Finance GovERP makes a joke of reform

James Riley
Editorial Director

Remember a few years back when ICT procurement reform was all about breaking up big vendor contracts? Remember no contracts were to be valued at more than $100 million, and no contracts of more than three years’ duration?

Those were the heady days of ancient yore (it was 2017) when an ICT procurement reform under former minister Angus Taylor dared view government spending as a potential lever of industry policy and the fostering of sovereign capability.

Blinkered view: Finance department in Canberra

By breaking up giant tech contracts through these sweeping reforms, the federal government had aimed to increase the SME share of its $6.5 billion annual tech spend by 10 per cent. That’s a giant number. The ambition was to “inject an additional $650 million annually into small Australian tech companies.”

Which would have been amazing, obviously, if only we lived on that planet. Such a quantum of dollars would have been more than twice the spending on the entire National Science and Innovation Agenda (NISA.) It would be $1.3 billion every two years, as opposed to the $1.1 billion of NISA over four years.

Wow, what was a beautiful thing to behold. Slow hand clap for all involved.

Unfortunately, the reality has turned out to be somewhat different, capped this week by the stunning news that the Department of Finance has literally defined the ERP needs of government against the capability of a single vendor.

The Finance department, which clearly did not get the Angus Procurement Memo, has ‘gone to market’ for “the design, development and trial of a common whole-of-government platform, which will deliver a range of standardised corporate and financial services.”

In a most beautifully compliant submission to vendor lock-in, Finance will prototype a new foundation ERP platform for trialling across the government’s Shared Services Provider Hubs that already operate an SAP-based ERP – and has therefore selected SAP/4 HANA as the core technology solution.

To be clear, the rationale for using SAP for the whole of government ERP across five of the six government Shared Services Provider Hubs is that they already use SAP. The approach to market document published on the government’s tender document has literally defined its own requirements based on the language of SAP architecture.

Incidentally, the single Shared Service Provider Hub that does not currently use SAP, is being defined against the SAP regardless (in that it is referred to as the ‘non-SAP’ Shared Services Provider Hub). The government’s binary ERP world is rigidly defined by a single vendor. You’re either SAP or you’re non-SAP.

The level of vendor lock-in here is next-level. It’s like performance art. Someone should have live-streamed the meeting that decided this was alright. It’s almost like they don’t realise that they have been captured. <<insert double crying-with-laughter emoji here>>

Was there a competitive process to arrive at this decision? No, of course not. Was the market tested? Not visibly. Not even quietly.

Are there any other vendors that might have some experience in the provision of software-as-a-service ERP? Is the venerable German software maker SAP really the best example of a SAAS provider of ERP services? Or is it still coming to terms with the new model, late to the game?

And if the government did find itself inexplicably locked into a single vendor, wouldn’t this be the perfect moment to explore what else is out there? Like right now, when it is at the start of a giant redesign project that will be measured in years and years and hundreds and hundreds of millions of dollars?

But no, the approach to market has been defined by the architecture of a foreign multinational software vendor whose primary virtue is that it’s the incumbent.

The perpetuation of the lock-in is guaranteed.

The ICT procurement reforms have clearly been chucked out the window. This started to become clear when Government Services Minister Stuart Robert spoke at an AIIA luncheon late last year, talking in the language of consolidation and scale.

Which is just weird. Surely scale does not mean using a single vendor? The is Internet is the scale and the software arrives on top. Doesn’t it?

Any notion that ICT procurement would be used a lever for local industry development and the enhancement of sovereign capability is clearly ancient news.

What a shame.

Do you know more? Contact James Riley via Email.

1 Comment
  1. Thanks James. QLD did this in 1995 when they “tendered” for a replacement of the whole-of-government finance system. They used SAP specific language in the documents and the auditor was satisfied with one (1) tender submission from one (1) vendor. It’s not a new game and SAP has the strange epithet “dominant stack”. Now all that’s been decided it will become clear that Australia and Canberra don’t have the necessary SAP S/4 and HANA skills. It will be forced to import them from that wonderful country to the north-west where so many high-quality universities produce so many amazingly talented SAP and IT professionals with decades of experience in the brand-new SAP versions. That’s the professionals who have successfully falsified their qualifications, CVs and referees in order that the Commonwealth selects them on “merit” ahead of people who already live here and have been working in government finance for years. The Department of Finance shared services project is already headed down this road, and it’s fantastic to see how diversity now means that entire SAP teams should have been born in another country that we regularly beat at cricket. Shame we can’t beat them at SAP but. They win every match. Howzat !

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