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Enterprise Resource Process (ERP) Procurement Standard

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 stream encompasses the comprehensive process of managing purchasing and contract lifecycles for acquiring goods and services. P2P covers sourcing, requisition, order processing, payments, and reporting within the framework of Australian Government regulations, policies, and procedures. It involves the coordinated activities of multiple stakeholders including Commonwealth entities, vendors, and financial management entities, facilitated by an integrated ERP solution. 

P2P value stream in Commonwealth entities enhances operational efficiency, fiscal responsibility, and governance in procurement processes, ultimately contributing to the effective delivery of public services and the achievement of government objectives. 

Procure to Pay (P2P) can be implemented through a number of commercial platform solutions. These platforms may be discovered in multiple ways such as: BuyICT; whole of Australian-Government contracts; and entity implemented solutions underpinned by platforms. 

Procure to Pay (P2P) value stream

The Procure to Pay value stream is realised through the following capabilities: 

Purchasing

Management of purchasing which is an entity's attempt to procure goods or services in line with Commonwealth guidelines, primarily low complexity procurement as opposed to high value or complex procurement activities.

Processes and Definitions

  • Purchase Goods and/or Services which includes the creation of purchase requisitions, defining goods and/or service details, pricing, delivery schedules, and allocation of costs. It includes the Delegate review and approval process and the creation and transmission of a Purchase Order to a Supplier.
  • Confirmation of goods or services received, including management of goods receipts and return.

Report Procurement Activities

The ability for an entity to comply with mandatory procurement reporting requirements to government, and other accountable authorities within government. This includes gazettal and reporting through to AusTender.

Processes and Definitions

  • Manage Procurement Framework Reporting involves publishing and reporting for relevant entities under the Commonwealth Procurement Framework and other government policies.
  • Manage AusTender (Gazettal) to report contract notices, new or amended, on AusTender where the expenditure meets the reporting thresholds as defined in the Commonwealth procurement Rules (CPRs).
  • Run & Report Procurement as per Legislative Requirements, as required, including process for delineating and isolating data where needed.
  • Manage Senate Order Reporting to report to Senate all Contracts formed through Procurement valued at or above $100,000.

Contractor Management

Management of outsourced work and a contingent workforce, from procuring resources and services, managing ongoing activities such as time sheeting and invoicing, through to managing the off-boarding of resources at the fulfilment of the contract.

Processes and Definitions

  • Manage Statement of Work (SOW), including drafting of terms and conditions, clauses, pricing, term; review, approval, and publishing of the SOW.
  • Manage On-boarding to enter contractor into various work systems, approval; process inclusive of granting hardware, software, and facilities access.
  • Manage Timesheets to enter time as per SOW pricing and conditions; approval of timesheets.
  • Manage Recipient Created Tax Invoice to automate and facilitate timely payment of approved contractor time, as per terms, conditions, and pricing reflected on SOW.

Inventory Management

The supervision of non-capitalised assets (inventory) and stock items. As a component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale.

Processes and Definitions

  • Manage Physical Inventory including developing stocktake cycles, conducting stocktake and managing discrepancies. Stocktake of physical inventory may be conducted using bar-coding and scanning technology.
  • Perform Inbound Processing which involves the physical receipt of goods from a Supplier, quality checking and warehousing.
  • Perform Outbound Processing which involves the physical despatch of goods including order picking, packing, quality check and despatch.

Sourcing

Management of Sourcing processes in line with Commonwealth Procurement Guidelines.

Processes and Definitions

  • Manage Planning of Procurement to identify suitable Goods and/or Services required to meet a need, and the entity activities to determine a Procurement Method, including defining goods and/or services, determining the Procurement Method and developing a Procurement Plan.
  • Manage Sourcing– Open Approach to Market, whereby a panel (local or WoAG) is not available, and therefore an open market approach is used.
  • Manage Sourcing – Panels whereby goods and/or services are sourced using WoAG and Agency Supplier Panels.
  • Maintain Panel Agreements including creation and sharing of Agency Supplier panel agreements.
  • Manage Purchase Goods and/or Services Low Value to source goods under a nominated value threshold; supplier quotes may or may not be required.

Supplier Management

Management of supplier record and collection of relevant supplier data, to enable reporting and management of contracted service and goods providers.

