city, where more and more people would
want to live and work, a smart city that values knowledge and uses it
creatively.
The council recognized that the vision would be realized in a world in

which public services would need to be more suited to the
requirements and preferences of service users. Users of public services
would have higher expectations of services and want better
information about standards and performance.
The council's vision committed to making it simpler for people to

contact public services and to get information and advice. New
information technologies would be exploited for the benefit of the city,
bringing together private, public, and voluntary sector organizations.
Through the vision, the council committed to achieving a standard of

public service that would be the highest in the U.K. Partnerships, both
within the public sector and among the public sector, private, and
voluntary organizations, would become important and public services
would increasingly be delivered by partner organizations.
Page 2 #GITD03R9 ©2009 Government Insights, an IDC Company

Supporting Birmingham City Council's vision for the future of the city
required service delivery at an extraordinary level of excellence.
Achieving this and responding to the above business needs required
the council to transform service delivery. The council needed to make
a leap forward in the way it operated in order to become best in class.
Processes needed to be faster, more accurate, responsive to customers'
needs, and cheaper to deliver, making best use of modern technology.
Business Transformation Vision

"If the public sector is to rise to the challenge of
improving services in the face of growing demand and
decreasing central government assistance, councils
must adopt a policy of radical transformation rather
than piecemeal change. The easy pickings of efficiency
have now been harvested and it's only by a deeper
commitment to change that we can all deliver the
bigger savings we must make."
Paul Tilsley
Deputy Leader of Birmingham City Council
The council was committed to making better use of existing resources,

relieving taxpayers of increasing pressure to pay more, and envisaged
a coordinated 10-year business change program that would achieve
step changes in service delivery. The council generally referred to this
as business transformation.
When deciding on the transformational approach, it was important for

council to consider potential constraints and challenges (i.e.,
availability of relevant skills and experience, managerial capacity to
support the change process, and existing organizational models). It
was also important to consider the best use of ICT.
The multiplicity of traditional contractual arrangements covering ICT

hardware, software, and services were difficult to manage and
hampered the council's ability to leverage the investments being made
in ICT. Many of these contracts were due to expire in December 2005
and the council was legally obliged to retender them because the value
exceeded £100,000.
Formation of Business Transformation Strategic

Partnership
The Birmingham Council planned to launch the most ambitious and
far-reaching business transformation program of its kind. The program
was designed to transform the way the council delivers services to its
citizens and covered all aspects of the council's interaction with people
who live, learn, and work in or visit the city. Successful transformation
would require redesigned business processes supported by a robust
integrated ICT infrastructure.

The council considered the following options to deliver these services:
● Renewal of existing ICT contracts. The council had determined

that it was not receiving full value from the existing ICT contracts.
They were not delivering an integrated ICT service and a more
"joined-up" service might be better. Fortuitously, many of the
existing ICT contacts were due for renewal.
● An ICT-only partnership. This would deliver an integrated ICT

service, but was considered unlikely to deliver the return on
investment (ROI) that could be made through business
transformation supported by ICT.
● Ad hoc consultancy to support business transformation. This

would help deliver the business transformation agenda but would
not provide a long-term relationship with a partner that understood
the needs of the council and would be committed to delivering
successful outcomes. It would also imply a different means of
delivery for ICT that may not support business transformation to
the fullest extent.
● A partnership including business transformation and ICT on a

non-exclusive basis. This option would present an opportunity for
the council to procure an integrated set of services and would
support the delivery of business transformation, providing
integrated ICT services that fully support the transformation
agenda.
The council recognized that because of the size and complexity of the
initiative, moving the transformation agenda forward would benefit
from the formation of a partnership whereby both partners had a
vested interest in the overall outcome. Combining the business
transformation and ICT services in one contract would ensure a
cohesive approach and encourage suppliers to be flexible and
adaptable to the changing needs of the council. The services to be
included in the partnership would be negotiated as part of the contract
negotiations, but would be based on provision of the following two
groups of services:
● ICT services
● Business transformation services

S c ope of ICT S er vi c e s
The council agreed that any decision to transfer a service to the
partnership should be supported by a solid business case. The potential
scope included all ICT services to all directorates and schools as well
as other service areas that operated as a traded service. Some areas
would be transferred to the successful bidder to manage from day one.
The remainder would be assessed at a later date. The total value of the
contracts was about £30 million. A rough split for Day 1 indicated
that:
● £16 million in services would be transferred to the partnership.
● £10 million in services would be available to the partner on a non-

exclusive basis.
● £24 million in services would be excluded from the partnership.
Sc ope of Bu s in ess T ra nsf or ma tion Ser vic es

The following nine programs were established under a single
overarching BTP seeking to realize £1.6 billion of cashable benefits
over 10 years:
● CST: Implementing tools and procedures to help staff work more

effectively and improve delivery, focused on finance, procurement,
and management information
● Customer First: Helping the council to provide world-class

standards of customer service, aiming to increase the customer
satisfaction rating to a minimum of 85%
● Excellence in People Management: Transforming the way the

council supports employees and managers, underpinning future
ways of working
● Excellence in Information Management: Extending the value of

the council's information
● Working for the Future: Entailing 21st century office

accommodation and new ways of working
● Adults and Communities Transformation: Improving the way

social care is provided for citizens
● Children, Young People and Families Transformation:

Improving the health and well-being of children in Birmingham
● Housing Services Transformation: Delivering more efficient,

customer-focused housing services that meet the criteria set out by
the audit commission, delivering real improvements for customers
● Environment: Helping to deliver the council's commitment to

reducing the city's carbon footprint by 60% by 2026

The Best Practices
The council developed and adopted an overarching, holistic business

transformation plan to support and facilitate the Moving Birmingham
Forward agenda. Key to the successful implementation of the business
transformation plan was the formation of Service Birmingham to
replace existing ICT service delivery mechanisms and provide
business transformation experience and delivery services. Service
Birmingham was critical to the successful completion of CST (i.e.,
procurement, finance, and performance management transformation
through back-office shared services). Service Birmingham was critical
to the development of a shared services center that would also support
the transformation of front-office services. This report focuses
primarily on the formation of Service Birmingham and the
implementation of CST.
It is important to keep in mind that CST is one of nine work streams

defined by the BTP and was the first to be implemented. A number of
best practices surfaced and many lessons were learned during the CST
implementation. These lessons will be valuable for Birmingham as it
proceeds with implementing other work streams and also valuable for
other governments and government agencies that are embarking on
transformation initiatives.
Formation of Service Birmingham

On February 4, 2004, the cabinet agreed to place a notice in the
Official Journal of the European Union (OJEU) inviting tenders for the
proposed strategic partnership and to send a prequalification
questionnaire (PQQ) and invitation to submit an outline proposal
(ISOP) to all interested companies. A shortlist of these companies
would be issued with an invitation to negotiate (ITN).
Ten tenders were received in response to the OJEU notice. Following a

detailed evaluation and approval by the Strategic Partnership Steering
Group, a shortlist of four consortia/alliances (bidders) was developed.
I n vit at i on t o Neg ot iat e

The ITN was developed based on the principle of establishing a long-
term partnership between the council and the successful bidder.
Innovative ways of service delivery were actively sought on the
following basis:
● The primary focus of the partnership would be to support a

business transformation program to assist the council in realizing
its strategic priorities.
● The partner would assist in the business transformation program in

areas where the council was unable to resource the activity in-
house, or where it would bring significant added value.
● There was a range of possibilities for the structure of the

partnership. Decisions about this would be made by the council

based on the proposals received, but in any event would ensure
that the council retained overall control.
● Discussions would focus on the ICT services listed in the ITN.

However, the council could add other services later following
completion of separate business cases.
● Services would be included in the partnership on a phased basis,

and, with the exception of services that are currently outsourced,
these would be negotiated on a case-to-case basis.
● All business transformation activity would depend on the

development of a business case, and the process for this would be
agreed jointly between the council and the partner.
● The partnership would be output driven with performance targets

to be met.
● The method of funding would be decided on a case-to-case basis.

