The NHS has begun procurement of a new national system to replace the current variety of payroll systems used in the NHS at the moment.

At the moment, 90 per cent of NHS staff are paid through three payroll systems: SMS's standard payroll system (SPS), Rebus's OpenDoor, or EDS. The national procurement is prompted by the expiry at the end of this year of the largest of the three - the SPS contract, which pays 320 NHS organisations. The end of SPS means a loss of£1.5m of processing revenues annually for SMS, plus another£800,000 in software development fees. According to NHS Executive finance director Colin Reeves, the SPS software was becoming increasingly harder to update for new pay and working hours structures, as well as the possible move to European monetary union.

Nine suppliers have been selected to move forward to the requirements specification stage: EDS, Logica, MDIS, McKessonHBOC, Rebus, SMS, Unisys, Oracle and a joint bid from SEMA, SAP and KPMG. The successful bidder will also have to maintain SPS until it is dumped in 2003.