5. Alternate designs or delivery pathways
Noting the new APS ERP approach is underpinned by the principles of choice, market competition, and affordability, the Panel recognises the cost of ERP upgrades (as a core underpinning capability of all government entities) can be prohibitive for some entities.
As a mechanism for reducing ERP development and maintenance costs, alternate designs and pathways could include:
- Componentisation of ERP capabilities.
- While the GovERP solution was not originally conceived with componentisation in mind, there was consideration given to implementing an iterative go-live approach, indicating that some level of modularisation may be feasible.
- In considering a modular approach to ERP delivery, the Panel considers maintaining a clean or common core solution across entities would help maximise ERP uplift success. This approach still provides opportunities for greater complexity and entity-specific customisation as solution add-ons at the ERP edge (i.e. the development of unique or customised requirements using integration techniques that leave the ERP itself unmodified.) o The Panel notes substantial work needs to be completed to achieve true modularisation, such as establishing commercial agreements, hosting solutions, completing components, and adhering to data standards. As such, while treating each capability as a separate reusable component is possible, the cost-effectiveness of this has not been confirmed.
- Considering the sequencing of ERP uplifts to focus on like-entities.
- Given the scarcity of resources available for ERP uplifts, there is still merit in pursuing economies of scale from grouping ERP services. Rather than pursuing a whole-of-government, one-size-fits-all approach (or conversely if the divergent requirements of the different agencies make instances for each entity critical), the Panel considers the grouping of entity cohorts with like needs warrants consideration and support.
- This grouping could be pursued based on portfolio, entity size, purpose, ERP needs, or other similar characteristics.
- The Department of Finance’s work to support a small-entity solution, may help to identify next steps for a collective or group-based approach.
- Considering the scope and scale of ERP uplift projects to focus on smaller initiatives with lower delivery risks and faster onboarding.
- DTA analysis through its Assurance Framework (see note below) highlights that larger-scale, higher complexity digital and ICT projects present a heightened delivery risk. Scoping ERP uplift projects into smaller staged initiatives delivered over shorter timeframes may help to reduce the risk of large-scale digital failures.
Note: The DTA is currently tracking 103 in-flight projects across 35 agencies. Of the 13 digital and ICT projects escalated for Ministerial attention over the period August – October 2023, nine were large-scale, flagship investments that represented some 43.1 per cent of the total value of all in-flight digital investments.
Key observation 5:
GovERP was envisaged as a single, whole-of-government technology hub. Componentisation of each capability for potential reuse is possible but has limited commercial effectiveness. Grouping of like entities may help to achieve economies of scale without the complexity of pursuing a whole-of-government, one-size-fits-all approach. Further, focussing on smaller-scale projects over shorter timeframes may help minimise ERP uplift delivery risks.
The new ERP Category under the Software Marketplace Panel, coupled with the Department of Finance’s work to support a small-entity solution, may help to identify next steps for a collective or group-based approach.
Recommendation 5:
Where possible, future ERP uplifts should group entities of similar complexity and scale (not necessarily aligned to portfolio, organisation or other corporate service provision arrangements), to help achieve economies of scale without the challenge of pursuing a whole-of-government approach.