GovERP program cost hits $265 million

A large-scale program to set up a common SAP enterprise resource planning (ERP) system for the federal government has cost $265 million so far.

The price tag includes a two year, $246.1 million pot of funding given to Services Australia in the 2021-22 federal budget, a figure deemed too commercially sensitive to publish at the time.

An additional $31.5 million was allocated to the Finance department to buld a prototype, although it only wound up spending around $19.4 million before responsibility for the program, known as GovERP, was handed to Services Australia at the start of July 2021.

It was revealed last month that $60 million of work that Services Australia was meant to deliver in 2022-23 - presumably out of its $246.1 million - had been deferred to the current financial year.

The $246.1 million covered finalisation of "the build of the whole of government prototype/template", the hosting environment and then operational costs of the platform, according to Finance.

The cost numbers were disclosed in responses to questions on notice [pdf] filed after the most recent round of senate estimates.

GovERP’s origins date back to late 2019 when it was designed to standardise corporate and financial systems across the government’s six shared services hubs.

When fully implemented, it will replace existing SAP-based ERP systems used by the hubs, which are located in Services Australia, the Tax Office and the departments of Treasury, Industry, Foreign Affairs and Finance.

The hubs were introduced in 2016 as a result of the government’s shared services regime and serve the core transactional corporate services needs of 73 agencies.

Technically, the GovERP program comprises a SAP S/4 HANA-based core and a series of software-as-a-service “edge” solutions that can be bolted on to provide specific functionality.

In its most recent corporate plan [pdf], published at the end of last year, Services Australia simply described work on GovERP as “continuing”.