The critical determinant would be whether action and investment
through partnership would deliver better value for money than
other options.
● A client function would be developed in order to provide proper

oversight of the partnership.
● The partnership would be set up initially for a ten year period, with
an option to extend for an additional five years.
At the time, Glyn Evans, corporate director of business change,

Birmingham City Council, said, "The incremental partnership is seen
as quite attractive as it means the partner has a greater incentive. We
are developing a process which looks at the business case for each area
of the project. … There is no real example of best practice for business
transformation projects in the public sector, so the council will be
pragmatic in its approach. … We are approaching this with no
preconceptions, parts [of the transformation program] may be kept in-
house, as a partnership, or fully outsourced. We are asking providers
for experience about business transformation, and doing a parallel
exercise ourselves to work out our priorities."
B id de r E va l uat i on
By the end of June 2004, following an initial evaluation, the cabinet
agreed to take two bidders to the next phase of evaluation to be
completed by the end of October 2005. This phase involved three
months of negotiation at the end of which both bidders submitted their
best and final offer (BAFO) submissions. The submissions were
scored by evaluation in the following areas:
● Business transformation — To assess the capability to assist the

council to deliver its vision and corporate plan
● ICT — To assess the role in delivering the ICT service

● Employment — To assess employment models
● Commercial and financial — To assess how the council and the

partnership would work together including commercial, legal,
contractual, and performance issues and affordability of proposals
● Viability — To assess the overall package to ensure that the

proposals for each stream linked together and to assess the cultural
fit with the council
The following criteria were considered during the initial evaluation

process and also during negotiations:
● Effectiveness of the proposed approach to supporting delivery of

the council plan
● Affordability of the bid
● Achievable savings
● Ability of bidder to deliver improved ICT and business

transformation services
● Cultural "fit" and ability and willingness to work in partnership

with the council
● Workable employment models
● Creation of new jobs in Birmingham
To facilitate evaluation of each bidder's transformation ability, the

Business Transformation Group (BTG) commissioned an external
consulting firm (Deloitte) to develop outline business cases (OBCs)
for a number of priority areas. In order to evaluate how well they
would work with the council as well as actual delivery capabilities, the
two final bidders were asked to complete a small scale "proof of
concept" transformation project, funded by the council, based on the
OBCs.
A budget of £300,000 had been set aside to fund the proof of concept
projects and the results demonstrated that efficiency savings could be
achieved in line with the 15% target that had been established in the
business transformation vision. The final scope of business
transformation services would be based on a series of business cases to
be developed throughout the life of the partnership.
C a p it a Se le cte d t o Fo r m Se r vi c e B ir m ing ha m
In the council's opinion, the proposal submitted by Capita was
affordable, demonstrated stronger business transformation services,
and the joint venture model was in line with council objectives. The
"cultural" fit was deemed to be satisfactory and Capita committed to
creating 800 new jobs in Birmingham in addition to those in the joint
venture. Consequently, the council recommended that contract
negotiations with Capita commence.

Ultimately, Service Birmingham was created as a public-private
partnership between Birmingham City Council and Capita Group PLC,
along with several other partner organizations. A 10-year, £475
million contract to deliver IT transformation was signed in April 2006.
Governance arrangements were put in place for business
transformation programs to be proposed and implemented.
The Service Birmingham agreement included changes involving 500

staff from the council's business solutions and IT division into the new
venture. To defuse potential objections, employees were offered a
choice in the way they would be transferred. They could opt for a
secondment to Service Birmingham or take the more traditional
transfer of undertakings (protection of employment)
regulations (TUPE) route if they wished. The majority elected for
secondment and therefore continued to be employees of the council.
Communication with council employees was vital to Service

Birmingham success — staff members were consulted from the
planning phase onwards. Service Birmingham used a variety of
communications methods including email, newsletters, intranet, and
informal forums and question times. On a more formal basis, Service
Birmingham Board Members (representing Capita and Birmingham
City Council) held monthly meetings as well as a quarterly strategic
board meeting.
S e rv ic e B ir m i ng ha m a nd IC T
Service Birmingham implemented major enhancements to the
council's ICT infrastructure, including a £2 million investment in a
new server estate. Transformation of the core IT service delivered to
council employees included implementation of a more resilient
network infrastructure, upgraded computer servers, consolidation of
core applications, and a desktop refresh program. Seven service desks
were consolidated into two and 550 applications rationalized to 150.
As a result, email speed has increased 500%, traffic has increased
30%, and reliability has increased significantly. The number of help
desk calls answered within 20 seconds increased from 40% to nearly
90%.
A Birmingham City Council Enterprise license made almost the entire

SAP product set available, including the SAP Business Suite (finance,
human resources and Procurement, and customer relationship
management), its integration platform Netweaver and a host of
independent software applications from SAP partners. Together, these
would support standardized management and business processes such
as "service to cash" and "procure to pay" along with a range of
standardized reporting and integration processes. Use of SAP
applications was expected to contribute significantly to a savings of
£100 million per year through a 15% increase in productivity over a
five-year period.

S e rv ic e B ir m i ng ha m a nd B us i ne ss Tra nsfo r mat i on
As the council's Strategic Partner, Service Birmingham was a major
contributor to the delivery of Business Transformation and worked
alongside the council to identify opportunities for service
improvements. The CST program (described in detail in this report)
was selected as the first work stream of the Business Transformation
program to be delivered using the shared services model and supported
by Service Birmingham and the council. Implementation of the other
eight work streams would follow later.
In a comment to the press (www.egovmonitor.com/node/18075/print)

Glyn Evans said, "The council's initial driver had been to find a
supplier of technology and associated services. But what developed
was much more radical. A partnership that — while including IT
service delivery — would make supporting the council's ambitious
plans for radical service improvements its main goal."
Implementation of CST
Considered to be integral to the council's efforts to save money and
invest in areas that would enable better services, at the outset the
overall aim of CST was to deliver £800 million in benefits for an
investment of £140 million over 10 years. Implementation of CST
involved a change to a shared-service delivery model and
implementation of Voyager, using SAP's software suite to support the
integration of the council's financial, procurement, and operational
performance management processes. Voyager went live on October
29, 2007, with a goal of delivering efficiency saving of £127 million
(£79 million cashable) by the end of March 2009.
B u s in ess C h an ge D ri ve r s
CST aimed to transform the following council processes:
● Procure to pay: The way in which the council procured and paid
for goods and services from third parties
● Finance: The way in which the council recorded and reported its
financial activities
● Performance management: The way key management

information was provided to decision makers
Pr oc ur emen t an d Payme nts

Birmingham City Council was spending some £900 million a year on
goods and services from over 20,000 third-party suppliers, generating
more than 807,000 invoices (taking feeder files into account the
number of physical invoices received was approximately 550,000).
Over 40% of the 550,000 invoices were issued by just 1% of suppliers
(those selling over £500,000 a year to the council every year).

At the opposite end of the spectrum, the council was spending £18
million with 17,000 suppliers selling less than £5,000 to the council
every year. The large volume of invoices and suppliers meant the
council was spending significant time and money on administrative
work, diverting attention and resources from other more valuable
procurement activities.
Issues with the system constrained the council's ability to deliver best
value through procurement, resulting in missed opportunities to deliver
substantial cost reduction and fragmentation of the council's supply
base. Some examples of the issues:
● Limited use of purchase orders (only 32% of invoices associated

with a purchase order) despite council policy that all purchases
must be supported by a purchase order. Consequently, data was not
available to support the analysis of spend patterns or effective
management of compliance to corporate contracts.
● Low levels of compliance with corporate negotiated contracts.

Groups within the council either knowingly or otherwise chose to
use suppliers other than the preferred corporate supplier in many
cases.
● High levels of non-compliance with existing procurement contracts

and processes.
● Due to resource constraints, Corporate Procurement Services staff

members were not sufficiently involved in strategic decision-
making on how the council used and managed its supply
requirements.
F ina nce
The total number of staff within the finance function was
approximately 1,000. Each directorate had a dedicated finance team
reporting to directorate management and had a "dotted line"
relationship to the S151 officer (i.e., the officer with specific
responsibility for financial matters under the provisions of the 1972
Local Government Act). With the exception of a common revenue and
payments team managing most of the accounts receivable, accounts
payable, and payroll activities of the city, the finance teams provided
full finance support to their directorates.
Many of the finance processes were manually intensive, with much

duplication of effort across directorates, resulting in inconsistent
processes and limited control. Also, specialist skills were dispersed
across directorates, resulting in limited flexibility to allocate these
resources to the areas of greatest need, and through the lack of critical
mass, a higher-than-necessary level of expenditure on external
expertise. Finance faced a number of significant challenges:
● Operational processes, while providing overall regulatory

compliance, were generally fragmented and inefficient and
required a high degree of manual intervention.

