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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 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.

Policy Elements

Policy:
POL12
Enterprise Resource Planning (ERP) Policy Mandate:
Endorsed
Status:
Core
  • Align to the government’s APS ERP approach via the principles of Affordability, Choice, and Contestability

    In self-assessing individual ERP solution needs, entities are to align to the APS ERP approach and its objectives. Refer to the new The new APS ERP approach | Department of Finance.

  • Notify the DTA of any ERP investment activities

    Inform the DTA of intended ERP investment activities, through the digital investment pipeline data collection (the collection that supports the Digital Investment Overview (DIO) and Integrated Digital Investment Plan (IDIP)), to enable more coordinated sequencing of ERP investments and to maximise cross-government reuse opportunities. 

  • Determine the complexity and unique needs of the entity to determine the approach and technology decision for ERP services

    Assess the entity's attributes, including complexity and integration needs, to ensure an ERP decision suited to their unique requirements.

  • Align to the ERP technical standards

    With organisational complexity and specifics in mind, conduct work to align following considerations/works to the ERP technical standards, grouping functions around the value streams such as Finance, Human Capital Management, Procurement, and Travel and Expense Management.

  • Determine if an existing entity ERP solution, or an ERP solution within a shared service offering, is suitable before implementing new instances

    In line with the Digital and ICT Reuse Policy | Digital Transformation Agency (dta.gov.au), entities are to assess existing shared service offerings, and potential for reuse of other solutions presently available in government, against their unique needs prior to commencing green fields implementations

    The Department of Finance will support smaller entities to understand ERP uplift requirements and assist in choosing cost-effective solutions. A smaller entity is defined as having around 800 or less ASL, and with straightforward (or less complex) ERP requirements.

  • Identify further ERP reuse opportunities

    Maximise reuse 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.

    The DTA has a repository of artefacts developed by the Commonwealth that can be accessed by entities to help identify reuse opportunities. Contact architecture@dta.gov.au to request access.

  • Utilise whole of government contracts and panels to acquire ERP products and services

    Use of the ERP Products and Service Solutions category on the DTA's Software Marketplace is mandatory for Non-Corporate Commonwealth entities when purchasing ERP solutions. Procure services related to ERP uplift and integration through the DTA’s Digital Panels or Whole-of-Government contracts.

  • Customise only as essential

    Wherever possible, entities should ‘adopt rather than adapt’, using ERP technologies as available commercially off the shelf to the furthest extent possible.

  • Ensure the ongoing viability of ERP solutions

    Entities will ensure that their selected ERP solution, irrespective of reuse of existing investment, is supportable, affordable, secure, and fit-for-purpose, and moreover ensure that it is itself reusable in line with the Whole of Government ICT Reuse Policy.

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, these can…
Enterprise Resource Planning (ERP) Finance capability is enabled by the Financial Management Information System (FMIS); and refers to software and systems that streamline financial operations within an entity’s broader ERP system. ERP Finance enables two key corporate value streams: Budget to…
Human Capital Management (HCM) capability provides the Hire to Retire (H2R) value stream in the Australian Government Architecture (AGA)’s whole of government context. H2R is the human resource management lifecycle which manages and supports the course of an individual’s career within the APS.…
Procurement within the Australian Public Service (APS) is enabled through the Procure to Pay (P2P) value stream. P2P refers to the end-to-end process of acquiring vendor services and products, from preparing RFTs/RFQs through to payment, facilitated by an integrated ERP system.  The P2P value…
A Travel and Expense System provides Travel and Expense Management (TEMS) in the Australian Government Architecture (AGA)’s whole of government context. TEMS capability allows the APS to streamline, automate, and effectively manage the complexities associated with travel planning, expense…

Designs

The following designs include examples of how digital solutions in this capability can be delivered.
Ongoing works related to what was previously built under GovERP have 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…
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
The Enterprise Resource Planning (ERP) Finance solution developed originally as part of GovERP is hosted on S/4HANA on Services Australia’s Private Microsoft Azure Cloud, but could be copied and hosted on any equivalent cloud solution.  An existing Infosec Registered Assessor Program (IRAP)…
Under the whole of government ERP solution SAP’s SuccessFactors was a software as a service (SaaS) solution developed for the H2R value stream. SAP SuccessFactors is a suite of human resource management system (HRMS) products that connect core Human Resource (HR) and payroll, talent management,…
The GovERP P2P value stream solution is hosted on S/4 HANA on Services Australia’s Private Azure cloud, however, can be copied and hosted on any equivalent cloud solution. Integrations have been built into GovERP FMIS and SAP SuccessFactors for the HCM design. However, integrations have not yet…
Within the GovERP initiative Expense8, a software as a service (SaaS) solution, was identified as the platform of choice for implementing Travel and Expense Management (TEMS) capability.  Expense8 is owned by 8common, and is a SaaS solution for travel, expense, and credit card management. It…
The Central Budget Management System (CBMS) manages the flow of financial information between Finance and Commonwealth Government entities to facilitate cash and appropriation management, preparation of budget documentation and financial reporting. Users are required to submit an Access Request…
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