SAP renews whole-of-gov deal with $152m initial value

SAP has reached a whole-of-government agreement through the Digital Transformation Agency (DTA) for an initial three years that is worth at least $152 million.

The two parties said the agreement covers “access to SAP software and services” for Commonwealth departments and agencies that currently use the vendor’s enterprise resource planning (ERP) software.

The agreement, set to come into force June 29, covers software, cloud services and professional services.

“The arrangement will ensure that Commonwealth agencies continue to have access to SAP products, services and support, providing them with the necessary time to plan their ERP uplift programs, in line with the government’s recently announced APS [Australian Public Service] ERP approach, within the safe and agreed terms of the new arrangement,” DTA CEO Chris Fechner said in a blog post.

SAP Australia and New Zealand president and managing director Angela Colantuono said the arrangement “will also enable incremental innovations, including AI.” 

The government first signed an agreement with SAP back in 2017 for $42 million, although as is the case for most such deals, its value to SAP has wound up being many multiples of that amount.

Renegotiation of the so-called standing offer arrangement kicked off last year.

The renegotiation coincided with a shift in the ERP strategy of the government. 

It had been trying to set up a common SAP system across federal government, but has since changed direction, and is once again allowing agencies to make their own ERP choices.