● The underlying systems that supported the processes were neither
user friendly nor integrated, and did not provide the needed levels
of flexibility.
● The generation and reconciliation of reports was an arduous task

and detracted from the real value added activities of providing
analysis and insight for members and managers.
● The relative autonomy of the directorates had resulted in an

environment of sub-optimal and narrowly focused solutions that
might solve a specific problem, but generally failed to take account
of the "bigger picture" for the council as a whole.
● The prioritization of directorate needs over council-wide

considerations, combined with a climate of poor enforcement, led
to poor process compliance that exacerbated the problems of
inefficiency and non-value added activities.
Pe rfo r ma nc e Mana geme nt

Management information was incomplete, difficult to access, and
inconsistent; it was costly to prepare, with more time spent on
sourcing and collation than analysis and insight. This compromised the
quality and timeliness of decision-making and the council's ability to
manage service outcomes and productivity. To move toward
optimizing council performance, the council needed to build on these
foundations by addressing key areas that presented the greatest
potential for improvement:
● Joined-up performance management. The performance

management framework being used served external reporting
requirements. Links between financial and performance reporting
needed to be strengthened and performance measures needed to be
extended from external business value performance indicators to
include more measures to explain what was driving performance.
The existing framework was directorate specific and did not
support a joined-up approach to delivering services across
directorates or in conjunction with partners.
● Focus on performance. Significant integration existed between

financial and service priorities in setting the council budget.
However, the tools being used were unable to unite day-to-day
operational management and financial management. There was an
absence of relevant, timely and accurate management information
needed to enable managers to focus on improving outcomes, value
for money and productivity.
● Data accessibility and reliability. A myriad of information

management systems and collation, consolidation and analytical
processes existed. The preparation of management information was
constrained by the tools available, resulting in manual, inefficient
and untimely reporting. People did not have easy access to the
information needed to do their jobs and spent much more time

sourcing relevant information than generating relevant insight.
There were weaknesses in interpretation, policy and definitions.
● Accountability and incentives. There were few rewards for

positive performance and limited sanctions or accountability when
objectives were not met.
● Alignment. The framework was not sufficiently detailed to

support performance management and service improvement at the
operational level so the council's drive for productivity and value
for money was compromised. Significant benefits could be
achieved through a clear corporate focus on performance
improvement and a formal framework that linked strategic,
operational, and individual objectives.
In fo rmat ion , C o mmun icat ions, and Technology

Approximately 150 applications supported the functional areas of
procurement, finance, and performance management. The existing
systems landscape was considered to be a major barrier to successful
transformation of CST and adoption of the new operating model.
Responsibility for ICT decisions had historically been devolved to
individual directorates. This resulted in a complex and fragmented
portfolio of ICT systems and infrastructure, particularly:
● Duplication of investment across directorates, where similar

functions were supported by different systems, essentially
supporting the same tasks and containing similar but incompatible
information
● Development of individual systems to solve particular business

problems, resulting in over 150 individual applications supporting
finance and procurement processes
● Duplication of data entry, exacerbated by the duplication of

systems and lack of systems integration, resulting in multiple
conflicting sources of data, in particular:
○ Customer information dispersed across more than 20 systems

(of which 10 were related to debt-management)
○ Supplier information spread across more than 30 systems
○ Property and other assets appearing in more than 15 systems
○ Limited communication across systems
As a result, much time was wasted rekeying information into multiple

systems, and trying to reconcile conflicting data from different
systems. This approach resulted in a broad range of incompatible
solutions and created substantial barriers to the provision of
management information and therefore effective council management.

Bu s in ess Ne ed
A number of service related outcomes were identified across the
functional areas.
Pr oc ur emen t
There was a need to deliver better value from the council's
procurement of its goods and service so that additional resources could
be freed up to provide for front-line service provision. In a series of
workshops in which the majority of directorates were represented, a
number of desirable outcomes (and associated measures) were
identified:
● Procurement viewed as a desirable place to work within the

council (employee satisfaction — percentage of procurement
employees rating job satisfaction as good)
● Easy to use, standard, yet flexible procurement processes

supported by appropriate systems (percentage of spend through
approved procurement processes)
● People aware of and use the appropriate procurement processes

(percentage of spend through approved procurement processes)
● People have a clear understanding of roles, responsibilities, and

accountabilities within the procurement process (percentage of
spend through approved procurement processes and percentage of
spend-off contract)
● Services and supplies fit for purpose and delivered at lowest total
cost (meet or exceed efficiency savings target over next three
years, £137 million, and customer satisfaction with contracts)
● Timely and accurate information to support informed decision

making (number of FTEs manually manipulating data)
● Delivering equalities, environment, and SME commitments

(percentage of contracts achieving SME participation targets)
● High satisfaction level from all customers (Customer satisfaction

— percentage of customers rating procurement support as good)
● Adherence to contracts that meet BCC needs (percentage of spend-

off contract)
● Procurement staff recognized as experts and involved where they

can add value (number of requests for procurement
support/involvement)

F ina nce
The finance organization considered the CIPFA financial model as a
template to determine measurable outcomes for the finance function.
These included:
● The finance organization would continue to refresh the skills

required to analyze financial and business issues on behalf of all its
customers
● The finance organization would have a performance management

culture and framework aligned to BCC objectives
● There would be compliance with internal controls
● A value for money culture would be embedded in the organization
● Achievement of a CPA use of resources score of four
● A stepped approach in accordance with BCC stated aims
Pe rfo r ma nc e Mana geme nt

The council was facing increasing external regulatory scrutiny of its
ability to manage performance and needed to demonstrate a high level
of competency in this area. It established ambitious targets for
improvement and a fundamental change in the quality of its financial
and service performance management would be required if it were to
meet its objectives. Some of the changes required to meet its
objectives:
Process
● Decisions supported by better access to higher quality

Management Information (MI) (timely, relevant, accurate)
● Management information collated, consolidated and reported

efficiently in a Reporting Service Centre (RSC)
● Performance management processes that would allow a more agile

approach to resource allocation
Systems
● A single reporting system that would present "one version of the

truth" — common access to key performance management
information across the council
● A disciplined and consistent approach to data quality, policies,

definitions and standards

People
● A clear distinction between centralized information management

(RSC) and decentralized or local business partnering and decision
support
● Incentives and individual accountability for performance,

monitored through the performance management framework
Culture
● A culture dedicated to achieving service outcome efficiency,

productivity, and value for money
● A culture of faster decision making and agility enabled by MI

transparency and accessibility
● Individuals and teams who would understand the council's strategy

and that their objectives were aligned to the strategy
In fo rmat ion , C o mmun icat ion , an d T ec hnolo gy

Over 90 of the existing 150 applications were potential candidates for
conversion to a new ERP solution. This would be supported by
standard tools for document management, integration middleware
(systems that run the programs and data), and archiving and Internet
access. An integrated ERP system would:
● Enable the optimization of end-to-end processes
● Break down functional silos
● Ensure a single version of the truth
● Reduce time spent reconciling data across multiple systems
● Rationalize the number of locations where master file data is stored

(such as suppliers and customers)
● Establish an effective platform for provision of consistent and

timely management information
● Sustain the delivery of proposed benefits
The ICT applications were based on the following key principles:
● Increased accessibility of information whilst maintaining security

and control over this information
● Optimized end to end business processes, with improved

information flow between existing functions
● Reduced cost and effort associated with using and maintaining ICT
applications

● A single version of the truth. A consistent accurate source of
information that can be relied upon by the business
Pr op ose d So lut io n
In order to address the challenges, the council proposed a future
operating model based on the following principles:
● Processes. More integrated processes that would overcome

functional silos, whereby standards, best practices and resources
would be shared across all departments at a reduced cost,
delivering more consistent outputs.
● Culture. One that rewards good performance and penalizes non-

compliance with council policies.
● Performance measurement. Measures that allow business

performance, cost and productivity drivers to be measured on a
regular basis, resulting in better business control and more timely
and effective decision-making.
● Systems. An integrated enterprise resource planning (ERP) system

that enables closer integration of processes, and data warehousing
(DW) that would provide timely and accessible management
information.
Sc ope
The scope of CST included procurement, payments, recording, and
control of finance transactions and performance management across all
directorates in the council:
● Procure-to-pay transformation would impact all staff involved in

any procurement and/or payments activity. This was anticipated to
be approximately 1,200 staff using the existing ordering system, all
CPS staff (approximately 70 staff), and a further 400–500 staff in
the directorates.
● Finance transformation focused on the recording of financial

transactions across all Directorates, regardless of whether finance
staff or other staff performed them.
● Performance management transformation would provide managers

with the information and tools to support the management of
corporate and directorates in business planning, insight, and
decision support.
The functional scope of CST is outlined in Table 1.

