In the labyrinth of government technology, the Australian Public Service (APS) finds itself at a critical crossroads. Investments in Enterprise Resource Planning (ERP) and other systems promised streamlined back-end corporate operations and enhanced service delivery, but despite great efforts, the reality of these systems have been complex and challenging.
As it stands, government agencies are missing out on opportunities for more efficiency and streamlined ways of working. Therefore, as we move through 2025 and beyond, the public sector must strategise ways to overcome the current limitations with these systems, in order for them to meet the dynamic needs of modern government in a cost effective manner.
With a focus on moving forward from this current situation, the Department of Finance unveiled its new APS ERP approach in January 2025, which outlines that government agencies are now actively reconsidering their approaches. A positive step forward, as ultimately ‘fixing’ ERP systems is not just about fixing individual systems, but a complete mindset shift.
No longer a ‘rip and replace’ solution
Recent ERP projects in the Australian public sector have exceeded budget limitations, with and struggled to achieve desired outcomes. Globally, it is not much better, as Gartner predicts that by 2027, more than 70 per cent of recently implemented ERP initiatives will fail to fully meet their original business case goals.
The previous solution to these shortcomings has been a ‘rip and replace’ approach, where agencies choose to move on or reinvent underperforming solutions in their entirety. However, this only disrupts operations and causes further expenditure.
Looking to escape this pattern, the public sector is discovering that implementing an ‘agility layer’ using the power of intelligent workflow orchestration brings new promise to helping agencies keep up with the demands of modern government.
Rather than replacing existing investments, an agility layer works alongside ERP systems to optimise and extend their capabilities through strong workflow orchestration and responsible AI automation. Not only will it support areas where they are working well and delivering value for staff and citizens, but it will also augment areas where they may not be fit for purpose.
It also enables agencies to break through traditional rigidity and introduces flexibility to overcome new challenges within government, such as stakeholder, regulatory and organisational change, technology evolution, and new citizen expectations.
The vision of agile ERP
At a time when Australian public sector agencies are facing budget constraints and increasing service demands, the ability for ERP and other core systems to be as dynamic as possible is imperative. The agility layer approach will be able to address a number of areas, such as:
- Reducing Risk and Cost: By building on existing investments rather than replacing them, government agencies can achieve modernisation with significantly lower risk and cost. Agencies can sweat their existing investments and upgrade where it makes sense. Research from Deloitte indicates that organisations taking an incremental approach to system modernisation typically reduce implementation costs by 30-40 per cent compared to full replacements.
- Accelerating Transformation: The agility layer approach enables incremental improvements to business processes, delivering quick wins while positioning for long-term success. This contrasts sharply with multi-year ERP implementations that often deliver outdated solutions by the time they’re completed, as Accenture finds agile modernisation leads to return-on-investment 15 months earlier than traditional methodologies.
- Enhancing User Experience: Government staff also benefit from intuitive interfaces, reducing training requirements and improving productivity. This creates a single, consistent experience and front door for those leveraging ERP systems, and provides an opportunity to better integrate services.
- Futureproofing: As technology evolves and requirements change, the agility layer can be quickly adapted without affecting core ERP functions. This is particularly valuable for government agencies that must respond to policy changes, service needs, and legislative requirements — as identified by the Australian Digital Transformation Agency, adaptability is the number one factor in sustainable government technology investments.
The time for action is now
The Australian Public Service stands at a pivotal moment. By moving on from traditional ‘rip and replace’ mindsets and embracing an agility layer approach — which uses responsible AI and workflow automation to build on existing systems including ERP — government agencies can optimise their digital investments, achieve outcomes in areas of need, and deliver the responsive, efficient back-end services that are critical, all without discarding the valuable systems already in place.
The evidence is compelling: traditional ERP and larger system implementations in government settings haven’t harnessed opportunities to transform operational efficiencies, leading to unplanned expenditure and significant legacy estates. The agility layer approach offers a pragmatic alternative that acknowledges fiscal realities while enabling genuine digital transformation.
The question isn’t whether the Australian public sector can afford to implement this approach — it’s whether it can afford not to.
Rob Bollard is Industry Principal Public Sector APJ with Pegasystems.
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