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Last two partners sought for $1b Defence ERP program

by Justin Hendry •
Free resource

Topics: IT Services; ICT Strategy; Fed.

A decade-long relationship could be established with the final two delivery partners of the Department of Defence’s $1 billion-plus enterprise resource planning (ERP) transformation program, known as Defence INSIGHT.

The program’s latest approach to market is seeking to establish standing offer arrangements with a Strategic Partner and an Organisation Change Management (OCM) Partner, to perform work between the first pass and second pass government approval stages (estimated at 12 to 18 months), before partnering on an ongoing basis if approval is granted.

“Subject to Second Pass Government Approval being obtained and satisfactory performance, Defence expects to enter into work package contracts under the deed of standing offer with the successful Strategic Partner and OCM Partner...”, states the Request for Tender (RFT).

However, despite the program’s move forward, Defence has not yet submitted the program for first pass approval, after indicating that it would do so in March 2016. Defence is now unlikely to submit the program for first pass approval until the results of the federal election have been finalised and the caretaker period is over.

Defence indicated in January 2016 that five suppliers would likely be appointed to deliver the program: two SIs, a Technology Partner, a Strategic Partner, and an OCM Partner.

Defence has already designated SAP as technology partner and awarded an $86 million contract in August 2015 for SAP’s Defence Forces & Public Security application and S/4 HANA platform to support the transition.

Defence has also recently approached the market for SIs to design, develop, implement and test the ERP solution in May 2016. Defence intends to use the Invitation to Register Interest to shortlist a small number of potential SIs for a future RFT procurement process (if Defence should conduct one), before engaging two SIs under a standing offer style arrangement.

The Strategic Partner and OCM Partner were therefore the final two key delivery partners which Defence had not commenced procurement for.  

While Defence’s “preference is to appoint one entity to perform the Strategic Partner role and another entity the OCM Partner role”, suppliers are able to apply for both roles. However, to ensure the independence of each delivery partner, Defence has indicated that it may exclude appointing suppliers to the roles if they have already been shortlisted as potential SIs, or intend to use “resources”, including subcontractors, which will be shared with an entity that has been shortlisted to perform SI.

The Strategic Partner will provide strategic professional advice about the program and manage and coordinate the SIs and other delivery partners, but Defence “will retain ultimate decision making authority.” The OCM will support user acceptance testing and overall end user experience.

Defence is proposing an initial six-year term, with the option to extend for a further four years.

Defence INSIGHT is expected to help the agency realise the One Defence business model, outlined in the First Principles Review which called for consolidation and standardisation across the information management functions of Defence.

The Integrated Investment Program, which was released alongside the 2016 Defence White Paper, has outlined the allocation of $1-2 billion towards an ERP system/service between 2016 and 2025.

500 finance, logistics, procurement, engineering and maintenance applications, including 50 large, centrally managed applications, have so far been identified across the department. Defence estimates “that approximately 80% of the large applications and between 90-95% of the smaller applications are candidates for replacement as part of the Defence ERP Program.”

Submissions to the RFT close 28 July 2016.

Related Articles:

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Defence reveals $1 billion ERP program delivery plan

Defence calls on SIs for $1b ERP transformation

Defence White Paper reverses years of ICT neglect

Suppliers get first look at Defence ERP plan

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

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  • Defence