TABLE 1
Functional Scope of CST
Procurement Finance Performance Management

Strategic and performance General ledger update and maintenance Strategic planning and budgeting
management
Strategic sourcing and contracting Accounts receivable Forecasting
Tactical sourcing and contracting Accounts payable Initiative coordination and management
Ad hoc buying Asset management Information management and standard
reporting
Contract management Financial and management accounting Ad hoc reporting
Business support Cash management and short-term Accountability and alignment
cashflow forecasting
Purchase ordering Project accounting Business performance management and
insight
Inventory management
Source: IDC Government Insights, 2009
Pla nne d Inv est me nt

According to Birmingham City Council, CST was originally planned
at a total cost of £141 million over ten years, but accommodation of
inflation to 2008–2009 prices and such, resulted in an increase to
£144.5 million.
Be nef its Re a lizat ion

CST was initiated to address a series of business and cultural
challenges and to deliver £860 million of benefits (£518 million
cashable) over 10 years; these targets have since been revised to £883
million of benefits (£541 million cashable). There were two key
objectives for benefits delivery:
● Balance the budget over the ten-year time horizon
● Provide funding for the other planned transformation programs
CST's benefits realization team provided support to the process work

streams, the council and to the Benefits Realization Board (BRB) to
define, monitor, and realize the benefits documented in the revised
business case. Weekly meetings with the BRB focused on a detailed
review of every benefit and this led to a series of approved changes to
increase and reallocate benefits between process work streams as
issues arose.
The benefits review for CST came to completion in October 2007 and
in November a series of Benefits Deployment workshops were
delivered to explain the nature of each benefit to directorate managers,
confirm directorate allocations, and to formally handover realization
plans to nominated benefit owners.

The benefits team remained on the program through the first quarter of
2008, delivering additional value realization benefits and assuring
compliance with the agreed actions and plans to deliver the 2007–2008
targets. In March 2008, the team concluded the work with the
production of a benefits handover pack documenting their work in
detail including realization plans, benefit owners, and ongoing risks
for the council to manage.
I m p l ement a t i on A pp ro ac h
As the first in a series of nine work streams, CST provided a test bed
for future processes, tools, and techniques.
Pr og ra m Ma na ge me nt
In order to deliver the business transformation consistently across the
council, an integrated program management structure was established,
underpinned by corporate leadership from a senior responsible officer
(SRO) and a robust planning, tracking, and delivery methodology.
Specifically:
● An integrated governance structure ensured that functions and

work streams across the program communicated regularly on
issues, risks and dependencies (internal to CST)
● A center of excellence for business transformation was established

to provide quality support, methodology development, and
training, and a PMO function. A PMO was established for CST to
oversee the development and use of the following:
○ Business transformation methodology (CHAMPS): A Web-

based framework that encompasses the entire business
transformation journey, from identifying the business need, to
achieving the desired outcomes
○ Quality management framework: Designed to enforce

delivery and quality standards across the program and to
reduce risk and to ensure consistency and excellence of
transformation delivery
Business Transformation Methodology (CHAMPS)
CHAMPS, a business transformation methodology developed by

Birmingham City Council with Service Birmingham specifically for
the public sector, was used to manage CST. Since CHAMPS was still
under development at the time CST was being implemented, the team
continued to develop and refine the methodology over the lifetime of
the transformation initiative.
The methodology focused on citizen services, cultural change, and

efficiency gains and was designed to support the "modernizing
government" agenda. CHAMPS was developed with empathy toward a
political environment, where it is essential to balance increased
demands from citizens against public sector efficiencies and the
modernizing government agenda.

CHAMPS covers the end-to-end delivery life cycle of a business
transformation program and includes all aspects of change for process,
organization, and technology. In conversation with IDC Government
Insights, Glyn Evans expressed his view that the CST implementation
had benefited tremendously from the use of CHAMPS because it
offered a commonsense approach, addresses important questions, and
addresses important issues as the project progressed (see Figure 1).
FIGURE 1
CHAMPS Phased Approach
Transforming Organisations
Initiating Identifying & Planning Transforming Services Realising Benefits

Change Transformation
Service
Transformation Proving
Strategic Transformation Common Creation Continuous Strategic
Visioning Shaping & Consolidation
Need Initiation Design & Improvement Outcome
& Transition
Planning Realisation
Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 7
Programme & Project Management
• What do we • Where do we want to • What is the new service/solution • Embedding the new
want to get to? and how will it operate? solution and stabilizing
transform • How are we going to • Creating the new service/solution the business
get there? and building supporting systems • Making sure the benefits
• Proving the new service/solution are achieved
works as designed and getting the
business ready to use it
Source: Service Birmingham/IDC Government Insights, 2009
SAP Selected as ERP System Supplier
SAP was selected as the ERP software to support CST, replacing some
90 systems. In addition to supporting future expansion (e.g.,
implementation of HR management) SAP was chosen for the
following reasons:
● SAP was already being used to support core finance and

procurement activities
● Skilled SAP Service Birmingham resources already existed
● SAP was widely used by local authorities and leading

organizations

Implementation Timeline
CST was planned as an 18-month program with a project team

comprising 80 council resources drawn from across finance and
procurement functions and a similar number of Service Birmingham
resources (see Table 2).
TABLE 2
Delivery of Core CST Implementation
Phase Commencing Completion Duration (Working Weeks)

Mobilization July 3, 2006 July 28, 2006 4
Program definition July 31, 2006 September 29, 2006 9
Common design October 2, 2006 February 16, 2007 19
Service creation and February 19, 2007 August 31, 2007 28
realization
Proving and September 3, 2007 October 26, 2007 8
transitioning
Systems go live October 29, 2007
Consolidation and October 29, 2007 Ongoing
continuous improvement
Following completion of the design stage, detailed design, and build

work for the business processes and enabling SAP solution
commenced — along with user training, business engagement, and
program communications. This work continued through the summer of
2007 and business acceptance testing began in late August continuing
through September in the lead up to the planned go live on October 29,
2007.
In parallel with the design, build and test stages, the business planning
process was designed and was piloted by the Business Review Group
to deliver the 2008–2009 balanced budget based on council priorities.
In addition, the organization design was finalized and consultation
processes were initiated with unions and key stakeholders.
Behavioral and Cultural Change Program
Council recognized that CST would only succeed with extensive

behavioral and cultural changes. A commitment was made to work
with the council to build the skills needed to address identified key
cultural change issues (see Table 3).

