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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, 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 entity 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.

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

Entities are to self-assess individual ERP solution needs and can either self-fund or bring forward new investment proposals in-line with the Budget Process Operational Rules (BPORs). 

The APS ERP approach gives all Non-corporate Commonwealth entities (NCE’s) autonomy and choice to modernise ERP solutions using technology and vendors that best meet entity needs and budgets. 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.

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

Notify the DTA of any ERP investment activities

Governance and sequencing of ERP investment is overseen by the Secretaries Data and Digital Committee (SDDC) and Chief Operating Officer Committee. To facilitate Secretaries’ oversight of the ERP investment pipeline, entities are to identify any ERP uplifts intended over the coming years through the digital investment pipeline data collection so that the pipeline can be presented to SDDC as part of the Integrated Digital Investment Plan (IDIP).

The data collection is issued twice annually around the budget cycles but can be updated at any time via email to investment.prioritisation@dta.gov.au.

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

An internal assessment on a Commonwealth entity’s attributes, and therefore requirements, should be conducted to appropriately identify options for ERP services.

In the least complex entities, core ERP processes include:

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

In more complex entities, there are additional processes such as:

  1. Order to Cash or Sales and Distribution Management
  2. Asset Management
  3. Real Estate Management
  4. Production Planning
  5. Grants Management
  6. Treasury Management
  7. Warehouse Management
  8. Logistics Management
  9. Reporting and Analytics Management
  10. Portfolio, Program, and Project Management

Throughout all processes should be considered and standardised governance – governance, risk, and compliance processes. Even within structurally simple entities 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.
  4. Security – Where an entity has high levels of security requirements, this may inhibit the use of some recommended solutions.

Align to the ERP technical standards

Technical standards have been developed in alignment with the four defined value streams:

These standards break these value streams into distinct functional capabilities, and within these nominates key processes that should be enabled by an ERP solution.

When determining and tracking low-level requirements, alignment with these standards should be sought. They should further be utilised in mapping these requirements to reusable designs managed and maintained by the DTA, and in documenting a solution that itself can be made reusable in the future.

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

Numerous instances of ERP solutions and platforms exist across government. Several of these are suitable for reuse through shared service models or repurposing of existing cloud implementations, and this should be considered for suitability before effort is spent on implementing a new ERP solution.

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

Identify further ERP reuse opportunities

Where existing shared service offerings/cloud solutions are not entirely reusable, there may be potential to gain value from the leveraging of existing patterns and other artefacts. 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.

These patterns and artefacts are available to be consumed through the AGA’s Designs library, existing Whole of Australian Government Arrangements, and inter-government Memorandums of Understanding (MoU).

The DTA administers the DTA Process Repository, a repository of technical artefacts that can be accessed by entities to help identify reuse opportunities. Contact architecture@dta.gov.au to request access.

Please refer to the Digital and ICT Reuse Policy and Reuse Standard.

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.

The DTA has established an ERP Products and Service solutions category on the Software Marketplace. Use of the ERP Products and Service solutions category on the Software Marketplace is mandatory for non-corporate Commonwealth.

Entities are to make use of these arrangements and, if considered not suitable, contact the DTA to discuss any concerns.

Customise only as essential

ERP technologies are commonplace. As such, wherever possible, entities should ‘adopt rather than adapt’, using ERP technologies as available commercially off the shelf as much as is possible. Entities should assess the business processes documented within the AGA technical standards and housed in the DTA Process Repository. Leveraging these processes will support driving commonality of corporate processes across the Commonwealth and the efficient development of processes and requirements. Leveraging these processes will support driving commonality of corporate processes across the Commonwealth and the efficient development of processes and requirements. Leveraging these processes will support driving commonality of corporate processes across the Commonwealth and the efficient development of processes and requirements.

Variations to commercial solutions or standardised processes may be required where legislation or legislative instruments outline specific requirements for Commonwealth entities. Where internal policy or processes are resulting in the need for variations, entities should first update the policy or process to eliminate or reduce to the extent possible the variation required.

Where variations to commercial products are required, these are managed through customisations and configurations. Customisations are commonly an enabled feature/ capability of the technology products and have a range of sustainability impacts which need to be considered, including:

  • ongoing cost of technology specialist resources to meet cyclical updates
  • additional testing to ensure variations continue to work sufficiently
  • added complexities with upstream or downstream integrated systems
  • more involved release scheduling planning

These whole of life impacts should be considered which committing to any variations.

Data standards managed by the DTA should be used as a basis for enabling the exchange of data between entities, as well as commonality of reporting across the Commonwealth.

Ensure 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 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.

Entities will further maintain adherence to the second last two principles of the Digital and ICT Reuse Policy:

  • Design and build for reuse – if your proposed investment cannot reuse an existing digital or ICT solution, you must ensure that the service you build, can be reused by other agencies.
  • Enable reuse by others – you must ensure anything you create is shared for others to reuse unless there’s a good reason not to.

Further detail on Reuse considerations can be found in the: Reuse Standard.

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.
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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