Published on the 27/08/2024 | Written by Heather Wright

Axed project has little scope for future use…

A scathing ‘reuse assessment’ for the failed AU$341 million GovERP project has found ‘limited’ reuse opportunities, though business process maps, designs, patterns and related documentation could act as an accelerator for future ERP uplifts.

Designed to provide a common whole-of-government ERP platform based on SAP S/4Hana with complementary edge solutions, the expensive and ambitious GovERP project was dumped in November 2023 when a new ERP approach was announced.

“Considering the current state of ERP capabilities… entities have expressed hesitation regarding reuse.”

That approach saw a move to autonomy, choice and competition, with GovERP to be ‘repurposed’ and renamed Services Australia ERP for use by Services Australia and any other entities choosing to use it.

An expert panel was asked to determine what, if anything, from the initial project could be reused.

Their assessment of GovERP, first touted back in 2016 and with EY winning a $14.5 million contract to be a strategic delivery partner from 2021, is blunt: GovERP’s functional capabilities cannot be reused by entities as they currently stand and further direct investment in the white elephant is not recommended.

System integration and user acceptance testing has not yet occurred for any of the functional capabilities identified, the assessment says.

Of the 30 functional GovERP capabilities developed, 18 have completed functional testing, but none have progressed beyond that to system integration testing, user acceptance testing or production.

Of those that had completed functional testing, nine were human capability management-related capabilities, eight were financial management-related and one was procurement related.

“The ERP solution in its current form is not suitable to meet whole-of-government or Services Australia’s operational requirements,” the report says.

Even if the remaining work to complete the minimum viable product 1.1 is progressed, the objective of a standardised, common transactional corporate service won’t be achieved by GovERP, it notes.

The panel, which included Chris Fechner, chief executive of the Digital Transformation Agency and ANZ group executive for Australia Retail, Maile Carnegie,

The underlying technology stack is no longer current for GovERP’s financial and procurement-related capabilities with a version change released in 2023. Updating to the current versions would be necessary to ensure appropriate functionality, reduce ongoing maintenance and to remain on the upgrade path.

More than $246 million was allocated by Services Australia for the project, with other agencies also contributing to the $341 million cost. Of Services Australia’s cut, $198 million had been spent by the end of 2023 with the Minister for Government Services, Bill Shorten, saying the remaining budget of around $48 million, will be used to continue sustainment of the current ERP system, including licensing and hosting costs.

Alongside dissecting the failures of the project, the report looks at whether anything of value can be salvaged from the project, covering consideration of opportunities to utilise existing technologies that have been built, through to opportunities to leverage existing processes or patterns.

“Considering the current state of ERP capabilities… APS entities have expressed hesitation regarding Tier 1 [use of what has already been built] reuse.”

There is, however, scope to build on existing capabilities with a separate ERP instance – for the right organisations.

The Department of Health and Aged Care has expressed interest in leveraging architectural patterns, documents and decisions for its own ERP upgrade.

“The cost of reusing GovERP capabilities to support ERP delivery in smaller entities with less complex requirements may be a challenge, particularly given the need for strong in-house functionality and technical skills to support delivery and operations,” the report says.

However, leveraging commercial arrangements already in place to their full effect, where applicable, could help offset ERP delivery and operating costs, it notes.

There is also ‘strong demand’ from government entities, including the Australian Taxation Office, Attorney-General’s Department, Department of Foreign Affairs and Trade, Department of Infrastructure and Department of Health and Aged Care, for the business process maps, designs, patterns and related documentation to be made available for reuse.

But there could be ongoing reuse costs, the panel warns, with entities likely to need to invest additional resources to customise and configure templates to ensure they are fit for purpose.

“In this context, even if capitalising on the reuse opportunities identified…. The resources required to cater to the diverse complexities and requirements of different entities across the APS apprears to be prohibitive for many entities, particularly if each entity was to pursue its own uplift.

“While there are many opportunities to reuse components, licenses, environments and documentation from GovERP, only large and complex entities with sufficient capability could implement one or more instances of GovERP as proposed and have it represented as reasonable value for money.”

With ‘multiple’ APS entities likely needing ERP uplifts in the near future, the panel has suggested where possible future ERP uplifts should group entities of similar complexity and scale to achieve economies of scale without the challenge of pursuing a whole-of-government approach.

Fechner notes in the report that fully managed ERP services across the Commonwealth don’t have a good record of performance.

“Generally, over the previous decade, only minimum support upgrades have been applied, and versions of SAP across the Commonwealth are at elevated levels of risk due to falling behind in the currency of the software,” he says.