TABLE 3
Key Cultural Change Issues
Cultural Challenge Leadership Action

Lack of trust and empathy between corporate functions • Ensure there is a shared vision and start to develop a
and directorates corporate identify
• Build trust
"It's OK not to be compliant" with existing council • Communicate processes and policies and ensure they are
processes and policies clearly understood
• Reward good performance and address noncompliance
issues proactively
Operational focus not in line with the customer view of • Align business responsibilities with end-to-end business
service process
• Prompt decision making that will support a better service
for the customer
Skepticism about the council's ability to transform • Build awareness of the council's transformation ambition
and ensure leaders support the transformation
• Make behavioral change a reality
In conversation with IDC/GI, Glyn Evans emphasized the need for

communication, "It is critical for senior managers to communicate
with staff directly. It can also help to second staff into transformation
teams, or temporarily into areas undergoing transformation. When
people are exposed to the benefits of service transformation, they
become a credible advocate and help to 'spread the word'. Sometimes
it is beneficial to use technologies like streaming video online, or
Web-chats and discussion forums to support communication efforts.
Engaging council members can be difficult. Complexity, weight of

material and often parochialism (encouraged by the cabinet model of
government) are real challenges to transformation leaders. There is a
need to be mindful of the political cycle, and the need to engage
members from across the political spectrum and at all levels."
A variety of tools and methods were adopted to help people embrace

the change and to recognize it as a business change program and not
just about technology. Endorsement by senior management helped to
overcome resistance, program managers made presentations to more
than 50 corporate management teams, more than 4000 CDs endorsing
the tools, techniques and methodology were produced and distributed
in two different runs with relevant updates. The CDs also included
positive messages and quotations for the CEO, the deputy leader of
council and several directors.
Production System and Go-Live
Go-live criteria were jointly developed with the council and BCC
Audit and were presented for approval to the CST Steering Group,
Efficiencies Board and Business Transformation Steering Group

(BTSG). The criteria set out a number of key dimensions for
consideration with measures and a red, amber, green (RAG) status for
each. CST presented the status against each of the criteria with
mitigating actions and plans for criteria not showing a green status. At
this time, it became apparent that further consultation would be
required with unions and key stakeholders, and implementation and
benefits realization plans for the organization design were modified
accordingly.
The go-live decision was granted in October 2007 and the solution was
taken live on time and to budget to over 5,000 users. The first stage of
go live delivered the full process and technology solutions for Procure
to Pay (P2P), Service to Cash (S2C) and Record to Report (R2R) and
included the Project Accounting elements of the projects and programs
solution as well as the nonfinancial reporting frameworks (i.e.,
scorecards with measures linked to strategic objectives) for corporate
policy and delivery, as well as development and culture services.
Implementation Challenges
Glyn Evans told IDC Government Insights that overall, the completion
against key milestones was good with three SAP go-live dates
achieved on time, as planned. Training, organization design, and
stabilization of the P2P processes were the main overrunning areas, all
of which are now under control and coming to completion.
Progress on the achievement of outcomes was slower than for scope

delivery, this is to be expected. Behavioral and cultural changes are
typically required for outcomes to change and these take time to
embed. For example, there were some challenges in ensuring
compliance with new processes and adapting to the new ways of
working at all levels across the council. Delivery of such a large-scale
program proved to be challenging in a number of ways, for example:
● Additional training was required, consequently access to training

resources and facilities were extended until the end of the year for
the first users.
● A number of system interfaces were deferred for delivery post go-

live, as part of a risk mitigation strategy agreed during the summer,
consequently design build and testing continued into 2008.
● Consultation for organization design continued to be a challenging

and protracted process. As a result, implementation was deferred
until early in 2008.
● The stabilization phase brought all the usual challenges associated

with a large system implementation, and the various project and
user groups worked together to address issues arising and support
compliance with the new solution. Floorwalkers were deployed in
targeted areas to support users on the ground and provide reminder
training as required.

● From a systems perspective, early in the stabilization phase it
became apparent that the challenges of achieving stabilization in
some of the processes had been significantly underestimated. A
combination of resource availability (partly driven by the late
running OD) and resource capability drove the need for significant
additional support during the first quarter of 2008.
● Users and council suppliers took much longer than planned to

become familiar with the additional disciplines that upgraded
procure-to-pay processes had brought. Specifically the consistent
use of purchase order numbers by suppliers, the handling of price
and quantity variances both by Central Payments and authorizers
in directorates, disciplines of running maintenance processes in
Voyager to clear price and quantity variances, and understanding
the difference between 'rejecting' and 'referring' an invoice were
cause for concern. All these issues led to a growing backlog of
invoices for approval out in directorates and invoices blocked for
payment in Central Payments.
Achievement of Business Value

In assessing the CST initiative, IDC Government Insights examined
and evaluated the Impact on ROI, risk transformation, and innovation.
IDC Government Insights assessed the impact of the solution on each
of these critical areas and this report provides an analysis to assist
other government organizations as they pursue similar goals.
A dispassionate assessment of CST would have to conclude that in

terms of the outcomes achieved it has been a successful program; it
went live on time, to budget and is on target to deliver the promised
benefits. However, the internal and external perception was initially
(and to a large though diminishing extent remains) that the program
was failing to deliver, based primarily upon the significant and highly
visible problems that occurred with invoice processing in the period
November 2007–March 2008. These problems are now almost wholly
historic but have a residual impact on the perception of other business
transformation programs and significant effort will be required in
order to restore confidence.
R e t u rn o n I n ve s t ment
IDC Government Insights mapped ROI to business objectives and cost
effectiveness, value to the enterprise, and/or value to the Department
mission.

Birmingham City Council took a thorough, detailed approach to
benefits realization. Rigorously building business cases meant the
program was resourced from the bottom-up, building on evidence and
experience on the ground. Hence, the many work packages that made
up the larger program were richly specified and planned. According to
Glyn Evans, that was one of the "hidden benefits of having a sound
methodology". A rigorous governance process was put in place for the
BTP and applied to the CST implementation. Some of the governance
practices:
● The Efficiencies Board and the Procurement Cabinet Committee

formally reviewed and approved the business case for the CST
program, including details of anticipated benefits.
● Each benefit was signed off by a senior city council officer on

behalf of the organization.
● The Benefits Realization Board reviewed the benefits to ensure

that it was achievable before each one was signed off.
● In most instances, responsibility for actually achieving the benefits

was assigned to deployment champions and business owners in
each directorate as part of the deployment phase.
Achievement of in-year CST-related savings was reviewed as part of

the council's corporate budget monitoring process and via specific
reports to the coordinating overview and scrutiny (finance and
performance sub-) committee.
Be nef its Ta rg ets

The overall benefits target after change controls and revisions for CST
was £860 million (cumulative) over 10 years, of which £518 million
will be cashable (cumulative), since revised to £883 million of total
benefit (£541 million cashable). The in-year target for 2008–2009 was
£57 million.
● Planned program costs: £144.5 million (including inflation etc.,

without depreciation), since revised to £147 million
● Planned program benefits: £860 million (now) over 10 years, of

which £518 million will be cashable, since revised to £883 million
of total benefit (£541 million cashable)
● Planned program payback: three years
B e nef i t s A c h ie ve me nt
● After taking into account inflation (to current year prices) and
agreed change requests and such, as of February 2009, CST had
achieved £400 million in savings and at the time of publication
was on target to achieve a total benefit of £883 million (of which
£541 million will be cashable) for a cost of £147 million, a better
return than originally anticipated. The full BTP is expected to

deliver £1.6 billion of cashable savings based on an investment of
£676 million.
Over 60% of the cashable savings will arise from improved

procurement and payment practices and procedures. However, the
program does include a review of the organizational structure of the
finance and procurement communities, to ensure that it can take
advantage of the new ways of working made possible by the
introduction of new technology.
From the outset, the BTP, the Strategic Business Partnership, and the
implementation of CST were all based on achieving cashable benefits.
As this case study clearly demonstrates, Birmingham City Council has
achieved the benefits predicted for the implementation of CST.
P r ov eIT R O I I m pact o f C S T
IDC Government Insights considers the ROI impact of this project to
be at the very high end of the positive scale (see Figure 2).
FIGURE 2
ROI Impact of CST
ROI IMPACT
LOW HIGH
R is k
Risk includes the situational complexity of the technology (such as
implementation scale and legacy environment) and the implementation
complexity (cross-organizational governance, organizational culture,
and program planning and management).
This was the largest business transformation project undertaken by any

local government in the U.K. There were a number of risks, many of
them outlined earlier in this report. From a technological perspective,
the main risk was the failure to allow existing ICT contracts again,
which were vital to the current ICT services. This could have occurred
if the partnership negotiation had failed. The partnership negotiations
were, however, successful.
The risk then shifted to the complexity associated with the

kaleidoscopic effect of multiple simultaneous major changes.
Although introducing a higher level of simplicity in the longer term,
the changes presented a high degree of risk in an environment that was

dependent on the continued operation of these back-office systems.
For example, the council was:
● Replacing current applications — The complexity of

simultaneously replacing multiple mission-critical applications was
extremely high
● Introducing entirely new processes enabled by new technology

solutions — The risk of "process breakage" was a serious
consideration throughout the CST implementation
● Introducing a new operating and delivery model — The

partnership was new and Service Birmingham as yet unproven
● Making organizational changes — Moving staff to Service

