Siemens Business Services has been awarded a £59m contract to develop a payment and accounting system for the Department for Work and Pensions (DWP).

The contract, set to run until 2010, will see Siemens provide a Central Payment System (CPS) to modernise the way DWP makes, manages and accounts for the £111bn of benefits, pension and allowances paid annually to 17 million people.

Siemens will work with DWP on the development and delivery of CPS and provide support for the system, which will use Oracle’s E-business Suite.

CPS will integrate with existing DWP systems and processes and provide improved customer service through faster, more accurate payments and greater accounting controls.

Tony Lock, European research director at analyst Sageza Group, says the success of the contract will depend on how well it is managed by Siemens and DWP.

‘Good change management will need to be in place so the definitions are right and there is no scope creep. This will ensure only absolutely necessary changes are incorporated,’ he said.