Alemania

7.1. NPV ( Net Present Value ) Calculations.

NPVs have been prepared using a discount rate of 3.5% in line with treasury guidance and have been prepared over 8 years. At Full Business Case stage we will also provide 10 year figures for the preferred bidder in order that the Trust can decide whether it is more beneficial to enter into a 10 year rather than 8 year contract although the preferred bidder must be chosen using the 8 year figures requested in the tender process to comply with EU procurement rules.

The actual NPV information is redacted as the bidder’s pricing is Commercial in Confidence.

7.2. NPV including Project and Financing costs, VAT and Benefits

The calculations have been prepared taking account of VAT where applicable in line with current advice from the Trust VAT advisors. This advice will be refined further and subject to greater analysis at the preferred bidder stage. NPVs have taken account of all other cash movements including Public Dividend Capital (PDC) interest payments and cash delivering savings. The actual NPV information is redacted as the bidder’s pricing is Commercial in Confidence.

7.3. Potential Impact on Revenue.

For 4 of the 5 suppliers, revenue savings can be achieved over an 8 time frame whichever the payment option, one supplier is unaffordable. It is expected that savings would increase if a 10 year option is chosen and this will be dealt with at Full Business Case stage.

These savings are achieved as a result of the business change benefits detailed within the benefits case and associated Appendix A. However no analysis has yet been carried out to ascertain if all suppliers can deliver this level of benefit and so the benefits assumption should still be treated with caution at this stage particularly given that some of the suppliers still have considerable

development needed to make their product near fit for purpose.

The exact impact will be determined at Full Business Case stage when negotiations are completed with the preferred supplier.

7.4. Potential impact on Capital.

If at Full Business Case stage the Trust enters into a SaaS arrangement, the whole cost would be expected to be charged to revenue over the life of the contract. If however the Trust decides upon a traditional financing approach then Capital of between £3.3m and £4.9m is likely to be required depending on the preferred supplier (the unaffordable option is excluded from this range).

Should the traditional capital approach be adopted, the recommended financing option would be to approach the Independent Trust Financing Facility for a loan with which to fund the capital

development.

7.5. Overall Funding and Affordability

The most significant affordability issues are faced in the early years of the project no matter which option is chosen with positive cash flows being delivered in the middle and late years of the project, for all but one supplier, mainly as a result of the forecast efficiencies being delivered.

There are risks associated with the proposed efficiencies and so the Trust will need to put in place robust governance and delivery arrangements to make sure the savings are realised.

7.6. Benefits Case

Evidence from other Trusts has shown that the implementation of an Electronic Patient Record can bring with it significant benefits in terms of return on investment. In order to see the largest return on investment, the EPR would need to be fully implemented and embraced across all areas of the organisation. Looking at our internal processes and data, the benefits we have initially identified fall into three categories:

• Quantified cash-releasing savings, relating to the reduction in staff costs, the reduction in costs relating to the maintenance of existing software solutions and the ability to move from paper to electronic communications.

• Efficiency benefits through a reduction in the number of processes which require wasted or duplicated effort.

• And qualitative benefits that focus on improvements to patient experience, reductions in errors and avoidable harm and safety improvements.

The three most significant areas in which we see cash releasing savings are:

• The reduction in the number of application software and systems we manage. This will enable both hardware and software savings in terms of supplier support and upgrade costs as well as time savings as the need for Trust staff to support multiple systems reduces. • The ability to move from paper to electronic methods of communication to both our referrers

with regard to outpatient attendance letters and general clinical correspondence and to patients in terms of appointment letter/TCI notifications.

• Reduction in the cost of administrative staff across the Trust as the reliance on paper reduces.

Appendix A gives a more detailed breakdown of the currently identified benefits. These will be added to and further refined as more data becomes available regarding current costs and

processes and the procurement process continues. Once the preferred supplier has been engaged, these benefits will be reviewed jointly with the vendor to ensure that they are realistic when

measured against what is to be delivered. If additional benefits are identified by the vendor, these will also be included.