Cost of government ERP systems under fire in NSW

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So called Enterprise Resource Planning (ERP) systems have for almost 20 years been one of the biggest guaranteed cash-cow for corporate software providers, but the New South Wales government has moved to draw a line under the high costs of integration and handsome annual software maintenance fees.

In a move that mirrors similar efforts to rein-in multinational technology suppliers gouging government contracts overseas, New South Wales Minister for Finance and Services, Dominic Perrottet has moved to open-up key government business process standards across state agencies to industry in an effort to break the lock-in of big incumbent suppliers.

The move is a major challenge for the likes of SAP, Oracle and IBM who have for years had held a major advantage because of their size and incumbent knowledge of government information standards, sometimes even setting them.

But that could be about to change, thanks to moves to open the field, and vital information, to smaller suppliers thanks to a kind of data Glasnost.

“This will make the standards more widely available, and will enable suppliers to tailor their solutions to meet Government needs,” Mr Perrottet said.

“It will make the system fairer for both large and small suppliers. Previously these standards were only available to those who had a contract with Government.”

The move to expose standards to sunlight in NSW reflects similar moves in Britain where both sides of politics have become frustrated with the high costs of running back-end systems relative to what they deliver.

A big problem in Europe, the UK and other developed economies has been that the entrenched position of Big Software has often resulted in unintentional dependence on vendor standards and business processes rather than those that reflect the needs and operations of clients.

Now Mr Perrottet is happily taking a leaf out of the UK’s new competitive agenda for buying technology conspicuously announcing his latest reforms on the eve of meeting the United Kingdom Government’s Chief Technology Officer, Denise McDonagh.

“There are a lot of similarities between the work that Denise and her colleagues are doing in the UK and what we are achieving here in NSW, with governments from both jurisdictions moving to more ‘as a service’ and cloud based offerings,” Mr Perrottet said.

“Progressive governments across the globe recognise the need to make it easier and more transparent for private enterprises to do business with government agencies.”

Mr Perrottet said under his changes, a new category has been developed in the ICT Services Scheme that would be a “one stop shop” for enterprise resource planning as a service . . . as opposed to a big fast capital investment.

“This model means that services will able to be provided to multiple agencies, reducing the costs of ERP implementations,” he said.

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