Birmingham
Undertaking the business transformation process was high risk. It was

the most ambitious and far-reaching initiative of its type to be
undertaken by any local municipality; there were no good examples to
learn from. CST was designed to replace many of the council's
mission-critical processes, using a new delivery capability (Service
Birmingham) and a newly designed and implemented applications
infrastructure.
Although SAP and a number of the other technologies were known to

the council and to Capita (the lead partner in Service Birmingham), the
applications were of new design, the organizational structure had been
changed, and processes had been redesigned. This constituted an
environment that was very different from the predecessor
environment. It must be said that although there were some teething
problems, the council and its partners resolved the issues leading to an
implementation that is considered to be a success.
P r ov eIT R is k I mpa ct o f C S T
IDC Government Insights assesses the risk impact to be high (see
Figure 3).
FIGURE 3
Risk Impact of CST
RISK IMPACT
LOW HIGH

T ra nsf or ma tion
Transformation includes the impact on the delivery of a department's
mission, business processes, and lessons learned.
First, it is important to speak to the formation of Service Birmingham,

which brought business transformation experience to the council and a
new IT-delivery capability. The decision to seek out a strategic partner
was well thought through and the outcome speaks for itself. As the
council continues to implement the remaining work streams of the
business transformation initiative, the partnership and the council will
benefit from the lessons learned in every prior work stream
implementation.
The CST implementation has had a significant impact on the delivery

of the council's mission. Business processes were streamlined,
compliance was improved, service to the citizens was enhanced, and
costs were reduced. All in all, procurement, finance, and performance
management have achieved many of the transformational targets
established at the outset of the initiative.
The long-term implications are significant since CST was the first of
nine business transformation initiatives to be implemented, the lessons
learned will undoubtedly enhance the potential for success in the other
eight.
P r ov eIT T ra nsf or m at io n I mp act o f C S T

Because much of the effect of the CST implementation is foundational
and back-office related, IDC Government Insights places the CST
implementation at the higher end of the transformation impact scale,
but not right at the top (see Figure 4).
FIGURE 4
Transformation Impact of CST
TRANSFORMATION IMPACT
LOW HIGH
In no va t ion
Innovation covers the solution's leveragability to gain value, including
scalability, repeatability, and replicability.
The CST implementation was guided using CHAMPS, a new project

management process that was developed by Birmingham City Council

with Service Birmingham and refined as the implementation
progressed. CHAMPS was designed by the public sector for the public
sector and is compatible with other methodologies such as PRINCE2.
CHAMPS supports end-to-end transformation and the methodology
are available for use by other public sector organizations. It will, of
course, be used to support the implementation of the remaining eight
work streams in the Birmingham business transformation initiative.
As a strategic public/private partnership that supports both the

business transformation activities and the IT service delivery, the
arrangement between council and Service Birmingham is innovative.
Council employees work alongside Service Birmingham employees in
a seamless team environment. All parties have a vested interest in the
success of all other parties. This is what a partnership should represent.
P r ov eIT Inn ov at io n Imp act of C ST

IDC Government Insights places the implementation of CST,
particularly the CHAMPS business transformation methodology and
the formation of Service Birmingham at the higher end of the
innovation impact scale (see Figure 5).
FIGURE 5
Innovation Impact of CST
INNOVATION IMPACT
LOW HIGH
Lessons Learned from CST Delivery

CST was the first of Birmingham City Council's Business
Transformation initiatives to be implemented and as such, was "on the
front line" in terms of the usual challenges associated with major
change efforts. In this context, while lessons can certainly be learned
from CST, the results were positive overall, with most managers and
staff in the council significantly more aware of the challenges
transformational change brings, and the implications on people and
processes than before the program began. This awareness and the
overall CST experience will stand future programs such as customer
first and excellence in people management in good stead in terms of
change readiness.

The council made a commitment to capturing lessons learned in order
to:
● Capture things that did not work, that could have been done better,
or that worked well
● Construct ideas about how things could be improved in the future,

and what not to do in the future
● Make full use of hindsight
● Provide input into the other transformation programs
Council agreed that the lessons learned process was not:
● Intended to focus on areas that are not relevant for future programs
● An opportunity to reopen CST design or challenge CST benefits
● A commercial exercise
The CST program is one of nine transformation programs being

delivered by Birmingham City Council in partnership with Service
Birmingham. The revised IT and processes associated with the
program went live on October 29, 2007, with the associated
organizational structure being phased in over the period January–July
2008.
It should be acknowledged that as CST was the first Birmingham City

Council BTP to be delivered in the shared services model, much of the
business transformation methodology evolved as the program
developed.
Through the course of the program a number of lessons were learned

about the best way to deliver a major change program such as CST,
involving a new IT solution, associated changes to processes and
procedures and new staff organization. Some of the lessons learned are
described below:
Ma n ag i ng E x pec t at ion s
A change program of this scope and scale is unlikely ever to be
introduced without encountering problems. Future programs need to
make this clear to both internal and external stakeholders in the run up
to implementation, be explicit about how such issues will be resolved
and establish and publicize communication channels with sufficient
capacity to deal with situations as they develop. When problems do
arise, a team needs to be in place that has the authority and capacity to
manage internal and external (including press) communications.
E n ga ge men t W it h Sta ke ho ld ers

Many within the council feel that while there was significant
information available concerning CST, there was insufficient
opportunity to engage and influence the program. Future programs

should establish appropriate mechanisms to enable all stakeholder
groups to raise concerns and issues and to have visibility that these are
being addressed. However, it must be stressed that any tendency to
pull back from the delivery of program benefits that such arrangements
may encourage would need to be countered by the program team.
Re so ur c ing
It is not uncommon on major change programs to see the go-live date
as marking the culmination of the program and, apart from the
resolution of immediate issues in the aftermath, for the team to begin
to be wound down. CST has demonstrated that the true target should
be the end of stabilization and resource planning needs to take this into
account.
Pr og ra m Imp lementa tion

Through a combination of factors — many beyond its control or only
obvious with the benefit of hindsight — the program went live with
the new processes and information systems many months before the
new organizational design was implemented. This meant both that
certain crucial aspects of the new structure were not in place to provide
support and that many staff were expected to handle new ways of
working while their own future was uncertain, a situation compounded
by the concurrent pay and grading review. While the differing natures
of the transformation programs make it unwise to generalize, there is a
strong argument that the default position should be to implement the
organizational structure in advance of the systems and processes, with
interim arrangements in place to address any problems that this may
cause.
Pr og ra m Ma na ge me nt
Overall program management worked well. Progress was reported on a
weekly basis and on the whole, key controls and disciplines were
maintained effectively. In terms of improvement opportunities, the key
areas identified were:
● Quality principal role. On reflection, it would have been valuable

in a program of the scale and complexity of CST to maintain a
quality principal as part of the management team. Maintaining the
balance between controls and disciplines with pragmatism and
delivery is always a healthy tension on programs and on reflection,
the additional focus and challenge brought by this role would have
been helpful particularly in the early stages where design decisions
were being taken and documented formally.
● Sign off of design documentation. CST had a complete set of

design documentation and change requests and other key
documents were catalogued. However, the sign-off process for key
documents ran quite late and led to tensions between process
owners and the program. Post go-live there were a number of
discussions around design decisions taken and the extent to which
these were signed off and some additional discipline in this area
would have been helpful in hindsight.

