The Department of Finance has set out a roadmap for its reforms to Enterprise Resource Planning (ERP) systems across the public service, possibly signalling the end of an era for software companies currently tied into lucrative contracts with the federal government.
The investigation into optimising ERP software costs comes after the 2013-14 Federal Budget allotted $2.8 million over two years for a study of the costs and benefits of rationalising the number and type of ERP systems for all agencies in the public service.
The study’s findings, due to be released in a report in 2015, have been partly laid out by Finance in the clearest indication yet that the government will seek to reduce costs by minimising the duplication of ERP services in a more financially austere environment for the public sector.
Finance documents provided to technology vendors state that the Department wants to “drive efficiencies to support a reduction in the net cost of ERP solutions to the Commonwealth”.
“The current approach to delivering ERP capability across the public sector is inefficient, ineffective and if left unchecked, risks leaving the public sector with unsustainable costs and capability that is significantly inferior to that which is common in the private sector,” Finance's ERP Information Paper states.
Among the measures initially recommended by the National Commission of Audit, and outlined by Finance to streamline ERP systems over seven years, are:
- Standardising ERP processes across the Commonwealth through the adoption of a staged implementation of shared corporate services;
- The introduction of a mandatory ‘cloud first’ policy for all low risk, generic information and communication technology services;
- The establishment of a whole-of-government cloud computing provider panel;
- Coordination of software updates through a centralised system; and
- Shared services for finance and procurement functions.
These changes are aimed at consolidating the many common processes across the public sector which fulfil similar functions, but possess superficial differences based on historic practices, preferences and legacy issues.
Finance has outlined its vision of a “more agile, flexible and mobile” public sector in the medium to long term, with the streamlining of ERP intended to play a large role in this process.