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Defence invites comment on $1 billion ERP consolidation plan

by Justin Hendry •
Free resource

Continuing to engage industry throughout its $1 billion-plus ERP transformation program – Defence INSIGHT, the Department of Defence has issued a market sounding questionnaire a month before it commences the proposed Registration of Interest (ROI).

The questionnaire seeks feedback on information released in a Market Briefing Information Pack in December so “to inform the design and content of the procurement process.”

Questions assess Defence’s current thinking about the program across four main areas:

Delivery model

In order to minimise risk, Defence proposes a delivery model that appoints two System’s Integrators (SIs) and utilises three tranches of work. In addition to providing feedback on this model, the questionnaire asks industry to consider the implementation roadmap as well as any alternatives. 

Procurement Approach

Once issuing the ROI, Defence will consider a Joint Solutioning approach to procurement “to alleviate the ambiguity and prescriptive nature of traditional procurement approaches and promote independent and innovative thinking.” Industry should consider whether this approach will be of benefit, what are the possible risks posed, and what is the practicality of the indicative procurement timeline. 

ROI Preparation Considerations

Defence intends to use the ROI to gauge industry’s intention to participate as either a prime or subcontractor and, using a force ranking assessment, the extent of a supplier’s expertise.

Capability and Experience

Having entered into an $86 million contract with SAP in July 2015 for software, the Department also seeks to understand industry’s breadth of capability and expertise, including their understanding of Defence and SAP.  

Any other viewpoints or suggestions can also be submitted to Defence for consideration as part of the questionnaire.

 “By conducting this market sounding exercise, Respondents are being provided an opportunity to provide feedback on Defence’s thinking and its proposed models and concepts, ahead of the procurement process,” states tender documents.

“Defence also seeks to understand market perspectives on risks so that it may develop appropriate risk mitigation strategies or modify its approach.”

Defence held a market briefing on 17 December 2015 where it revealed its proposed procurement plan for the $1 billion ERP consolidation.

Defence INSIGHT, which remains unapproved pending first pass approval from the Government (expected in July), is the largest ERP implementation of its kind in the Australian Government. It follows the release of the 2015 First Principles Review of Defence which found that the sheer number of structures, systems and processes used by the department had resulted in “institutionalised waste”, and called for the consolidation and standardisation of current information management practices, considered critical to enable the One Defence business model.

Defence’s decision to engage industry early into Defence INSIGHT is also in keeping with the review, which recommended that the agency overcome duplication and institutionalised waste by tailoring its procurement strategy to “a leaner ‘smart buyer’ model that better leverages industry, is more commercial orientated and delivers value for money.”

Defence has already opted to use SAP’s Defence Forces and Public Security application but will also require (in addition to the two SIs) a Strategic Partner and Organisational Change Management (OCM) Partner, according to the Market Briefing Information Pack. Defence calls the group its “contractor community”. 

Defence has not yet approached the market for specific Defence INSIGHT Strategic or OCM partners, however, PWC holds a $10.3 million contract with the department titled “Strategic Partner and ICT Consultants,” and Dimension Data holds a $9.5 million contract for “Project Management Services”.

Much like the invitation to the Market Briefing, responses are not mandatory and will not preclude any future participation in the procurement process.

The rapid pace of the program reflects the intention to commence the ERP consolidation in July 2017 and the expectation that it will take eight years to complete.

Submissions for the market sounding questionnaire will close 27 January 2016. A ROI will be released on 15 February 2016, with Joint Solutioning Workshops to begin in May 2016.

Related Articles:

Defence reveals $1 billion ERP program delivery plan

Suppliers get first look at Defence ERP plan

First Principles Review tackles Defence’s persistent enterprise issues

Budget Reveals $255 million Digital Transformation Agenda

Defence CIO: Information management the key to Australia’s future war capability

Defence seeks system integrator for information management solutions

$86m Defence, SAP contract marks beginning of One Defence transformation



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  • Defence