• References

    1. That is, GovERP was premised on use of SAP as the fundamental technology building block for the program. The program then envisaged an additional series of software solutions to extended this basic or core functionality, if needed. 
    2. Services Australia, January 2024 DTA Approved Programs Collection (Wave 24) Project Collection Survey Form, January 2024 
    3. Services Australia Chief Information and Digital Officer, email Dissolution of GovERP Programme Board, 5 February 2024 
    4. See Appendix E, letter from Minister of Government Services to Minister for Finance, 26 April 2024. 

  • 3. Delivery and expenditure 

    3.1 Expenditure to date 

    The Assessment has identified investments of $340.6 million since 2019-20 in development and transition to GovERP as outlined in Table 2. 

  • Table 2 GovERP investment
    SourceEntityPurpose2019-20 $ m 2020-21 $ m 2021-22 $ m 2022-23 $ m Total $m 
    2021-22 Budget (May 2021) (see note a) Services Australia To: (see note b) 
    • Build GovERP technology platform  
    • On-board entities to GovERP 
    • Transition the SDO Provider Hubs 
    • Program management     		  126.4119.7Services 
    Australia total $246.1 
    Department of Industry, 
    Science 
    Energy and 
    Resources 
    (DISER)     		Business case development to develop SecondPass Business Cases for further adoption of GovERP and the design of suitable standardised technologies for small and medium entities  2 DISER total $2.0 
    Australian 
    Taxation 
    Office (ATO)     		  3.3 ATO total $3.3
    Department of Finance   2.5 Department 
    of Finance 
    total
    Department of Finance Onboarding readiness and legacy systems assist the SDO client entities to prepare for the transition to the GovERP platform, including the integration and decommission of legacy systems that result from onboarding to GovERP  19.6 $89.20
    2020-21 
    Budget 
    (October 2020)    		Department 
    of Finance    		To develop the GovERP model and Whole-of-government Business Case 35.6   
    Modernisation 
    Fund
    (August 2019)    		Department 
    of Finance    		To progress a GovERP prototype31.5    
    Total      $340.60

    Table source: Department of Finance, Additional Information Factsheet Shared Services Overview (incl GovERP), 15 May 2024. 

  • Table notes
    • Note a: Not all of the figures presented in this table are readily identifiable in historical budget papers. Given the commercial sensitivities at the time, GovERP-related payment measures in the 2021-22 Budget (for example) were listed as “nfp” (not for publication) – refer 2021-22 Budget Paper 2, page 77. 
    • Note b: This consisted of: 
      • Build GovERP technology platform: lead the design, build and operation of the SAP GovERP platform (including the SAP template and the technology hub) – $159.7 million over 2 years 
      • On-board entities to GovERP: on-board 14 of the Service Delivery Office’s (SDO) client entities onto the GovERP platform, including roll out of the GovERP solution, cut over to business-as-usual and close-out issues to sustain – $20.3 million over 2 years 
      • Transition the SDO Provider Hubs: lead the SDO Provider Hub uplift, including build of the GovERP instance and onboarding cut-over activities – $11.1 million over 2 years 
      • Program management: lead whole-of-government program arrangements in line with client capability needs, including design and oversight functions – $55 million over 2 years.
    Off

  • Services Australia has advised that, of the $246.1 million allocated as its budget for GovERP, $198.15 million had been spent as of 31 December 2023 (Services Australia January 2024). The Minister for Government Services has subsequently advised (see Reference 2) that the remaining budget will be used to continue sustainment of the current ERP solution, including ongoing licensing and hosting costs of the platform, see Appendix D. 

    3.2 Delivery to date 

    The Panel understand that 30 capabilities (out of 39 functional capabilities of the MVP 1.1) have been developed to date, with a subset of 18 of these capabilities having completed functional testing. 

