Enterprise Resource Planning (ERP)

Definition

Enterprise Resource Planning (ERP) is the application or group of integrated applications that allows organisations to manage back-office corporate services.

Purpose

Traditional corporate services undertaken by Commonwealth entities are generally underpinned by the following core business processes/capabilities, and supporting (overarching) governance, risk, and compliance:

• Finance – budget to report and revenue to bank processes 
• Human Capital Management – hire to retire of staff 
• Procurement – procure to pay processes 
• Travel and Expense Management – travel planning, expense reimbursement, and relocation 

While these capabilities underpin all entities' ERPs, these systems are commonly extended and customised to meet an entity's specific needs and complexity. Examples of capabilities in a more complex ERP include: 

• Order to Cash or Sales and Distribution Management  
• Asset Management 
• Real Estate Management 
• Production Planning 
• Grants Management 
• Treasury Management 
• Warehouse Management 
• Logistics Management 
• Reporting and Analytics Management 
• Portfolio, Program, and Project Management 

As with other common capabilities, there are many variants on how ERP technology solutions can be deployed. They include but are not limited to the following: 

• Software as a Service (SaaS) for micro-scale ERP solutions that entities can subscribe to use. These are mostly used by entities in the same shared technology platform, where they have very limited capacity to configure how the software works, and generally only support simple business capability models such as those only needing the core business processes in their standard form.  
• SaaS for mid-scale ERP solutions that are subscription-based and generally have a higher level of configuration and customisation for the entity to allow for these services to extend to more complex business functions, allowing integration with third-party or non-core ERP solutions, and handle moderate business capability models.  
• Enterprise-scale cloud ERP solutions that can be built very specific to the entities (or group of entities) and can support more complex business capability and IT operating models. In SaaS offering, the key identifier is that a provider, outside of government, provides the software and technology layer, which they are contractually responsible for designing, implementing, maintaining, and supporting it. In private cloud offering, the provider involvement is limited as the entities have greater controls over the management of the ERP solutions.   
• Government Platform as a Service (GPaaS), a combination model where government acts as the platform provider and controls the design, implementation, maintenance, and support of the combined ERP services. 

The micro-scale solutions generally only support simple business models such as those only needing the core business processes in their standard form. The mid-range solutions can handle more complex business models, but generally only with a small number of variations and generally in a single company structure. The enterprise scale solutions can support all variations and can also support an entity with complex hierarchy management processes such as consolidations and eliminations.  

Please refer to the Reuse Standard for further information on these deployment methods and their applicability. The new ERP approach, however, will keep supporting existing arrangement, including those that will be out of support in the near future until they transition into a new one. 

Objective

The objectives of this Australian Government Architecture content are to:

• Ensure Non-corporate Commonwealth Entities (NCEs) can implement efficient and effective ERP systems, by way of implementing solutions aligned to their common and unique needs and in line with whole of government standards.
• Ensure that NCEs can derive, where suited to these unique needs, benefit from preceding investment via shared service models, repurposing of existing cloud implementations, or the leveraging of existing patterns and learnings.