When an existing private-sector prisons maintenance provider failed, the UK Government had to step in, fast. How could it form a new company with secure procurement, payroll and financial controls?
The new government company, Gov Facility Services, assisted by IBM Services™, configured, and deployed core Oracle Financials, Procurement, Global HR and Payroll Cloud solutions, in just six months.
>1,000staff and contractors and hundreds of supply partners paid on time each month
Thousandsof work orders, repairs and requisitions processed automatically
Helpsto maintain estates compliance and support the Prison Service to uphold order and deliver effective rehabilitation.
From collapse to new company
Her Majesty’s Prison Service implements the sentences given out by the Court Service, in custody and in the community, and rehabilitates people through education and employment. The service currently operates through 123 prisons within the UK, 109 of which they manage directly with the support of third-party facilities management (FM) providers.
Throughout the south of the UK, facilities management services within 49 prisons were contracted to a private company, Carillion Plc—one of the largest British multinational construction and service companies. When the company ran into commercial difficulties and collapsed, with very little warning, a replacement facilities management provider for the prisons estate was required.
Within an extremely short period of time, the Ministry of Justice (MoJ) stepped in to create a new operating company, Gov Facility Services Ltd (GFSL). GFSL was in a unique position: from the moment of creation, the company became accountable for every piece of work-in-progress that was in-play with Carillion while having to uphold a number of other critical FM-related services at multiple high-security sites.
Taking immediate action
When Carillion collapsed, its operations were transferred to the legal custodian for insolvent companies, the UK Official Receiver, which sought to repay creditors and manage the termination of the company’s activities.
To run a number of its critical back office business operations in the short term, GFSL relied on the Official Receiver to continue upholding a number of Carillion’s existing systems. This was despite the fact that the support capabilities were in rapid decline as the Official Receiver looked to close the business. As a defensive measure, GFSL also levered off the existing MoJ Prison service infrastructure in support of engaging and paying suppliers. This allowed GFSL to continue delivering a multitude of critical and non-critical FM-related services: for example, the continued delivery of all health & safety and security related systems, statutory compliance assurance, and day-to-day general repairs and maintenance.
Paul Ryder, Chief Executive at GFSL, comments, “As GFSL stepped into the business, the big challenge was picking up and establishing an organization with 1,000 staff and delivering GBP 100 million of critical services into high-risk environments. We had limited infrastructure, a new workforce, and the need to quickly redress a substantial bow-wave of backlog work.
“We were relying on the Ministry of Justice and a third-party bureaux to pay our people and supply partners. The Official Receiver, which managed the closure of Carillion, was able to offer us six months support before we had to stand on our own feet. A key question was: how could we quickly and safely establish a suitable, viable operating platform, to underpin our core service requirements?”
Choosing from three options
The GFSL team examined three possible options: transfer all operations to the Ministry’s existing platforms; outsource operations to a third-party; or create its own back-office solutions.
Transferring to the Ministry of Justice solutions would mean tailoring the GFSL processes to fit the existing processes. However, the Ministry and GFSL do not share the same statutory and commercial responsibilities. GFSL is incorporated as a standard UK Limited company, which provides some operational freedoms as well as incurring specific statutory reporting. Adapting the Ministry of Justice’s systems to allow for GFSL’s needs would be costly and slow, and the Ministry itself might choose not to proceed.
Outsourcing payroll, procurement and finance to third-party providers looked attractive, particularly in terms of speed, but it proved impossible to quantify the requirements. GFSL was picking up the pieces from a sudden business failure, and could not provide validated estimates of volume, transactions or value. Agreeing a contract without the basis of fact could risk very large cost and time over-runs, which both GFSL and the providers could not accept.
Creating and deploying its own solutions looked more positive, but the six-month timeline seemed insurmountable. As part of due diligence, GFSL invited systems integrators to propose solutions, stressing the urgency and the need for absolute commitment to on-time delivery.
Don Keigher, Transformation Director at GFSL, explains, “Discussing options with possible implementation partners, IBM offered GFSL the greatest assurance around time to deliver, and in terms of how to best meet our needs. The IBM team appreciated the bigger picture, such as the urgency created by people leaving Carillion and the subsequently degraded service. In short, IBM fully understood our needs and ‘got’ what we wanted to achieve.”
Selecting Oracle Cloud solutions
GFSL and IBM selected Oracle Cloud as the most suitable route, both for the flexibility of a cloud solution and the ability to stand up new systems at very short notice.
Don Keigher continues, “We focused on Oracle for a number of reasons. Carillion had been using Oracle systems, and for users out on sites the familiarity would be a good thing. Further, we could host the solutions within the Government Oracle Cloud, which was attractive from a governance perspective. MoJ uses Oracle through their SSCL SOP platform, so alignment was attractive. Finally, an Oracle Cloud solution was seen as scalable and adaptable, therefore future-proofing the investment. The challenge was to use these elements to our advantage with a partner that could deliver.”
The IBM team recommended focusing on defining a minimum viable product for HR, payroll, procurement and finance, to ensure that the schedule was satisfied and to secure a foundation for future growth. As Stephanie Hill, Finance Director at GFSL remarks, “Early on we established that the minimum viable product was the right way to go. We could add functionality at a later point under a ‘continuous improvement’ approach, but the pressing requirement was to hit the timeline. From the outset everybody worked collaboratively, and the relationships that we forged through the process were exceptionally strong and supportive.”