Processes and Definitions

  • Manage supplier registration & approval to register supplier details to enable them to respond to RFX and supply Goods and/or Services to an entity.
  • Manage Supplier Master Data, post supplier-registration, to manage the setup of new Suppliers and amendments to existing Supplier master data, including verifying Supplier information, qualifications and ensuring no duplication of Supplier records.  
  • Manage Supplier Performance, including internal and external evaluation processes, mapped to KPIs (suppliers, agencies).

Asset Management

Captures the systematic management and approach to the governance and realisation of value of things that the entity owns or is responsible for. Note this includes both the digital and physical location and information surrounding the asset.

Processes and Definitions

  • Manage Asset Master Data includes create and maintain the master data for asset, equipment.
  • Manage Acquisition and Onboarding of Assets includes acquisition through purchasing and through projects, and the content management of technical images, warranties etc.
  • Manage Maintenance Planning and Scheduling includes planning, scheduling and predictive maintenance and service.
  • Perform Maintenance of Assets includes execution of work orders and jobs.  
  • Manage De-commission and Disposal of Assets includes de-commissioning and retirement along with disposal of assets.

e-procurement

Concerned with the management, linkage to or standing up of Business-to-Business (B2B) networks and processes. Includes Catalogue Integration with B2B Network Providers. Provides the ability to manage an end-to-end procurement on the system without having to resort to manual tools and paper forms.

Processes and Definitions

  • Manage Catalogue Purchasing (Hosted, Punch-Out) using internal catalogues available for user selection, and external (punch-out) catalogues for more complex categories.
  • Manage e-Invoicing either received from external source, or loading of e-invoice to internal system.
  • Manage transactions with Suppliers including contracts, purchase orders, service entry-sheets, invoicing.

Contract Management

Contract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. Includes processes related to negotiation, management and termination  related to the effective delivery of contracted services and goods.

Processes and Definitions

  • Manage Contract Negotiations including goods/services, pricing, payment terms, discounting.
  • Maintain Contract and Contract Terms, including follow-up to contract negotiation, process for creating and approving contracts, and embedding contract terms to ensure internal usage and compliance with negotiated agreement.
  • Manage Contract Amendments, as required, including value amount, quantity, and/or item and service amendments; delegate approvals, activation in-system.
  • Manage Non-Procurement Contracts, for example managing Grants, which may require a payment.

WoAG Central Purchasing

Supports the usage of Whole of Government Procurement arrangements including coordinated and cooperative procurements.

Processes and Definitions

  • Manage WoAG Supplier Panels includes creation and sharing of panel agreements.
  • Manage WoAG Contracts includes follow-up to contract negotiation, process for creating and approving contract, and embedding contract terms to ensure internal usage and compliance with negotiated agreement.
  • Manage transactions using WoAG Contracts, including, purchase order, service entry-sheets, invoicing.

Accounts Payable

Manage and record accounting data relating to all vendors. It handles vendor invoices, approvals, payments, and other activities. In addition, Accounts Payable enables the integration and processing of E-Invoices.

Processes and Definitions

  • Manage AP Master Data including creating, changing, and blocking Accounts Payable Master Data.
  • Manage Incoming Invoices enabling the receipt and verification of Supplier invoices, by email or B2B via e-Invoicing.
  • Manage AP Payment Run and Approval involves the activities to determine Supplier invoices due for payment, creation, correction and approval of payment run proposals and submission of payment details to financial institutions.
  • Perform AP Periodic Activities this process includes Supplier interest payments, managing GL reconciliation, and reporting.

Purpose

The P2P value stream capability supports the effective delivery of government programs and services, while safeguarding public funds and promoting good governance. The P2P value stream serves several critical purposes in Commonwealth entities: 

