Review of METAFOR business case

Report: 09
Date: 17 April 2008
By: the Director of Information on behalf of the Commissioner

Summary

The original METAFOR business case for £17.1M was approved by the Finance Committee in April 2003. A revision to this case for £14.4M was agreed May 2007. The budgetary provision for the project remained at £17.1M

This report asks members to note the re-profile of the capital and revenue elements of the METAFOR business case upon the recommendation of MPS Finance Services. This was following direction from the Capital Programme Review Board and subsequent review of the business case by Investment Board on the 25 March 2008. The Programme requested an increase in Capital funding to £13.8M. To counterbalance this, the revenue funding required will decrease to £0.6M. The re-profiling more accurately reflects the Systems Integration solutions on the market. No additional funding is required as the current programme remains within the £14.4M total of the revised business case.

Approval is sought from the Finance Committee to authorise the re-issue of an Invitation To Participate in a Mini Competition (ITPMC).

A. Recommendations

Members are asked to:

1. note the re-profiling of the approved budget for the METAFOR Programme

2. approve the re-issue an Invitation To Participate in a Mini Competition (ITPMC).

3. note that the revenue savings from the reprofiling will be retained corporately to fund the revenue implications of the future capital programme.

B. Supporting information

METAFOR Overview

1. METAFOR is a cross-functional solution that will cater for requirements within Forensics Services, Property Services, TP, SO, SCD units and OES. METAFOR will develop and implement a Forensic Case Management System and Property Management System that will gather, manage and track information on crime scene examinations, central and local property, forensic exhibits, submissions, forensic statements and intelligence. METAFOR will support the work of forensic staff and also support the investigative processes.

METAFOR Background

2. The Finance Committee approved the revised METAFOR business case in May 2007 which was based on the cost of the recommended COTS (Commercial off the shelf) solution over a ten-year period which was £14.4M. The budget allocated to this work in the Capital Programme and the MTFP is £17.1M.

Approval and Procurement Approach

3. Following the recent procurement exercise to appoint a Systems Integrator to deliver the solution, three consortia replied with bids indicating that the proposed solution will cost £10M, £15M and £18M respectively. Due to these unexpectedly high costs the Programme Executive decided to reject all bids with a view to re-issuing the tender. Further more, suppliers explained in de-briefs that the balance of capital vs. revenue expenditure projected by METAFOR is incorrect. In their real world experience, even with a heavily revised requirement, the budgetary emphasis should be on capital expenditure and not revenue. The total funding required remains within the overall business case envelope of £14.4M but only £0.6M is now required to be revenue whilst the Capital requirement has increased to £13.8M. The summary table in section C gives more details.

4. The Metafor Programme Executive approved this request for a re-profile of funding on 14 February 2008. MPS Finance Services have advised that this should be approved by the MPS Investment Board, which it was on 25 March 2008, and then notified to MPA Finance Committee.

METAFOR Business Benefits

5. Key benefits of METAFOR include:

• Reduction in future payments to third party suppliers
• Potential reduction in future warehouse investment requirements and more efficient use of existing accommodation
• Improved efficiency and more effective forensic and property management services.
• Improvement in job satisfaction
• Enhanced perception of MPS

6. The original benefits were agreed and signed off by the senior stakeholders in their respective areas and are reflected in the Benefits Realisation Plan submitted to the MPS Investment Board in March 2007 and approved by the Finance Committee in May 2007.

7. There is a cost avoidance benefit of £21.6M over 10 years arising from reductions in future payments to 3rd party forensic suppliers through improved financial and performance information. Some costs have been incurred as a result of the delay to the roll out of METAFOR but these are project costs and do not reduce the planned savings to be made by the Directorate of Forensic Services. However, their realisation is delayed until 2010/11 from the original forecast of 2008/09.

8. It has previously been accepted in the approvals process that these forensic benefits will be treated as cost avoidance rather than cash savings. The opportunity to generate further cash savings will continue to be considered as part of the MPA/MPS business and budget planning process.

9. With respect to the benefits realisation for Commercial Services, it is anticipated that savings will be cost avoidance from no longer needing to purchase additional warehouse space.

10. Ultimately, all METAFOR benefits will drive towards an increase in sanction detections and improved value for money.

Abbreviations and acronyms

COTS

Commercial off the shelf

EDRM

Electronic Document Records Management

ERP

Enterprise Resource Planning

METAFOR

Met application for forensic case management

MTFP

Medium Term Financial Plan

OES

Operational Evidential Support

SI

Systems Integration

C. Race and equality impact

There are no direct equality and diversity implications. The contract will
require adherence to MPS policies on race and equality.

D. Financial implications

1. The original business case approved by the MPA was for a total cost of £17.1M of which £7.1M was capital and £10M was revenue. After the initial contract was terminated, a revised business case totaling £14.4.M was approved but the budget was not revised at that time.

2. The current Programme remains within the revised business case total of £14.4M, and is therefore £2.7M lower than the original business case.

3. As a result of the reasons articulated in this paper, a total of £13.8M capital is required which is £6.7M greater than originally approved. Any potential property implications and associated costs relating to this project are being assessed and will be reported at a future stage. However, £1M per year revenue funding from the DoI budget to support the capital programme was originally set aside to support this over a 10-year period (a total of £10M). The realignment of expenditure now gives rise to a reduction in the revenue funding requirement of £9.4M compared to the original business case and budget.

4. A significant reduction in revenue has been achieved as a result of the SAP license and maintenance costs being subsumed by the ERP Centre of Excellence (SAP) as part of alignment with MPS strategic initiatives.

5. The METAFOR Programme will align with the corporate EDRM solution, which will deliver an EDRM capability suitable for MPS wide deployment in all EDRM related business contexts. The revenue costs for licenses will again be subsumed with the EDRM programme hence further relieving the need for revenue. However, extra capital will be required to cater for the integration between the solutions. Given that the benefits arising from the expenditure are articulated in the business justification for procuring a corporate EDRM solution, the approach is being taken that the funding required to deliver these benefits will come from the EDRM Programme and provide a longer term cost effective solution for the MPS.

Table 1: Summary Table Showing the Change in the Capital and Revenue Funding Profile compared to the original programme costing of £17.1M.

6. The METAFOR Programme Executive approved the re-profiling of capital and revenue elements of the budget on the 14 February 2008.

7. The main impacts of the changes in capital are 2009/10. The capital programme already has a significant funding shortfall. As identified to the Authority in November 2007, the MPS recognises the need to carry out more detailed work on the Service’s demands and anticipated project costs for 2009/10 and beyond. This work will be carried out in 2008/09 to ensure best match with strategic objectives, with consideration to affordability and the impact on the MTFP. The changes to METAFOR will need to form part of this review. Therefore the revenue savings from the METAFOR Programme will be retained corporately to fund the revenue implications of the future capital programme.

8. The additional capital expenditure required will be included in the next version of the 7-year capital plan to be submitted to the MPA.

9. This project forms part of the overall development programme for Forensic Services. The financial impact of the delay in the programme will be assessed when the timetable for implementation of this project is clear. The implications will then be reflected in the MPA/MPS MTFP.

E. Legal implications

No legal implications are anticipated. Procurement Services will ensure that the contract will comply with MPA procurement regulations and all relevant EU and UK Government Directives.

F. Background papers

• METAFOR Business Case v 2.1
• 960408 Benefits Realisation Plan PLN001 v 2.0

G. Contact details

Report author(s): Mukesh Dev, METAFOR Programme Manager DoI (3), MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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