    Development and functional testing have primarily focused on: 

    • human capability management-related capabilities (hire to retire), with 9 capabilities having completed functional testing to date; 
    • financial management-related capabilities (budget to report), with 8 capabilities having functional completed testing; and 
    • procurement-related capabilities (procure to pay), with one capability having completed functional testing. 

    The Panel could not confirm through evidence that travel and expense management-related capabilities completed GovERP functional testing. However, a key vendor (8common) has advised that all build elements for the travel and expense management tool (Expense8; see Reference 3) have been completed and functionally tested, albeit not explicitly integrated as part of the MVP 1.1 GovERP solution. 

    Figure 2 identifies 5 functional capabilities of GovERP. For a full description of the image, please see the 'Figure description' below.
    Figure 2 GoverERP delivery to date (against MVP1.1)

    Note: Figure 2 shows DTA analysis based on Appendix C, Reason Group technical assessment report.

  • Figure description

    The table above contains the following information:

    1. Hire to retire

    Developed and functionally tested

    •    Learning management
    •    Leave and absence management
    •    Organisational management
    •    Performance and goals management
    •    Recruitment
    •    On-boarding
    •    Off-boarding
    •    Work time and attendance
    •    Time sheet recording and management

    Developed, but functional testing not yet passed

    •    Manager self-service
    •    Employ self-service
    •    Payroll services

    2. Budget to report

    Developed and functionally tested

    •    Asset accounting
    •    Cost management
    •    Funds management
    •    General ledger
    •    Project accounting
    •    Tax management
    •    Statutory reporting
    •    Management reporting

    Developed, but functional testing not yet passed

    •    Budgeting and planning

    3. Revenue to bank

    Developed, but functional testing not yet passed

    •    Accounts receivable
    •    Banking and cash management

    4. Procure to pay

    Developed and functionally tested

    •    Services procurement

    Developed, but functional testing not yet passed

    •    Purchasing
    •    Receipting
    •    Contractor management
    •    Contract management

    4a. Target capability built in procure to pay

    Developed and functionally tested

    •    Supplier management

    Developed, but functional testing not yet passed

    • Sourcing

    5. Travel & expense

    Developed, but functional testing not yet passed

    •    Expense management
    •    Auditing and compliance

    Off

  • Components built-to-date were prioritised around the functionality required to onboard AGD (i.e. MVP1.1). There are some positive foundational features, however, existing capabilities are not sufficiently developed to address the MVP1.0 capabilities necessary for broader use across government.

    3.3 Remaining work

    As part of its terms of reference, the Panel was asked to advise on any remaining work envisaged to complete GOVERP. The Panel understands the following functional capabilities have not yet been developed and would require progression to complete the MVP1.1 (refer Appendix F):

    1. Budget to Report – 2 capabilities (18 per cent of 11 functional capabilities envisaged for this value stream under MPV1.1): Commonwealth Reporting, and Lease Accounting 
    2. Hire to Retire – 1 capability (8 per cent of 13 MPV1.1 functional capabilities): Employee Management 
    3. Procure to Pay – 4 capabilities (44 per cent of 9 MPV1.1 functional capabilities): Accounts Payable, Report Procurement Activities, E-procurement, and Whole-of-government Purchasing (see Reference 4)
    4. Travel and Expense – 2 capabilities (50 per cent of 4 MPV1.1 functional capabilities): (see Reference 5) Credit Card Management and Travel Management. 

    The Panel notes that, while functional testing has been completed for some capabilities, no system integration testing or user acceptance testing appears to have occurred as part of activities to date. Such testing is critical to completion of trusted and operational ERP (see Reference 6). Services Australia has stated (Services Australia June 2024):

    • SIT [system integration testing] and UAT [user acceptance testing] were planned prior to the implementation of Attorney-General’s Department (AGD) and were scheduled. SIT was to commence November 2023 and UAT early 2024
    • [System integration testing and user acceptance testing may] have been completed if the programme was not ceased mid-flight.

