IBM looks set to run the Electronic Staff Record after being named as the preferred bidder to take over the contract next summer.

In the December edition of ESR News, Paul Spooner, the NHS ESR programme director, says the company will start to take over the management of the NHS HR and payroll system following contract award.

He also thanks the current ESR supplier, McKesson, “for the quality of service delivery during the ESR contract to date.”

McKesson won the initial, ten-year contract to supply the ESR – which was one of the first, big, national IT projects to be delivered for the health service – back in 2001.

At the time, the £325m contract was intended to replace the 28 payroll and 67 HR systems in use across the NHS.

The roll-out of the new system was completed in 2008, and McKesson delivered a major upgrade in 2011, moving the ESR onto Oracle E-Business Suite 12.1, to give 1.4 million users access to additional functionality.

However, in 2013 McKesson put its International Operations Group, including McKesson UK up for sale.

Although it eventually decided to retain its workforce business when it sold its UK business to Symphony Technology Group, it also announced that it would not be bidding for the latest ESR Services contract.

Frank Rutley, the managing director of UK Workforce Solutions, told EHI at the time that running a system of this kind was no longer core business for the company, and it would instead focus on helping trusts to use data to address strategic staffing issues.

The DH tender for the new ESR, issued in December 2013, indicated that it would run for five years and nine months, with an option to extend for two years.

It also indicated that the package would be worth £200m to £400m, with a requirement to provide “certain enhancements”.

A number of NHS organisations were asked to contribute to the ender requirements, and IBM will now be expected to deliver improvements that include access via mobile devices, integration with e-learning platforms, and better display of payslips and other documents.

In the newsletter, Spooner argues that “this is a very exciting time for the ESR” and his team will continue to work with stakeholders “to plan for and maximise the benefits off the new functionality that will be available.”

IBM beat off competition from Steria and CSC to become preferred bidder.