Many observers would classify our software, the FreeBalance Accountability Suite™, as Enterprise Resource Planning (ERP) for government. Some people are quite surprised that we do not consider our applications to be ERP. Yet, we doggedly persist in calling it Government Resource Planning (GRP). Our use of the GRP term is used as differentiation on one hand by invoking a familiar concept of “resource planning” yet with some differentiation. But, how ERP-ish is FreeBalance’s software?
ERP Systems Have the Following Characteristics
- Originated as private sector manufacturing systems and evolved to government. The name was created by Gartner.
- Almost all ERP descriptions describe “enterprise” as related to the private sector. This is the most common understanding of the concept, although any “organization” could be considered an “enterprise” in some way. There is also an understanding of “enterprise-class” as related to larger organizations although there is an ERP mid-market and so-called ERP for SMEs. It is generally agreed that the ERP software footprint includes private sector business functionality.
- Act as the system of record for financial transactions.
- Assessment: FreeBalance software operates as the system of record in government organizations.
- Running Total: 1.5 out of 3
- Was redefined ERP by Gartner in 2000 as ERP II to include front office functions such as CRM.
- The need for ERP to be “web-based” to be ERP II
- Assessment: FreeBalance Version 7 software is 100% web native with no client/server code. (Curiously, major ERP manufacturers continue to use legacy client/server code that is web-enabled yet calls it “web-based”)
- Running Total: 3.5 out of 5
- There has been the introduction of a concept known as ERP III that adds social characteristics. “From this integration of the customer and vendor a constructive dialog and exchange of information is created to innovate, produce, and then sell / distribute better products or services.”
- Assessment: FreeBalance products enable citizen dialog, civil society outreach and transparency that enables governments to improve citizen services and wellbeing
- Running Total: 4.5 out of 6
- Consists of multiple functions such as financial management, human capital management and supply chain management.
- Operates in multiple vertical markets. Software that operates in a single vertical or horizontal market is known as “best-of-breed”.
- Assessment: FreeBalance operates in a single vertical – government. It could be argued that we are in a sub vertical of public sector or that Public Financial Management (PFM) is a sub vertical of government because we do not support public safety, defence, courts, or library non-financial functionality. So, it’s “best-of-breed” by any definition.
- Running total: 5.5 out of 8
- ERP was never about “resource planning”. The “RP” came from the familiar category of Manufacturing Resource Planning. “Enterprise resource planning software, or ERP, doesn’t live up to its acronym. Forget about planning – it doesn’t do much of that – and forget about resource, a throwaway term. But remember the enterprise part. This is ERP’s true ambition. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs.”
- Assessment: PFM is all about resource planning. This is captured in the budget formulation process that includes public investment, capital, recurrent/operating expenses, salary and development budgets. These budgets are used for expenditure controls. A government budget is a law. This differs from budget planning processes in the private sector where the resulting budget is a guideline.
- Running total: 6.5 out of 9
- Common look and feel within an “integrated” suite.
- Assessment: FreeBalance Version 7 is fully integrated and has a common look and feel. (Curiously, many ERP manufacturers struggle with this because of acquisitions where the user interface is somewhat different among modules and where there is not unified management where integration needs to be augmented by metadata management.)
- Running Total: 7.5 out of 10
Does 3/4 ERP Make FreeBalance Software ERP?
Our view is that the missing 1/4 is the critical factor – the software origins and intent – the “best-of-breed” nature of the FreeBalance Accountability Suite™. The following video that describes a common scenario for ERP that has nothing to do with government.