    3.3.1 Potential costs, risks, and benefits of remaining work

    The Panel is mindful that progressing development of the capabilities identified in Section 3.3 for AGD’s deployment (i.e. MVP1.1) may not be sufficient to complete GovERP. 

    In correspondence of 26 April 2024, the Hon Bill Shorten MP advised, “The development of the current ERP solution had primarily focussed on meeting the Attorney-General’s Department’s requirements, which in its current form are not suitable to meet the expansive operational requirements of Services Australia.” (see Reference 8).

    Considering Minister Shorten’s advice that the current ERP solution is not suitable to meeting Services Australia’s requirements, the Panel notes the 18 functional capabilities completed to date falls short of both the MVP1.1 (of 39 functional capabilities) and the MVP1.0 for whole-of-government purposes (54 functional capabilities). In this context, the objective of a standardised, common transactional corporate service will not be achieved by GovERP, even if it is further developed to carry out the remaining work to complete the MVP1.1. 

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

  • Eminent Panel Member Insight – Mr Chris Fechner, 16 May 2024

    Fully managed ERP services across the Commonwealth do not 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.

    Off
  • Key observation 2: 

    GovERP has not achieved the aim of a standardised common transactional corporate service across the APS. 30 functional GovERP capabilities have been developed to date with 18 of these having completed functional testing, but none have progressed beyond functional testing, system integration testing, user acceptance testing or into production. The ERP solution in its current form is not suitable to meet whole-of-government or Services Australia’s operational requirements. The objective of a standardised, common transactional corporate service will not be achieved by GovERP, even if the remaining work to complete the MVP1.1 is progressed. 

    Recommendation 2: 

    Given the objective of a standardised, common transactional corporate service will not be achieved by GovERP, further direct investment in GovERP for whole-of-government use is not recommended.

  • The above recommendation aligns with the new APS approach to shared services that is premised on principles of choice, market competition and affordability rather than focussing directly on GovERP.

  • GovERP reuse assessment

    Next page

  • References

    1. Services Australia, January 2024 DTA Approved Programs Collection (Wave 24) Project Collection Survey Form, January 2024.
    2. The Hon Bill Shorten MP, letter to Senator the Hon Katy Gallagher MS24-000015, 26 April 2024. 
    3. Expense8 is a Software-as-a-Service (Saas), cloud-based travel and expense management solution. It has been operational in the Australian Government since 2011. 
    4. The Panel notes GovERP has not integrated with existing whole-of-government solutions such as ARC (the whole-of-government AusTender publishing integration tool), and Peppol (the whole-of-government e-invoicing solution). ARC and Peppol are already built and operational across a range of entities. 
    5. The vendor, 8common, advised all build elements were completed and tested, however, these were not integrated by Services Australia as part of the GovERP solution. See Table 4 of Appendix C: Reason Group technical assessment report. 
    6. System integration testing (SIT) is software testing that evaluates how individual components work together within a larger system. User acceptance testing (UAT) is where end user tests systems to ensure the application or processes are fit-for purpose. 
    7. Services Australia, Services Australia feedback – Review of Independent Reuse Assessment, email to DTA CEO, 21 June 2024.
    8. See Appendix E, letter from Minister of Government Services to Minister for Finance, 26 April 2024.

  • 4. Reuse assessment

    4.1 Reusability by tier

    The government’s Digital and ICT Reuse Policy is underpinned by three high-level requirements:

    • Reuse whenever possible – your proposed investments must plan for and make use of any opportunities to reuse existing services or tools within your agency and across government
    • Design and build for reuse – if your proposed investment cannot reuse an existing digital or ICT solution, you must ensure that the service you build, can be reused by other agencies
    • Enable reuse by others – you must ensure anything you create is shared for others to reuse unless there’s a good reason not to.