Sta ke ho lde r Man ageme nt
Overall stakeholder management was satisfactory for CST.
Stakeholder management was good and more effective on the whole
than program communications although both were sufficient to assure
delivery of the benefits case and on-time, on-budget delivery of the
solution.
It would be fair to say the program management team was primarily

committed to on time delivery of the core solution and realization of
program benefits and as such, CST stakeholder engagement was not
always prioritized as highly as it might have been. Engagement, like
communication, is a two-way process and there is a clear difference
between communication and engagement, but this distinction was not
clear enough during the program.
Ownership and Leadership of Stakeholder Management
Communications and stakeholder management are inextricably linked

and as such, the communications lead should also be responsible for
stakeholder management and be a key member of the program
management team.
Stakeholder engagement should be the primary role of the program

sponsor and should account for a high proportion of his/her time
dedicated to the program. The council's program director should take
responsibility for delivery freeing up the sponsor to ensure
stakeholders are properly engaged and managed. This division of
responsibility between the program sponsor and program director was
not always easy to maintain on CST but overall results were still
positive.
Ultimately, the level of engagement stakeholders at all levels have

with the transformation program rests with the council. The program
team should certainly lead and deliver much of the planned activities
to inform, educate and engage stakeholders, and it should also report
on progress (quantitatively and qualitatively) to the program board, but
the overall strategy and plans for stakeholder engagement must be
owned by the council.
There were many occasions during the lifetime of CST where Service
Birmingham consultants were fronting up events and program issues
with stakeholders when a council representative would have had more
impact and been more appropriate.
Relationship With Cabinet Members, Trade Unions, and the Press
These three groups in particular had considerable interest in, and

influence over the success of CST. Given their degree of influence,
earlier involvement and more proactive engagement with these groups
would have been valuable. Specific examples include:
● Joint program and council engagement with the relevant cabinet

members earlier in the development and trialing of the new

business planning process could have made delivery of the work
stream and ultimately the 2008–2009 business plan, considerably
less challenging.
● Similarly, a strategy of earlier active engagement with trade unions

as part of the organization design work stream may have
preempted the section 188 consultation process and reduced delays
in moving to the new structure.
● Finally, a more proactive engagement of the local press that leaned

into solid relationships in both the city and Service Birmingham
Press Offices would have enabled the messages around the
additional challenges faced in the P2P process to be more
effectively managed post go-live.
Program Team Relationships With Senior Managers
One of the success stories of CST is the quality of relationships

enjoyed between program team members (Service Birmingham, its
partners, and council secondees), and senior managers and staff across
the council. The common design process was challenging in this
regard, but once the realization phase began and the realities of CST
become more apparent engagement improved on both sides and
relationships remain strong today despite the inevitable strains of a
major change effort.
E n co ura g in g Max i mum U s e of t h e N ew S ys t e m a nd

Pr oc ess es
Time and attention maybe needed to bring the system into full use, to
embed the changes to processes and ways of working to fully optimize
the system and reap the full benefits and to continue to change the
culture of the organization. At Birmingham, there were a number of
issues that required attention because of the potential impact on CST
and on the next programs to be delivered (i.e., customer first and
excellence in people management).
● A way to encourage "getting it right first time" is needed.
● There needs to be clarity around those areas that are confusing.
● Changes to the culture of the organization must continue to

encourage change and improve compliance needed to maximize
the benefits linked to the transformation programs.
● It is important to build on the expertise gained during the initial

implementation and utilize this fully in subsequent transformation
programs.
● It is important to ensure confidence in the system being

implemented.

G ove rn an ce
Within the business transformation methodology, there is a specific
governance process for all programs to follow. However, from a
sponsor and senior stakeholders/program management perspective,
this was overcomplicated with multiple overlapping officer groups and
endless reporting requirements representing a significant management
overhead on the program.
The experience from CST is that there were few occasions when
progress or recommendations were truly challenged in any of these
governance forums and the process appeared to disintegrate once the
solution went live. The program team must take responsibility for
maintaining focus on governance.
Communication
A number of myths arose very early in the life of the program. Firstly
because CST was the first business transformation program to exist, to
many people it was the city council's BTP, there was no awareness that
it was only the forerunner of other programs. Secondly, people thought
that CST equaled the whole of the efficiencies program, whereas it
was only part of the efficiencies program, albeit the major one. Neither
of these myths is true but they serve as a good example of one of the
major difficulties experienced throughout the life of the program —
communication and how hard it was and continues to be, to separate
the myths from reality.
Many different channels were used to communicate: presentations,

one-to-one sessions, newsletters, events (large and small/informal and
formal) and emails. It is recognized that some of the communication
were jargon ridden and were too technical.
Communication needs to be two-way. While there is a need for the

communicator to know their audience and use this knowledge to
prepare communication materials and channels, there is also a
requirement on the recipient to be prepared to listen to the messages.
Because we had failed to engage, there was little understanding about
why CST was happening and also during the time of the CST program,
there were a number of distractions. This meant that the organization
was not really willing or ready to listen to the communications being
delivered. However, there were many comments made that it was very
difficult for people to communicate with the program team and the
program team failed to listen.
The program team, the council, and Service Birmingham were all
unprepared for the press reaction immediately following go-live. There
is a clear lesson to be learned here.
S t a b i l iz a t io n
The stabilization phase reinforced the complexity of the council and
continued for longer than expected. Early in the stabilization phase, it
became apparent that the challenges of achieving stabilization in the
P2P process and also for the VSC had been significantly

underestimated. One reason for this was because the implementation
of the new systems and processes brought to light ways of working
that were not only inconsistent with council financial procedures but
also unknown, so these were unaccounted for in the CST solution.
Secondly, there was an expectation that fewer resources would be
needed in the stabilization phase, which was overly optimistic.
Where things are not going as expected, we must be prepared to

acknowledge this, and have contingencies prepared in advance to deal
with problems. It is better to react in a way that has been well thought
through rather than respond instantly without really understanding the
implications of what is proposed.
Issue escalation and resolution could have worked better and still
remains a problem today, with a large number of issues awaiting
conclusion.
T ra i n in g
It was recognized at a very early stage that the volume of training
required posed a dilemma, not just in terms of numbers but also where
such a large amount of training could be delivered, that was easily
accessible to the whole of the city and close to the go-live date. But
due to the difficulties experienced with role mapping and the
consequential administrative difficulties, it became more of a problem
as the wrong people were trained and some people failed to be trained
at all. Over 10,500 training instances were delivered as part of the CST
program, excluding elearning, but this is far fewer than were originally
planned.
Initially, obtaining training places relied solely on role mapping which

was not understood by the council and the program team failed to
explain clearly, why it needed to be done and how vital it was. We
were unable to ensure that managers felt the need to be sufficiently
engaged with the process which caused the difficulties of getting the
right people, on the right training at the right time, which subsequently
led to the poor take up of training places and the need to extend
training provision.
It was always intended that training would be delivered based on the

future organization structure and new system roles. When the new
structure was delayed, this contributed to the confusion. However,
once people did understand the process, and improvements were made
to the scheduling and administration of the training, significant
progress was made, albeit too late to achieve as much training as
anticipated prior to go-live. Earlier involvement of directorate training
staff would have helped to identify how to achieve better training
administration and consequently better attendance.
Su mma r y o f Le ss ons Le arn ed

Fundamentally, the CST program must be viewed as a success. It was
the first of the council's planned transformation programs to go live on
time and to budget; it is on track to realize the significant financial

benefits planned; and new systems, processes, and staffing structures
have been implemented.
FUTURE OUTLOOK
Birmingham City Council continues with the implementation of the
business transformation strategy. The Customer First and Excellence
in People Management work streams are already underway, both
supported by Service Birmingham. The focus will increasingly be on
improving service while containing costs, using the shared services
model as a foundation and keeping in mind the human aspects of the
council's relationship with its citizens. As the potential for using
technology to overcome the challenges of fragmented processes,
multiple service agencies, and geographically dispersed facilities
increases, the local government ecosystem could undergo a change in
shape, size and inter-dependencies. Birmingham City Council will
continue to prepare itself to capitalize on this changing environment,
capitalizing on the development of the shared services center. The
business transformation strategy's support for Moving Birmingham
Forward will provide an excellent foundation.
ESSENTIAL GUIDANCE
Actions to Consider
The CST program must be viewed as a success. It was the first of the
council's planned transformation programs to go live, on time and
within budget. It is on track to realize the significant financial benefits
planned. New systems, processes, and staffing structures have been
implemented. The shared services concept is still gaining ground in
local government, but in the case of Birmingham City Council and
Service Birmingham, it has proven to be critical to achieving the
hoped for efficiency gains and related cost savings. IDC Government
Insights suggests that other governments (central and local) consider
the following actions in order to achieve a similar level of success to
that achieved by Birmingham City Council.
● Develop the overarching architecture that will guide and