IBM Services provided systems integrator services, drawing on its experience with many other public-sector operations to ensure good governance and business-rule expertise. The project was shaped into two releases, starting with finance, general human resources, supply chain and expenses, to be followed by payroll and absence management. By focusing on the minimum viable product, the combined team replaced the traditional ‘one chance to get it right’ approach and created a culture that embraced ‘best possible with the flexibility to improve later.’
Oracle Cloud success in three months
Working with IBM Services, GFSL went live with Oracle Global HR, Finance and Procurement Cloud solutions in under three months, just nine weeks after Oracle had deployed the environments. GFSL also launched Oracle Cloud Payroll within six months. From a standing start, GFSL was able to run its own payroll, procurement and financial systems. To give an idea of scale, the Oracle Cloud solution handles around 700,000 transactions a year, for planned maintenance, repairs and related service work, some of it driven by the statutory requirements of keeping people secure and safe in the prisons environment.
Stephanie Hill comments, “At the start we were processing paper invoices and requesting the Ministry to pay our suppliers, with little or no evidential trail. Our suppliers were not happy with processing and payment delays, potentially damaging our relationships. With Oracle Procurement Cloud, we have the ability to pay suppliers with proper governance using an automated three-way match, confirming valid purchase orders, goods delivery and accurate invoicing. We now procure the correct goods and services, with financial control and oversight, and pay vendors on time, establishing a reputation for competence that is exceptionally important in the prisons sector.
IBM provided additional staff as transition workload reached a peak, and provided both on-site and remote training for more than 220 front-line employees as the new Oracle Cloud solutions were rolled out. Where prison IT infrastructure was unsuitable (some of the buildings are old, and for security reasons there are restrictions on connectivity), IBM helped enable alternative locations with systems able to provide full connection to Oracle Cloud.
“On this foundation and using the ‘best possible with the flexibility to improve’ approach, we are building compliance processes to ensure we receipt goods on time, procure from approved vendors, and agree fixed prices,” continues Stephanie Hill. “The advantage of the Oracle Cloud is that with help from IBM Services we can extend and develop these capabilities, introducing financial monitoring and advanced reporting without impacting the time-critical delivery of the core solutions. For example, a natural extension will be to introduce catalogs for purchasing—and we already have a great deal more on our wish list.”
Managing prisons payroll effectively
Naturally, the transition was not without difficulties. For instance, in the hectic transition from Carillion some employees who worked at multiple prison sites appeared more than once on the payroll, and some contractors were registered incorrectly as employees. With limitations on available resources within Carillion as it was being closed down, the data inherited was constrained. GFSL took on staff with a range of different pay scales, terms of service, pension entitlements and more, all of which needed to be accurately reflected in the human resources records
Working on a collaborative basis, IBM Services captured and corrected many of the anomalies, scrutinized monthly payroll and re-configured the Oracle Payroll Cloud solutions. The solution stores more than 106 distinct pay elements to ensure every person is paid properly for hours worked, holidays, over-time and more.
Don Keigher explains, “Payroll issues have diminished each month, and the team has caught them as they’ve been going through. The good news is that everybody gets paid, and from this base we are introducing new controls and finding the best ways to support our workforce. By moving to our Oracle Cloud solutions, GFSL has the ability to understand the business of prisons maintenance more accurately—possibly more accurately than ever before. We can now report to the Ministry of Justice on the operational costs of maintaining the prisons estate—an essential part of the GFSL remit—helping them and us to plan budgets, manage our operations and maintain compliance and assurance to enable the Prison Service to keep both prisoners and the general population safe.”
Stephanie Hill adds, “With Oracle Financials Cloud we now know what we’re spending and what we’re spending it on. With essential assistance from IBM Services, GFSL reached this major capability in a very short space of time. The next step is embedding the right controls and the right processes to manage our financials on an ongoing basis, such as closing a month and reconciling all the control accounts. While much of that activity is manual at the moment, IBM Services has shown us what can be achieved with the Oracle Cloud, and how quickly we can achieve it.”
Caring for prisoners
Maintaining the fabric of Her Majesty’s Prisons is an unsung task. Defects, like the failure of a life-safety system such as a fire alarm or key electrical infrastructure, can compromise the operation of a prison, with serious impacts on security, safety and welfare, as Don Keigher explains: “In the broader context we support about 1,200 people who deliver essential FM-related services in prisons, in which vulnerable people are resident day and night. Though these services don’t tug at the heartstrings, they are absolutely vital to maintaining order and the proper conditions in Her Majesty’s Prisons, and Oracle Cloud and IBM Services play their part in robust, reliable operations.”
Paul Ryder concludes, “IBM Services was very supportive and fully focused on helping us understand what we needed to achieve and how to achieve it within the timescale. GFSL had a big gap in knowledge and understanding around the potential of the Oracle Cloud, and IBM helped bridge that gap.
“The clear result is that with help from IBM Services, GFSL now operates its own financial management systems, built within six months, on the Oracle Cloud.”
About Gov Facility Services Ltd
In January 2018 Gov Facility Services Limited (GFSL) took over responsibility for maintaining 52 of Her Majesty’s Prisons located across South West, South Central, Kent & Sussex, Greater London and East of England. GFSL employs around 1,200 people, with a budget of around GBP 100 million annually.