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Enterprise Resource Planning (ERP) Standard

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 can incur cost and process inefficiencies, duplication of effort, and user dissatisfaction.

The selection of an ERP provider or platform may be influenced by several requirements, including organisational complexity, attributes, and the availability and suitability of existing reusable investments. Beyond these criteria, the hosting, licencing, commissioning, and maintenance (and associated contracts) of any system should be considered.

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

In the least complex organisations, basic ERP processes include:

  1. Financial Management – financial plan to report.
  2. Human Capital Management – hire to retire of staff.
  3. Procurement – source to pay.
  4. Governance – governance, risk, and compliance.

In more complex organisations there are additional processes such as:

  1. Treasury Management – cashflow, assets, and investments.
  2. Asset Management – management of current, fixed, tangible, intangible, operating, and non-operating assets.
  3. Portfolio, Program, and Project Management.
  4. Sales and Distribution Management.
  5. Master Data Management.
  6. Reporting and Analytics Management.

Even within structurally simple organisations there can be diverse levels of complexity within processes, often called process variation. Process variation can be managed in three ways:

  1. Configuration – A way of modifying the process through modifying data or settings directly within the technology solution.
  2. Customisation – Creating or extending the technology solution through altering or adding code, features, or data.
  3. Integration – Where varied processes are executed outside of the ERP technology solution, with the outcome then returned to and recorded within the ERP solution.

Governmental APS ERP approach

The Shared Services Transformation Program has been replaced with an APS ERP approach, giving all non-corporate Commonwealth entities autonomy and choice to modernise ERP solutions using technology and vendors that best meet entity needs and budgets.

These entities will be able to self-assess individual ERP solution needs, and if required, bring forward investment proposals in-line with the Budget Process Operational Rules (BPORs). Entities are encouraged to collaborate across Government to identify opportunities to achieve efficient and effective ERP uplifts.

The approach expects alignment with the objectives of:

  • Affordability: ERP systems are affordable to acquire, operate and sustain and consider re-use in their development
  • Choice: Entities have autonomy to select contemporary technologies that best meets entity needs.
  • Contestability: APS leverages competition in the ERP market to improve service offerings and promote innovation.

Entities who were previously aligned to Government Enterprise Resource Planning (GovERP) can consider whether the Services Australia ERP (SA ERP, formerly GovERP) solution meets entity needs. Any future SAP-based investment proposal must consider reuse of the SA ERP solution and make a sound case for additional investment where this existing capability is unsuitable.

The approach does not prevent entities from seeking or continuing to receive transactional processing services from existing hub providers.

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

The Department of Finance will support entities identify technology uplift requirements to maintain cost-effective and up to date ERP solutions. While this initiative is specifically aimed at smaller entities of about 800 or less ASL (Average Staffing Level), who have smaller corporate teams and budgets and thus face challenges when attempting to undertake significant technology modernisations, the Department of Finance will provide policy support to all entities on navigating the approach.

Entities who are frequently affected by Machinery-of-Government (MoG) changes may be encouraged to align technologies, to facilitate the efficient exchange of information and simplify future MoG processes.

Identify ERP reuse opportunities

Numerous instances of ERP solutions and platforms exist across government. Several of these are suitable for reuse through either shared service models, repurposing of existing cloud implementations, or the leveraging of existing patterns. These patterns are available to be consumed through existing Whole of Australian Government Arrangements and inter-government Memorandums of Understanding (MoU).

Specific elements of ERP solutions that benefit from standardisation and can be reused include the data formats for payroll data, general ledger, accounts payable and receivable processes, and expense management.

An independent assessment of achievements from the investment in GovERP will be undertaken, with a report and reference products to be made available through the AGA by June 2024. This assessment will support entities’ future cost-effective ERP uplifts by way of clear identification of reusable assets deriving from GovERP.

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

The Commonwealth has negotiated terms and conditions through Whole-of-Government agreements and panel arrangements that consider value for money, legal protections, security and confidentiality provisions, availability and performance requirements, and warranty conditions. Agencies should first make use of these arrangements and, if not suitable, contact the Digital Transformation Agency (DTA) prior to any individual approach to market for ERP services.

The DTA will test the market and establish an ERP Products and Service solutions category on the Software Marketplace (expected by mid-2024). Once established, use of the ERP Products and Service solutions category on the Software Marketplace will be mandatory for non-corporate Commonwealth entities.

The Corporate Services Investment Moratorium has been updated to reflect the new APS ERP approach and will remain in place until the ERP Products and Service solutions category on the Software Marketplace is established and pending agreement by the Prime Minister and Treasurer.

Ensure 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 through continual improvement of processes, and features, data, security, technology, skills, and cost. This includes checking the contractual arrangements, MoU currency, and AGA design state.

Capabilities

This standard supports digital solutions in the following capability.
CAP24

Enterprise Resource Planning (ERP)

Policies

This standard assists in meeting the requirements of the following policies.
POL12

Enterprise Resource Planning (ERP) Policy

Designs

The following designs show how to achieve the intent of this standard.
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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