inform each individual project as they are undertaken. In the
case of Birmingham City Council, the business transformation
strategy responded to the needs of the council's political agenda for
moving Birmingham forward. It was a plan that spoke to the
operational requirements driven by a visionary strategy. Without
an overarching agenda or architecture, the result could be likened
to building a house one room at a time with no plan or
commitment to what it might look like when finished.
● Carefully consider the need for a partner, be self-aware about

the strengths and weaknesses of your resources and
capabilities. In Birmingham Council's situation, the number and
type of resources needed to fulfill a transformational agenda while
running the business simply did not exist. Experience had shown

that managing a multiplicity of IT contracts was difficult and did
not drive the required benefits. This suggested that contracting for
IT delivery was a good idea. The need for support to implement
the strategic and cultural change was apparent and the linkage
between IT and the business unquestionable, a decision was taken
therefore to seek a strategic partner that could provide support on
all counts. This may also be the right strategy for your
organization.
● Consider using a transformational methodology to guide and

inform your process. CHAMPS covers the end-to-end delivery
life cycle of a business transformation program, beginning with
determining the need for transformation and formulating strategic
outcomes and benefits. This is the real beginning and should be
part of the methodology. Too often, organizations begin with
designing the system and processes without critical analysis of
what the business might look like in the future.
● Plan the benefits realization program at the outset. Potential

benefits will dissipate if there is no formal plan to identify and then
to harvest them. Birmingham established the Benefits Realization
Board to ensure the achievement of benefits progressed according
to plan, and that timely decisions and actions were taken to enable
the delivery of the benefits.
LEARN MORE
Related Research
● Best Practices: Performance Management at DWP's Jobcentre

Plus: A ProveIT Case Study (GI #GITD02R9, September 2009)
● Citizen Engagement: Engaging the Not So Easily Engaged (GI

#GITD52R9, July 2009)
● Invitation to Comment on EU ICT Standardization Policy:

Deadline September 15, 2009 (GI #GIPP52R9, July 2009)
● PwC: Successful Technology Implementation — It's About

People (GI #GI216750, January 2009)
● Western Europe, Government Sector, Case and Records

Management Solutions: IT Spending Forecast, 2007–2012 (GI
#GIPP03Q, December 2008)
● U.K. Home Office Recommends Funding PDAs For All Frontline

Officers (GI #GIPP53Q, November 2008)
● Developing and Maintaining Service Level Agreements in the

Public Sector Organization (GI #GITD02Q, October 2008)
● Western Europe, Government Sector Pulse, April to June 2008 (GI

#GIPP52Q, October 2008)

● Mobile and Remote Working Adopted by Wiltshire Police Force:
Improving Police Visibility (GI #GIPP02Q, September 2008)
● Western Europe, Government Sector, 2007 IT Strategy and

Decision-Making Process: An IDC and Government Insights
Survey (GI #GIPP10P, May 2008)
● Western European Government Sector IT Security Adoption and

Investment Plans — An IDC Survey (GI #GIPP01Q, April 2008)
● Western Europe, Government Sector Pulse, January–March

2008 (GI #GIPP51Q, April 2008)
● IDC and Government Insights, European Vertical Market Survey

2007: Methodology (GI #GIPP07P, March 2008)
Relevant Reading
● The following reports are available at

http://www.birmingham.gov.uk/democracy/Pages/Index.aspx
○ Business Transformation Strategic Partnership — Issue of

Invitation to Negotiate, October 2004
○ Taking Birmingham Forward, Community Strategy for

Birmingham 2005–2010, Consultation Draft Final, March
2005
● Managing Transformation. Front Office Shared Services, May

2008. (http://www.idea.gov.uk/idk/aio/8341252)
● Service Birmingham (http://www.Birmingham.gov.uk)
Synopsis
A ProveIT case study assesses an IT solution that has been

implemented by a government or by a government department. This
case study presents IDC Government Insight's analysis of Birmingham
City Council's back-office services transformation journey. The IDC
Government Insights methodology supports a comparable, consistent,
and independent impact assessment and comments on the project's
ROI, risk, innovation, and transformation impact.
"Birmingham City Council's vision for the future of the city described
in the report Moving Birmingham Forward published in 2005 required
service delivery at an extraordinary level of excellence. Achieving this
and responding to the business needs led the council to launch a far-
reaching business transformation program. Key to the successful
implementation of the business transformation program was the
formation of Service Birmingham, created as a public-private
partnership between Birmingham City Council and Capita Group PLC
along with several other partner organizations. The use of a fully
integrated suite of software applications such as that delivered by SAP

was fundamental to delivering corporate services transformation and
providing a successful foundation for the Council's broader
transformation project," said Jan Duffy, research director, IDC
Government Insights EMEA.
Copyright Notice
Copyright 2009 Government Insights, an IDC company. Reproduction

without written permission is completely forbidden. External
Publication of Government Insights Information and Data: Any
Government Insights information that is to be used in advertising,
press releases, or promotional materials requires prior written approval
from the appropriate Government Insights Vice President. A draft of
the proposed document should accompany any such request.
Government Insights reserves the right to deny approval of external
usage for any reason.

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Best Practices: CHAMPS and Service

Birmingham Key to City's Corporate

European Government Technology Decision Support

MARKET OVERVIEW #GITD03R9

GOVERNMENT INSIGHTS OPINION

benefits. CST is on track to achieve £860 million in benefits over

December 2009, Government Insights #GITD03R9

#GITD03R9 ©2009 Government Insights, an IDC Company

©2009 Government Insights, an IDC Company #GITD03R9

#GITD03R9 ©2009 Government Insights, an IDC Company

● Formation of Service Birmingham to replace existing ICT service

● Adoption of BTP as the overarching, holistic plan to support and

● Successful implementation of CST as the first of nine work

This report focuses primarily on the formation of Service Birmingham

In a ProveIT case study, IDC Government Insights analysts examine a

IDC Government Insights would like to thank the following people

©2009 Government Insights, an IDC Company #GITD03R9 Page 1

Birmingham: The City

Birmingham is the U.K.'s second-largest city, with around 1 million

Birmingham's economic prosperity was originally built on

Moving Birmingham Forward

The council recognized that the vision would be realized in a world in

The council's vision committed to making it simpler for people to

Through the vision, the council committed to achieving a standard of

Page 2 #GITD03R9 ©2009 Government Insights, an IDC Company

Business Transformation Vision

The council was committed to making better use of existing resources,

When deciding on the transformational approach, it was important for

The multiplicity of traditional contractual arrangements covering ICT

Formation of Business Transformation Strategic

©2009 Government Insights, an IDC Company #GITD03R9 Page 3

● Renewal of existing ICT contracts. The council had determined

● An ICT-only partnership. This would deliver an integrated ICT

● Ad hoc consultancy to support business transformation. This

● A partnership including business transformation and ICT on a

● Business transformation services

Page 4 #GITD03R9 ©2009 Government Insights, an IDC Company

● £16 million in services would be transferred to the partnership.

● £10 million in services would be available to the partner on a non-

● £24 million in services would be excluded from the partnership.

Sc ope of Bu s in ess T ra nsf or ma tion Ser vic es

● CST: Implementing tools and procedures to help staff work more

● Customer First: Helping the council to provide world-class

● Excellence in People Management: Transforming the way the

● Excellence in Information Management: Extending the value of

● Working for the Future: Entailing 21st century office

● Adults and Communities Transformation: Improving the way

● Children, Young People and Families Transformation:

● Housing Services Transformation: Delivering more efficient,

● Environment: Helping to deliver the council's commitment to

©2009 Government Insights, an IDC Company #GITD03R9 Page 5

The council developed and adopted an overarching, holistic business

It is important to keep in mind that CST is one of nine work streams

Formation of Service Birmingham

Ten tenders were received in response to the OJEU notice. Following a

I n vit at i on t o Neg ot iat e

● The primary focus of the partnership would be to support a

● The partner would assist in the business transformation program in

● There was a range of possibilities for the structure of the

Page 6 #GITD03R9 ©2009 Government Insights, an IDC Company

● Discussions would focus on the ICT services listed in the ITN.

● Services would be included in the partnership on a phased basis,