Selecting the right ERP solution for your organization is a monumental task for any industry. For public sector organizations, this is a particularly tall order.
It’s difficult to earn the support from project leadership who are changing every election, or to mobilize an aging workforce who has no appetite for change. Other challenges include documenting requirements and ensuring the chosen solution meets specialized needs.
Top 10 Public Sector ERP Systems
Public sector organizations must modernize their processes and technology to meet the demands of citizens.
We recently published a report on the Top 10 Public Sector ERP Systems to provide ERP selection advice to states, cities, agencies and tribal governments. Before you dive into the specific technologies in the report, let’s talk about the do’s and don’ts of public sector ERP selection on the path to becoming a digital government:
7 ERP Selection Tips
1. Don’t Start Meeting with Vendors Until You’ve Achieved Strategic Alignment
What is strategic alignment? For ERP selection, strategic alignment means the alignment of all stakeholders around project goals and timelines.
Let’s look at an example of how not reaching strategic alignment can sabotage the ERP selection process:
Let’s say the Chair of the county school board wants to implement a new time and attendance tracking system. She believes that teachers are spending too much time entering attendance records because their outdated system is difficult to use. She sees this as a minimal risk, high reward project that can be completed in the short term.
However, the Vice Chair wants to implement an entirely new e-learning system for all schools in the county. Both ideas are perfectly fine and will make a positive impact in the long term, but imagine how discussions with potential ERP vendors would go if these two stakeholders are not in strategic alignment.
2. Don’t Aim to Overhaul Your IT Ecosystem in One Phase
A memorable proverb says this in a different way – “How do you eat an elephant? One bite at a time.”
When implementing an ERP system, it’s best not to overhaul your entire IT ecosystem in a single roll out. Phasing out one system or business segment at a time minimizes the amount of risk introduced to your organization during an ERP implementation.
Throughout the process of becoming strategically aligned, you should have determined an overall goal and a corresponding timeline. To reach your overall goal, smaller milestones should have been discussed with their corresponding timelines.
During the ERP selection process, it’s important to share these milestones and timelines with potential ERP vendors. Some ERP systems are modular and make it simple to implement a little at a time. Others are more invasive and require a huge lift and shift to go-live.
3. Don’t Only Think of Your Immediate Needs
In the public sector, processes may seem like they’ve been the same forever. However, don’t let this mentality blindside you into only thinking of your immediate needs when selecting digital technology.
An ERP system and ERP project are huge investments both in time and money. Selecting the right system with your future in mind will set your organization up for streamlining processes and adding new capabilities down the road.
For example, today you might be looking for ERP software that can handle your payroll, HR and accounting. You choose an ERP system that has limited functionality to only meet those needs. However, a year later, your organization wants to move their customer record management into the same ERP system but discover it’s not possible without heavy modifications.
We don’t advise organizations to select the most robust ERP solution in the off chance a capability will be needed in the future. Instead, we recommend narrowing your scope down to the processes you currently support, especially if the systems supporting those processes are inefficient or outdated.
4. Do Give Small Vendors a Chance
When most people think of ERP software, one of the big vendors come to mind. SAP, Oracle and Microsoft Dynamics are all easily recognizable. These vendors built their brands over time by implementing their software in a variety of industries. To ensure their product was versatile, they established standard business processes and incorporated those as flows into their modules.
For example, in the procurement module of an ERP system workflows often can be created to gain approvals based on specified thresholds related to purchase orders. These thresholds tend to be universal, such as total amount and line amount. Other factors like the vendor on the purchase order or the buyer can also be used to determine workflow requirements.
In a public sector organization, stricter or more complicated workflows may be required. Your workflows may be dependent on the segment in the organization in which the buyer works, or the types of items or services on the purchase order.
For a non-public sector specific ERP system, this would involve some customization. For niche vendors that work in the public sector industry, this may be something already designed. In fact, smaller ERP vendors tend to specialize in one or only a few industries. These ERP vendors have extensive industry-specific experience on their resume and likely have a set of standard operating procedures designed with your industry in mind.
5. Do Document and Map Your Business Processes
At public sector organizations, this can be difficult as most processes are executed based on long-time employees’ tribal knowledge. Workers with the tribal knowledge may feel it’s to their advantage to keep this knowledge to themselves, whether it be for job protection or pride.
One way to lessen this resistance is to include these workers as part of the ERP project team in the selection process. This increases information sharing and employee buy-in.
5. Do Enlist the Help of a Third Party
In the public sector, it can be difficult to choose a vendor without being influenced by bias. Even if your ERP selection process is completely fair and impartial, we’ve unfortunately come across vendors protesting to continue in the request for proposal (RFP) process because of accusations of favoritism. When this happens, your RFP process can be sidelined while any investigations take place.
This risk is one of the many reasons why more and more organizations are leveraging third party consulting firms to handle the vendor RFP process. As an independent party, the consulting firm assumes the liability in rejecting some vendors’ proposals.
For example, when we work with public sector clients, we highly advise that everything related to the ERP selection process be documented. The dates, attendees and agendas for all meetings and demos should be captured. The conditions in which you evaluate each vendor should also be documented to prove that each vendor was held to the same evaluation standards.
Mitigating risk is not the only reason you should enlist the help of a third party during your ERP vendor selection. Independent ERP consultants, like Panorama Consulting Group, are technology-agnostic, so we investigate all possibilities to find the right ERP system for your organization.
5. Do Consider Return on Citizenship
In the private sector, it’s common for organizations to calculate their ROI before an ERP project. However, with no profit margins and lack of competition, public sector organizations have a difficult time measuring ROI for a new ERP system.
Instead, there is another goal that public sector groups can strive for: return on citizenship (ROC). ROC can be described as the return on government services and social value to the citizens.
With this goal in mind, you should ensure that each ERP system considered can help you to achieve it.
Modernizing Your Organization
Our Top 10 Public Sector ERP Systems not only highlights ERP vendors suitable for public sector organizations, but it examines some of the challenges the public sector is facing that are creating a need for modernization.
If you are wondering how to modernize your own organization, you will find our report useful as it provides guidance on how to prepare for software selection and navigate selection challenges.
Panorama’s ERP consultants are experienced in digital government and digital transformation best practices. We can help you more efficiently and effectively deliver services to citizens.