Page III: Phase two of government ERP implementations is set to take off. What can you expect?
Unlike other industries, the software can't be customised for the one industry because the needs and operations of government, from council to council, state to state, and between federal departments, differ. The vendors soon realised that customising a product for government wasn't going to be easy, and they are still learning.
Gartner's Steenstrup says: -The further you go into detailed processes the less suitable it is for government. ERP vendors have been making their capabilities more general so that it is better suited to the administrative type functions -- essentially you have ERP functions that have been extended and adapted for government."
The problem for vendors is that the landscape is changing again, because as government enters the second phase of ERP, the common interests between the three levels of government split even further.
According to McAdams, the drivers behind local government ERP projects stem from wanting to improve the understanding of infrastructure, such as parks, roads, etc, and taking services online. Whereas at the state and federal levels, McAdams say the focus is -often about facilitation, it tends to focus on human capital management, and there is a strong focus on CRM and responding to clients".
With two different ERP avenues, vendors are responding by creating different versions of their software. Oracle for instance, after suffering a few losses in local government (Launceston City Council is one example), has since launched a special edition of its E-Business suite, packaged especially for smaller companies. It has also introduced an asset management package -- a module popular in local government. Since then the company has had success with Cairns City Council (previously operating on legacy systems, the council has replaced it all, from finance to asset management, with Oracle's E-Business suite on Dell Linux servers) and the University of Technology, Sydney.
PeopleSoft offers both Enterprise and EnterpriseOne-branded software, the latter aimed at companies with a revenue of less than $250 million with an emphasis more on construction and asset management. A few months ago, Jigsaw Services and PeopleSoft announced a deal with five councils to deliver EnterpriseOne, mainly for its asset management capabilities. The councils involved were South Australia's City of Unley, Western Australia's City of Swan, Queensland's Gladstone City and Livingstone Shire councils, and Thames Coromandel District in New Zealand.
And SAP has just released a set of quick fix packages called SAP Direct for its enterprise software and services, with the ERP add-on focusing in integration help.
However for such a dynamic industry ERP vendors seem to be moving slowly on this. It could be argued that more is needed than just repurposed software. Certainly you have to wonder about those overblown government ERP projects -- the fault can't entirely lie with the customer, after all the vendor is the supposed expert on the product and should realise what the customers' needs were before selling the product. McAdams believes that government so far has been poorly led. -In general, vendors haven't provided strong leadership," he says.
A cynical person could argue that when the market is hot, vendors can afford to pay little attention to actually helping a customer, however when sales start to plateau you need to rely more on word-of-mouth and a good reputation. When the first phase of ERP started dying down is probably when the idea to repurpose the software came in. The problem is that the second phase of ERP is looking to be a high point.
Gartner says ERP licence revenue in Australia alone was US$82.8 million in 2002. During the same period CRM was worth US$47.2 million. Jigsaw's McAdams thinks the ERP market is -only just starting to warm up now".
-Victoria will be spending $320 million on IT in health only," says McAdams. -We sold 16 sites last year. Business picked up on technology as an enabler in the mid-90s but government has taken a period of time."
-There is a very simple way of looking at it -- the generation of people coming out of uni are happy handling everything on the Internet, so this service delivery in government is just getting started," he adds.
With a second bout of ERP coming up, you can only hope veterans of the first installment have learnt some lessons. McAdams says the common problem he comes up against, particularly in councils, is too many decisions being made by too many people, and a lack of leadership. While ERP vendors can surely do more to help customers through the process, there really is only so much they can do. This means government customers need to be across the technology and know how to manage a project.
Thinking back on the problems experienced at Launceston City Council, Gilbert has this bit of advice to pass on: -Don't underestimate the work involved."
