The council’s executive approved the investment which will see the authority adopt systems from, and become part-owner of, Hoople Limited. Hoople oversees services including human resources, payroll and finance for a number of public sector shareholders.
It follows a number of “significant” issues with the authority’s current system – which began as Agresso and is now called Business World.
Councillor Richard Davies, executive member for highways and IT, said he felt the new system “addressed the big issues”.
The problems affected both the authority and the 160-plus schools it looks after.
Councillor Patricia Bradwell, deputy leader of the county council, said bringing Hoople in would help to resolve the issues.
“We have been in a terrible place in terms of our IT, but it does seem that it [Hoople] is a system which is working for other councils,” she said.
“There are risks, but there are always risks with anything. I am quite happy to go ahead with this.”
The council has a contract with Serco worth £70 million to deliver IT, finance and HR services, as well as taking over the authority’s customer services centre.
However, the contract, which was due to end in 2020, was beset by issues of poor performance and difficulties in configuring the software.
The authority later fined Serco more than £2 million for poor performance.
Last year, the county council voted to extend the contract for the provision of IT, payroll, HR, customer services, exchequer services and adult care finance until the end of March 2022.
Councillors instead took a number of services, including the at-the-time Agresso system, in-house and carried out further investigations.
Becoming part owner will also give the council – along with Herefordshire Council and Wye Valley NHS Trust – more control over the development of the system.
Council officers said the system would save the authority around £200,000 a year.
Hoople is looking to settle a seven-year agreement from the authority with an option to extend for a further two years.
It is hoped the move will be finished by April 2021.