2. Background
2.1 Assessment terms of reference
To support Commonwealth entities to implement future cost effective ERP uplifts, the independent reuse assessment has focused on:
- leveraging work already completed
- drawing out lessons learned, and
- uncovering opportunities for reuse of Service Australia’s ERP to support the new APS ERP approach.
The Assessment’s terms of reference, as detailed at Appendix A, sought to:
- Evaluate and understand what has been delivered to date.
- Evaluate and understand what has been spent to date against what has been delivered.
- Evaluate and understand the suitability of delivered outputs for reuse across the Commonwealth.
- Contribute standard designs, patterns, and other related guidance to the Australian Government Architecture.
- Articulate recommendations and guidance for reuse including information that will support entities to plan future ERP uplifts.
- Advise on potential costs, risks, and associated benefits, to carry out any remaining work envisaged by Services Australia to complete GovERP.
- Advise on potential ongoing costs to entities from reusing GovERP, if reuse can be supported.
- Identify alternative designs and pathways that might provide more cost-effective options for any remaining work.
- Identify any existing ‘readymade’ deployment configurations deemed suitable to allow direct onboarding of entities.
2.2 Assessment approach
2.3 GovERP project history
The Shared Services Program, led by Finance, commenced in 2014 with approval from the Secretaries Board. In 2019 the Secretaries Board agreed that Finance prototype GovERP, the enabling technology for the program.
- The GovERP Program aimed to consolidate and standardise common transactional corporate APS processes and services aiming for cost-effectiveness, scalability, and advancing the one-APS vision, all while enhancing Australia’s digital capability.
- The platform was to replace a wide range of disparate systems across government (including the ERP systems then in use by shared services hubs at Finance, the Department of Foreign Affairs and Trade, the Department of Home Affairs, Services Australia, and the Department of Industry, Science and Resources) with a single across-government platform.
On 14 September 2020, the Shared Services Steering Committee defined a suite of functional (and other) capabilities as the minimum necessary for a whole-of-government GovERP model. These 54 functional capabilities were grouped by ‘value streams’, notably: human resources (Hire to Retire), procurement (Procurement to Pay), financial (Budget to Report and Revenue to Bank), as well as travel and expense management. These are outlined at Appendix F.
2.3.1 GovERP in Services Australia
In July 2021, the GovERP Program moved to Services Australia. Services Australia’s GovERP program was intended to comprise a SAP based core (see Reference 1) with a series of software solutions able to be added to provide specific functionality.
The previously defined suite of 54 functional capabilities, considered to be the minimum necessary for a whole-of-government GovERP model, was revised in consultation between Services Australia and its nominated client for initial onboarding (AGD). This revised minimum viable product (MVP), also outlined at Appendix F, reflected a more targeted suite of 39 ERP functional capabilities.
For the purposes of this report, references to MVP1.0 reflect the original Shared Services Steering Committee-defined scope of 54 functional capabilities for whole-of-government purposes, and MVP1.1 refers to the revised scope of 39 functional capabilities intended for initial onboarding of AGD.
2.3.2 New APS ERP approach
In November 2023, the Minister for Finance announced the scaling back of the broader GovERP program, concurrently introducing an updated program titled “A new approach for back-office functions in the Australian Public Service.” (see A new approach for back-office functions in the Australian Public Service.)
The new APS ERP approach replaces the Shared Services Transformation Program and sets the strategic direction for how the APS will manage its ERP corporate systems, underpinned by the principles of choice, market competition, and affordability.
The new APS ERP approach reflects a move away from highly aggregated demand for shared services (premised on a whole-of-government ERP system) to more distributed models with some areas to be a hub or provider, but in most cases letting entities directly use ERP capabilities themselves.
On 5 January 2024, AGD advised it no longer intended to proceed with onboarding to GovERP (Services Australia 2024).
In February 2024, the related GovERP governance committees were dissolved (Services Australia Chief Information Officer 2024). GovERP was also renamed to SA ERP to reflect the APS ERP approach no longer pursuing a wholeof-government build. It was intended that GovERP designs be repurposed for use by Services Australia, and any entities who choose to use it, pending the outcomes of this reusability assessment (see A new approach for back-office functions in the Australian Public Service). In subsequent correspondence of 26 April 2024, the Hon Bill Shorten MP advised, Services Australia has refocussed efforts to determine the functional requirements of the ERP solution for Services Australia”…and “[t]he remaining [GovERP] budget [of $21.8m] will be used to continue sustainment of the current ERP solution” (see Reference 4).
The Panel recognises that multiple APS entities will likely be coming forward soon for ERP uplifts as the need for well-functioning ERP capabilities across government has not abated. These uplifts reflect core underpinning capability of all government entities. As such, formal cross-APS governance structures are needed to ensure common approaches and limit customisations as much as possible.
Guidance from senior executives, such as Secretaries Data and Digital Committee (SDDC), is particularly important in anticipation of removal of the government’s existing investment moratorium on ERPs.
Key observation 1:
The shifts in GovERP’s scope, changes in ownership, and limited stakeholder consistency (as evidenced by multiple changes to the entities identified for initial onboarding) have culminated in a program that has not delivered as originally intended.
The volatility, and ambiguity in ownership and accountability, has resulted in an underdelivering project. The need for well-functioning ERP capabilities across government has not abated.
Recommendation 1:
- As core underpinning capability of all government entities, ERP uplifts need clear ownership and accountability mechanisms established at both the COO Committee and Secretaries Data and Digital Committee (SDDC) levels, to ensure considered uplift sequencing and to promote common approaches with limited customisations.
- To ensure equitable access to market resources across entities, overarching SDDC governance is needed to support successful ERP uplifts and implementation across government.
References
- That is, GovERP was premised on use of SAP as the fundamental technology building block for the program. The program then envisaged an additional series of software solutions to extended this basic or core functionality, if needed.
- Services Australia, January 2024 DTA Approved Programs Collection (Wave 24) Project Collection Survey Form, January 2024
- Services Australia Chief Information and Digital Officer, email Dissolution of GovERP Programme Board, 5 February 2024
- See Appendix E, letter from Minister of Government Services to Minister for Finance, 26 April 2024.