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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 government corporate services undertaken by agencies are generally underpinned by four core business processes: plan-to-report; hire-to-retire; source-to-pay; and governance, risk, and compliance.

While the four processes underpin all agencies, the complexity of Government often means that ERPs are required to be extended and customised to meet all the agency’s needs. Other examples of extended capability include order-to-cash, asset management, real estate management, production planning, grants management, treasury management, warehouse management, logistics management, reporting and analytics, and integration services.

ERPs come in many different forms from micro-scale, commercial off the shelf systems, through to mid-range solutions and large-scale enterprise solutions. The micro-scale services generally only support simple business models such as those only needing the four core business processes in their standard form. The mid-range solutions can often 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 complex company hierarchy management processes such as consolidations and eliminations.

There are many variants on how ERP technology solutions can be deployed. They include:

  1. Commercial Off the Shelf (COTS) for micro-scale ERP that are locally installed on agency computers, often with a simple file sharing extension to send and receive business documents.
  2. Software as a Service (SaaS) for micro-scale ERP that businesses subscribe to use. These are mostly used by many different organisations in the same shared technology platform, and they have very limited capacity to configure how the software works.
  3. SaaS for mid-scale solutions that are also subscription-based but they generally have a higher level of configuration and customisation for the organisation to allow for these services to extend to more complex business functions and handle moderate scale. Most often, these mid-scale solutions are only available as a SaaS offering as it is the volume of subscriptions that is the key revenue driver for the providers.
  4. SaaS for enterprise-scale solutions that are also subscription based but are very specific to the organisations (or group of organisations) that they are servicing. Often this is what is called a “private cloud offering.” The key identifier here is that a provider, outside of government, provides the software and technology layer which they are contractually responsible for designing, implementing, maintaining, and supporting. SaaS at an enterprise scale are typically defined by high enrolment numbers, and implementations should support high-volume, low-cost unit rates or high-cost specialist transactions, and support multiple company consolidation. Under this model, the scale of enrolments supports the provider’s commercial needs.
  5. Government Platform as a Service (GPaaS) is a combination model where government acts as the platform provider and controls the design, implementation, maintenance, and support of the combined ERP services. In this model, government may make use of specific SaaS services from enterprise-scale providers while also utilising Infrastructure as a Service (IaaS), or on-premises (own infrastructure) solutions to deliver the ERP. The key identifier here is that government is making the decisions on the implementation, the frequency of maintenance and support, and other functionality or lifecycle management. It is a strictly private to government arrangement that, similar to SaaS for enterprise-scale solutions, must support high-cost, specialist transactions and may support high-volume, low-cost unit rates.

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.

Policy Elements

Policy:
POL12
Enterprise Resource Planning (ERP) Policy Mandate:
Endorsed
Status:
Core
  • Determine the complexity of the entity to determine the approach and technology decision for the ERP services. 

    An entity should assess their attributes, including complexity, in order to ensure an ERP decision suited to their unique requirements.

  • Align to the government’s APS ERP approach via the principles of Affordability, Choice, and Contestability. 

    In self-assessing individual ERP solution needs, entities should align to the APS ERP approach and its objectives.

  • Determine if an existing ERP within a shared service offering is suitable before implementing new instances.

    Entities should assess existing shared service offerings against their unique needs prior to commencing new implementations. The Department of Finance will support entities to identify technology uplift requirements to maintain cost-effective and up to date ERP solutions for entities of about 800 or less ASL (Average Staffing Level), and will provide policy support to all entities on navigating the approach.

  • Identify ERP reuse opportunities. 

    Maximise re-use of data, process, systems, and contracts in delivery of commonly utilised corporate services, and collaborate across Government to identify opportunities to achieve efficient and effective ERP uplift.

  • Utilise Whole-of-Government contracts and panels to acquire ERP products and services. 

    Procure services related to ERP uplift and integration through the DTA’s Digital Panels or Whole-of-Government contracts.

  • Ensure the ongoing viability of ERP solutions. 

    Agencies will ensure that their selected ERP solution, irrespective of reuse of existing investment, is supportable, affordable, secure, and fit-for-purpose.

Domains

This capability is part of the following domain.
DOM4

Business Reference

Policies

The following policies have requirements that impact this capability.
Mandate: Endorsed
Status: Core

Standards

The following standards support development of digital solutions in this capability.
ERP solutions relate to the applications, systems and processes that support commonly used corporate functions. When implemented well, ERP solutions can increase productivity, efficiency, accuracy, visibility, and reporting. When not implemented in line with the organisational needs, however, these…

Designs

The following designs include examples of how digital solutions in this capability can be delivered.
GovERP has been repurposed (and renamed Services Australia ERP, or SA ERP) for use by Services Australia, and any entities who choose to use it. GovERP was planned to provide SAP-based back-office services including financial, human resources, and procurement services and reporting as a common…
A program of work to replace the DVA’s financial management system with a GovERP platform and other enhancements.
PEMS (Parliamentary Expenses Management System) is a secure online portal for parliamentarians and MOP(S) Act employees to manage their office and travel expenses and perform HR and payroll tasks
Whole-of-government arrangement with SAP to make it easier for Australian Government agencies to buy SAP products and services. NOTE : Current agreement is currently under renegotiation. Please contact DTA Procurement SAP portfolio owner for guidance on supply arrangements
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