  • Procurement and Contract Management: Facilitates transparent, efficient, and accountable procurement practices while ensuring value for money, ensuring adherence to government financial regulations, policies, and frameworks, like the Commonwealth Financial Management Framework (CFMF) and the PGPA Act. 
  • Vendor Management: Efficient management of vendor relationships, including vendor selection, contract management, and performance evaluation, to optimise supplier partnerships and drive value for money. 
  • Compliance: The P2P capability ensures compliance with government procurement regulations, policies, and standards. By embedding regulatory requirements into the procurement process, such as competitive bidding, contract management, and audit trails, Commonwealth entities can mitigate legal and financial risks associated with non-compliance. 
  • Transparency and Accountability: By standardising and automating procurement processes, the P2P capability enhances transparency and accountability in government spending. It provides visibility into procurement activities, ensuring compliance with government regulations and policies while mitigating the risk of fraud, waste, and abuse. 
  • Cost Savings: The P2P capability helps Commonwealth entities identify cost-saving opportunities through centralised procurement, contract management, and vendor performance evaluation. By leveraging volume discounts, negotiating favourable terms, and optimising supplier relationships, Commonwealth entities can achieve significant cost savings and maximise the value of taxpayers' money. 
  • Efficiency: The P2P capability streamlines the entire procurement process, from requisitioning to payment, reducing manual effort, paperwork, and processing time. This efficiency enables Commonwealth entities to acquire goods and services in a timely manner, supporting the smooth operation of government programs and services. 
  • Integration: Seamless integration with government financial management systems, enabling real-time visibility into procurement data, expenditure tracking, and financial reporting. 
  • Data-driven Decision-making: By capturing and analysing procurement data, the P2P capability enables data-driven decision-making in resource allocation, budget planning, and strategic sourcing. Commonwealth entities can leverage insights from procurement analytics to identify trends, forecast demand, and optimise procurement strategies for greater efficiency and effectiveness. 

Objective

Following the Australia Government Architecture's P2P value stream capability guidance is expected to yield several specific outcomes and benefits: 

  • Efficiency: Streamlined procurement processes reduce manual effort and processing time, enabling the timely acquisition of goods and services. This efficiency leads to faster delivery of government programs and services. 
  • Cost Savings: Centralised procurement and optimised vendor management contribute to cost savings through negotiated contracts, volume discounts, and efficient resource allocation. This maximises the value of taxpayers' money. 
  • Transparency and Accountability: Standardised and automated procedures enhance transparency and accountability in procurement activities. Compliance with government regulations and policies ensures fair and ethical procurement practices, reducing the risk of fraud, waste, and abuse. 
  • Improved decision-making: Data-driven insights from procurement analytics enable informed decision-making in resource allocation, budget planning, and strategic sourcing. This optimises procurement strategies for greater efficiency and effectiveness. 
  • Enhanced vendor relationships: Efficient management of vendor relationships fosters collaboration and trust, leading to mutually beneficial partnerships. This supports the delivery of high-quality goods and services to Commonwealth entities. 
  • Compliance Assurance: Adherence to government procurement regulations and standards mitigates legal and financial risks associated with non-compliance. This ensures that procurement activities align with government objectives and priorities. 
  • Operational Excellence: Integration with financial management systems provides real-time visibility into procurement data, expenditure tracking, and financial reporting. This facilitates better resource management and operational decision-making. 
  • Sustainable Practices: The P2P value stream capability encourages sustainable procurement practices, such as sourcing from environmentally responsible suppliers and reducing waste generation. This aligns with government sustainability goals and promotes environmental stewardship. 

Overall, adhering to the Australia Government Architecture's Procure to Pay value stream capability guidance is expected to result in more efficient, transparent, and accountable procurement processes, ultimately supporting the effective delivery of government programs and services while maximising value for the Australian Government. 

Whole of Australian Government Applicability 

The objective of adhering to the Australia Government Architecture's P2P value stream capability guidance is to achieve the following outcomes and benefits: 

  • Efficiency: Streamline procurement processes to reduce manual effort and processing time, facilitating the timely acquisition of goods and services to support government programs and services. 
  • Cost Savings: Optimise procurement practices to realise cost savings through negotiated contracts, volume discounts, and efficient resource allocation, maximising the value of taxpayers' money. 
  • Transparency and Accountability: Enhance transparency and accountability in procurement activities by standardising and automating procedures, ensuring compliance with government regulations and policies to mitigate the risk of fraud, waste, and abuse. 
  • Improved decision-making: Utilise data-driven insights from procurement analytics to inform resource allocation, budget planning, and strategic sourcing decisions, optimising procurement strategies for greater efficiency and effectiveness. 
  • Enhanced vendor relationships: Foster collaborative and trust-based relationships with vendors through efficient management practices, supporting the delivery of high-quality goods and services to Commonwealth entities. 
  • Compliance assurance: Ensure adherence to government procurement regulations and standards to mitigate legal and financial risks associated with non-compliance, aligning procurement activities with government objectives and priorities. 
  • Operational excellence: Integrate procurement processes with financial management systems to provide real time visibility into procurement data, enabling better resource management and operational decision making. 
  • Sustainable practices: Promote sustainable procurement practices, such as sourcing from environmentally responsible suppliers and reducing waste generation, in alignment with government sustainability goals and environmental stewardship. 

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.
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…
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