    For the purposes of this Assessment, the concept of reuse has been applied broadly to capture as many reuse opportunities as possible. This includes consideration of opportunities to utilise existing technologies that have been built, all the way through to consideration of opportunities to leverage existing processes or patterns. As such, GovERP’s technical reusability has been considered across three tiers

    1. Tier 1 use of what has already been built
    2. Tier 2 building on something that exists, and
    3. Tier 3 items for a whole-of-government repository.

  • Test publication card

    Limited to the number of characters configured in the theme settings.
    Data and Digital Government Strategy - What we heard.pdf (pdf, 378.03 KB)
  • A three-stage hierarchy for reuse. This image is described in the Figure 3 Reuse hierarchy - a representation of the print version section below.
    Figure 3: Reuse
  • Figure 3 Reuse hierarchy - a representation of the print version

    Reuse hierarchy

    1. Use of what is already built
      1. Full Copy Shared Service Portal Access
    2. Building on something that exists
      1. Separate instance
      2. Limited Customisation & Configuration
    3. Repository
      1. Learnings & Thought Leadership
      2. Business Capability & Processes
      3. Designs, Blueprints & Patterns
    Off

  • 4.1.1 Tier 1 reuse opportunities

    Considering the current state of ERP capabilities, as outlined in section 3.2, APS entities have expressed hesitation regarding Tier 1 reuse (see Reference 1).

  • Eminent Panel Member Insight - Ms Catherine D’Elia, 12 May 2024

    One of the greatest hurdles in the delivery of the ERP system in NSW has been changing mindsets to overcome past negative experiences of poor project delivery or outcomes that do not sufficiently meet users’ needs. Even where there are entities willing to invest to adapt and reuse the system, broader ongoing adoption can see resistance from users unless these negative perceptions are addressed.

    Off

  • 4.1.2 Tier 2 reuse opportunities

    The Panel considers there is greater potential for Tier 2 or Tier 3 reusability. Building on existing GovERP capabilities with a separate ERP instance may be desirable for larger entities grappling with complex ERP requirements and integrations, particularly where those agencies have substantial in-house functional and technical skills in their digital and ICT workforces (such as Services Australia). In such a case, GovERP could serve as a potential accelerator.

    • The GovERP build to date had 167 customisations to workflows, reports, interfaces, conversions, enhancements, or forms (WRICEFs). Given the size of the GovERP program, development beyond standard configuration and customisation to meet the needs of government is to be expected.
    • That said, the Panel considers that larger, highly skilled entities with complex ERP requirements are best placed to make use of, and maintain, the existing GovERP capabilities and their related customisations.

    Most notable from the Assessment’s engagements with the Consultative Committee, is the Department of Health and Aged Care stakeholders’ interest in leveraging GovERP’s reusable architectural patterns/architectural documents and architectural decisions. The Department of Health and Aged Care’s currently proposed approach to its own ERP upgrade is to reuse GovERP’s capabilities wherever they are assessed as being fit for purpose. 

    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 functional and technical skills to support delivery and operations. Ensuring that any commercial arrangements already in place are leveraged to their full effect (where applicable) may help offset ERP delivery and operating costs.

    An entity intending to reuse any aspect of the GovERP product as an accelerator must assess the effort and financial investment required to develop capabilities based on the current build and test status. The Panel heard that any potential opportunity to save effort in implementing a process would have to be balanced against the effort to modify an existing entity’s business process to fit the GovERP implementation (or added effort to modify) (see Reference 1).

    The following decision-making principles may provide a useful basis for entities considering Tier 2 reuse opportunities: 

    1. first preference is to consider other SaaS or out-of-the-box solutions (SAP or alternatives) 
    2. if not appropriate, then build on existing GovERP capabilities, and leverage any commercial arrangements already in place, or 
    3. if SaaS or out-of-the-box solutions or building on existing GovERP capabilities are not appropriate, customised configuration will only be considered where assessed as necessary.

    The Panel notes any on-premises specific solutions will likely have limited reusability.

Connect with the digital community

Share, build or learn digital experience and skills with training and events, and collaborate with peers across government.

Join the Digital Profession