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What’s Best for Government? Government Resource Planning (GRP) or Enterprise Resource Planning (ERP)


August 1, 2012

A Study of the Literature

Doug Hadden VP Products

We received some interesting feedback from a recent blog post about cost overruns in ERP projects at the United States Department of Defense. I’ve been vocal about other examples of ERP failure within the public sector. It’s surprising how well major vendors are able to market solutions to government despite this lack of success. Perhaps there is so much marketing noise that it’s difficult for governments to uncover the evidence. Nevertheless, there is a significant amount of public information that supports anecdotal evidence. Some of the studies are dated – but if failure rates have been reduced by 50% in the last 5 years – that still means that 10% to 20% of all ERP implementations are a complete failure.

Let me know if you have evidence to the contrary or lessons learned in the comments section.

Should governments consider ERP or GRP?

  • Developed country governments are increasingly adopting Commercial-Off-the-Shelf (COTS) software to replace legacy and custom developed software applications for financial, budget, expenditure, tax, treasury and civil service management.
  • A major impetus for recent COTS projects is to replace multiple applications within a government organization with one integrated solution or to support numerous government organizations with a hosted shared service or private government cloud.
  • Government organizations can chose to acquire Enterprise Resource Planning (ERP) software from large software firms whose software is used in multiple “vertical” markets or Government Resource Planning (GRP) software designed exclusively for governments.

There are many large ERP project failures in developed countries

There are major difficulties reported in ERP public sector implementation in developed countries

ERP failures and cost overruns in the public sector have resulted in difficulties, contract cancelations and lawsuits, although lawsuits “are rare because vendors would rather do what it takes to make the situation right than face potential public-relations damage from a high-profile legal battle”:

Studies show a lack of ERP success across all industries

Studies show significant cost and schedule overruns in ERP implementations across all industries


On-time Delivery

Why is ERP so unsuccessful in government?

ERP software is designed for the private sector across many industries that rarely provide a good value for money to governments. Large-scale public sector ERP implementations additional time is required during the analysis and design phase to focus on the gap between the commercial process and the required process

  1. ERP cost overrun and the failure to meet schedule are because ERP software requires significant software complex code customization (BPM scripts, call-outs & software development) to meet government requirements that extends implementation cycles. The ratio of services to software cost in the public sector is estimated to be three time that in the private sector or up to 15 times the cost of software.
  2. High maintenance costs come from maintaining complex code through problem troubleshooting, and difficult upgrades that increases the Total Cost of Ownership (TCO). For example, the Government of Canada internal support for 15 different customized versions of a major ERP package received an award for saving more than $12M annually in “cost avoidance.” This is hardly a definition of IT success.
  3. ERP functionality is often complex and hard to use in the private or public sector. 46% of ERP implementers characterized that their organizations were not able to understand how to leverage features to improve the way that they did business.

Why implement FreeBalance Government Resource Planning (GRP) solutions instead?

  1. GRP software is designed for the government. It is possible to create software for a single “vertical market” that does not require code customization to support needs in most countries across all levels of government.
  2. Governments can configure GRP software to meet unique requirements thereby reducing lifecycle costs and more likely meeting implementation schedules and optimizing benefits.
  3. Software designed for government is easy to use in the government context.



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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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