October 16, 2013Doug Hadden
Doug Hadden, VP Products
Our analysis of 5 Year TCO for turnkey government Integrated Financial Management Information Systems (IFMIS) for FreeBalance Government Resource Planning (GRP) is almost half that of Enterprise Resource Planning (ERP). The problem with this calculation based on competitive quotes is that it does not include all costs in 5 years – certainly not costs acrss 15 years.
A webinar by Andy Kyte of Gartner Group on TCO is eye-opening. It's well worth the free registration to watch the entire webinar. Kyte shows that poor design with an application requiring significant change has an average 15 year TCO of 50 times the orginal implementation cost. It is my view that software designed for the private sector (ERP) and most custom developed software represents poor design.
ERP requires significant customization to achieve government needs. And, custom designed software does not have the same rigorous attention to quality and development teams do not have visibility into future needs.
Government financial management rules and reforms change significantly over time. Here's a storified version of Kyte's webinar with some observations specific to GRP: