NSW has opened up its Enterprise Resource Planning (ERP) marketplace by establishing a separate ERP category in the ever-expanding ICT Services Scheme. The move comes 19 years after the first mandatory procurement arrangements were put in place for ERP systems in NSW, as part of the Government Selected Application Systems (GSAS) common use contracts, which had been renewed approximately every four years since that time.
Minister for Finance and Services, Dominic Perrottet said the move to establish a new category for ERP ‘as a service’ will reduce ERP costs for agencies because multiple agencies can access services. He said it will also make it easier for suppliers by removing the need to register across multiple categories where “it was difficult for suppliers to highlight the full range of services they could offer.”
However, two of the four most recent GSAS ERP contracts continue to exist.
SAP contract 2601, “for perpetual software licenses with a right to purchase such licenses for a period up to 5 years” and which commenced in March 2008, does not expire until March 2023.
Contract 607, with Objective Corporation and Oracle as the listed suppliers, commenced on 31 May 2013 and will expire on 31 May 2016, with 2 twelve month extensions listed as possible. This contract notes that “in keeping with the NSW Government ICT Strategy, it is an interim arrangement as the NSW Government transitions to the adoption of software as-a-service”. Among its other provisions, it caters for “transitioning of procurement from licensed software models to as-a-service models”.
In 1999, the GSAS objectives were articulated as being to “simplify the selection process for appropriate solutions at the agency level and leverage from the sector’s implementation experience. Cost savings are also achieved through economies of scale.”
However the economy of scale objectives were difficult to realise due to the degree of customisation that occurred to the platforms, and the fact that some agencies regularly upgraded their software, while others did not, leading to version incompatibility issues. The arrangements also froze out new competitors, with the final GSAS ERP listing just Oracle and SAP as platforms, and provided for separate additional panels for Oracle and SAP ERP services.
“The first Category Q sub-categories to be released are:
- Q01: Professional Services- includes the provision of strategic analysis and planning, business process management, transition and transformation, business analysis, modelling, design and architecture, development, testing, data migration and conversion (ETL), organisational and change management, systems integration, performance and management, and benchmarking.
- Q01PTa: Services aligned to the NSW Standard Government Business Processes - suppliers who have been successfully prequalified for Q01 and have been accredited in incorporating the NSW Government Standard Business Processes into the design and delivery of their products and services to government.
- Q02PTr: Human Capital Management (HCM) and eRecruitment - includes full suite HCM and stand-alone eRecruitment products provided by product owners and/or channel partners, as established by the requirements of the Public Service Commission market engagement process.”
Prequalification for Category Q is via the standard application process through the NSW Government eTendering website, and the existing sub-category M03 for ‘Systems and Solutions, Services’ has been amended to exclude references to ERP. Suppliers registered for M03 are being contacted by OFS to be advised of the changed arrangements.
Machinery of government changes in NSW have continually thrown into high relief the degree to which the GSAS strategy failed to achieve its objectives.
When the NSW Department of Finance and Services (DFS) was established out of the Department of Services, Technology & Administration (DSTA), Land & Property Information (LPI), and the Office of State Revenue (OSR), it had three SAP systems (for both finance and HR) as well as OSR’s Masterpiece system for Finance and Chris21 platform for HR.
Current projects in NSW aimed at ERP platform rationalisation include:
- NSW Trade & Investment’s $14 million project to consolidate 16 agencies into one SAP cloud platform (Business ByDesign);
- Transport for NSW’s January 2014 $70.4 million contract with Deloitte for the consolidation of its ERP systems.
- A $13.2 million contract was also signed with Ernst and Young for business transformation and change management services; and
- BackOffice Associates was awarded a three year $12.8 million contract to migrate data from the array of existing systems into the consolidated ERP platform.
The Minister has also announced that the Corporate and Shared Services Government Process Standards,compliance with which is a pre-requisite for admission to Category Q, will be available to all potential contractors, “to enable suppliers to tailor their solutions to meet Government needs."
“It will make the system fairer for both large and small suppliers. Previously these standards were only available to those who had a contract with Government,” the Minister said.