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The announcement that NHS National Programme for Information Technology (NPfIT) was dropping it’s centralised approach – in favour of modular, locally-led solution seemed a long time in arriving.

Following recent decisions to scrap the the Microsoft Enterprise Agreement, to cease central funding for the NHS Appraisal Toolkit and not to renew the natonal Enterprise Agreementfor Novell it seems the time for large national IT solutions is over.

With these developments in national strategy, what does the future hold for the Electronic Staff Record (ESR), the integrated human resources and payroll solution used, almost universally, by NHS employers.

Following lengthy testing and pilot site work, the system was deployed across the NHS over 24 months finishing in April 2008.

In retrospect this project seems to be one of the few major IT projects which delivered its results broadly on time and within budget. ESR is now almost certainly the worlds largest employee database and it is surprising the NHS did not broadcast its success more widely.

Through the period 2008-10, work to refine and extend the system’s functionality has continued, now including a wide range of HR, Payroll, Staffing Budgets, Education and Training, eLearning and Self Service. The contract for the system will be reviewed in 2014 and those using the system will be looking at recent developments with interest and, perhaps, some concern.

The well-respected commentator on information technology strategy Smarthealthcare.com recently produced a very insightful article on the future of NPfIT and in May 2010 exhibited another article on the opportunities for health IT providers, including McKesson.

A child of it’s time, commencing in 2000, when national IT renewal efforts in the NHS were viewed as a significant enabler for change and service improvement, the NHS invested resources and effort in replacing more than 90 different human resources and payroll systems plus myriad local records with a single integrated system. The aim was to save the NHS around £300m over the life of its 10 year contract.

ESR was conceived in the context of a national human resources strategy – the new ORACLE platform introducing new functionality which most NHS Trusts would never have bought in local procurement exercises. Admittedly, there were exceptions – Trusts already using modern HR systems – but, accepting the retrograde step for them, the NHS saw these few ”local losses” as a price worth paying for the common good.

When it commenced, ESR’s “standardisation project” was an initial step on the way to a wider shared service strategy -  the eventual objective being to centralise administration of staff records for around 1.3 million NHS employees in no more than 20 transactional processing centres. In most shared service strategies, “standardise, centralise and streamline” forms a common mantra.

The creation of Foundation Trusts in 2005 introduced greater freedoms for NHS organisations and an early challenge to the “mandation” of national solutions. Looking forward, the landscape described by the coalition government’s white paper “Equity and excellence: Liberating the NHS“ envisages even greater diversity and freedom for autonomous foundation trusts, mutual and social enterprises, voluntary and private sector organisations.

How will increasing freedom and choice impact on the national ESR solution?

Before ESR, most NHS organisations used technology from 20 year earlier, and, given the work needed to replace systems in so many organisations there is unlikely to be much appetite to repeat the exercise many Trusts found so difficult. There are too many other things to address and in some places, the benefits of shared service approaches are being re-examined …. ESR can make these projects far easier to implement. Overall the most likely outcome is the national contract will be renewed in 2014.

Nevertheless the emerging IT strategy indicates the Department of Health will probably decide not to continue with its current central funding arrangements beyond 2014 – NHS Trusts should probably assume there will be system usage charges from then. Organisations will have benefitted from free usage and access for between 6 and 10 years and, once system charges are devolved, the perceptions about the system are bound to change – and will be shaped by experience, history and local context.

The national deployment approach for ESR resulted in different solutions being employed in each organisation, with some adopting most of the system’s available features while others use only core functionality. Furthermore, there are many linked systems (e.g. e-recruitment, learning admininstration, rostering, expenses, finance, data warehouses) being used in different ways by NHS bodies to meet all their local IT needs.

Adopting a simple per-capita pricing mechanism (as discussed in the early phase of solution deployment) would make the system seem expensive where ESR provides only a portion of the IT needs of front-line managers, HR, Finance and Payroll teams. In contrast, a modular pricing mechanism might be seen to penalise those organisations which have been most ambitious and successful in using all the system’s features and delivering benefits.

Unless NHS Trusts are very keen to leave the ESR platform, it would be sensible to take stock of their strategy and how their business processes and workforce information needs are best met in future. As well as providing a solid basis upon which to plan further work on systems implementation and benefits realisation before 2014, it might also prevent the unexpected challenge of replacing the system and re-engineering all their business processes simply because poor local system-utilisation makes the ESR solution too expensive to retain.