We’re Already Past the Strategic Inflection Point
We’re in danger of being fooled by the mad rush to cloud, big data, engineered systems, user experience, mobile, social and the internet of everything by the enterprise software market. Yes, fooled into complacency. Into thinking that incumbents are loudly and incrementally innovating. And, acquiring new technology firms. That these firms “get” digital disruption.
The strategic inflection point for transformation in the enterprise software market was the point where economies of scale changed to favour nimble over bloated enterprise software companies. There are important lessons to be learnt in why and how this happened.
How Has the Enterprise Software Market Changed?
Outcomes Are More Important Than Systems
Major vendors and consultants continue to plead with CIOs and IT departments to get relevant in digital transformation. Yet this inevitably backfires as ‘digital’ focuses companies on outcomes, not products. The ‘good old days’ of selling shiny objects to IT are gone.
In our sector, Public Financial Management (PFM), this is equally true. A new generation of digital natives are taking key roles in civil services across the world and they are far less susceptible to Enterprise Resource Planning (ERP) vendor hype. They have learnt from their predecessors’ lessons in ERP failures. And they have studied the success stories of countries that have adopted Government Resource Planning (GRP) instead of ERP and a progressive activation approach instead of ‘big bangs’.
Enterprise software companies can no longer rely on customer ignorance of poor implementations, bad service, forced upgrades, license audits, high Total Cost of Ownership (TCO) and legacy technology.
ERP Broke the Bank
The enterprise software cost burden has become much more visible and the technical debt that so many countries now sit with – and can ill afford – means that IT budgets are focused on “keeping the lights on”. As Vinnie Mirchandani shared on his Deal Architect blog, the use of engineered systems with a proprietary database does not solve the fundamental customer problem of high TCO. Enterprise software companies that remain disconnected from customer realities will continue to solve problems that customers do not have.
In fact, Deloitte is on record saying many organizations are modernizing systems to pay down technical debt, re-platforming solutions to remove barriers to scale and performance, and extending their legacy infrastructures to fuel innovative new services and offerings. It’s often the underlying technology platform that introduces unreasonable long-term costs.
Digital Requires Rip and Replace
Enterprise IT is one of the few fields of endeavour where preserving as much as possible of the past is seen as a virtue. But this attachment to past investments is holding enterprises (and countries!) back from where they need to be to compete as the world goes digital.1
In the public sector, this means moving from ERP to a GRP system like the FreeBalance Accountability Suite™ – a commercial off-the-shelf, web-native, Java-powered solution that covers the entire budget cycle and manages all critical government fiscal systems. It provides interoperable budgeting, accounting, expenditure, revenue, treasury and civil service management to drive effective decision-making, improve governance and transparency, and build the most valuable asset of any government – citizen trust and wellbeing.
How to Move from ERP to GRP
How do you know if you should be considering a move from enterprise software to government resource planning software? We’ve pulled together a few questions for you to consider:
- Where is the cost burden in your portfolio today?
- Think: consultants, upgrades, training. Solutions: simplicity, mobility, user experience…
- What is the platform implication?
- Is it legacy ERP technology that is heavily customized? Is it high costs for metadata management and information governance even though it’s on the same platform?
- What needs to be good enough?
- Think cloud or open source.
- What is truly mission critical?
- Create a heat map and use business component mapping to determine what you may want to highly configure or customize.
Once you are clear on these important criteria determine how you could integrate and assemble among platforms.
And, if that doesn’t work, don’t be afraid to rip out what you’ve got. Remember: the longer you use a legacy enterprise software application, the further behind the curve you’ll be.
FreeBalance GRP Advisory Services
As a specialized business-to-government firm with unparalleled experience in PFM reform, FreeBalance is the first choice for governments looking to plan and implement a PFM reform and nation building program. Our solutions align country priorities, national development plans and donor objectives.
FreeBalance’s full suite of technology-agnostic advisory services can be viewed here and include our specialist GRP Service which helps governments to successfully implement the right GRP solution based on a risk and opportunity analysis of GRP subsystems, data centre infrastructures and IT capabilities.
Get in touch today to find out how we can help your government get the most out of its technology investment.
Learn more about the FreeBalance Accountability Suite™