Public sector organizations have much to gain from implementing ERP software. The intelligent workflows and automation that these systems provide can help governments make smart financial and operational decisions and deliver high-quality services to citizens, constituents, donors, or whomever they serve.
Yet, government ERP success doesn’t happen overnight. You must take your time evaluating software so you can find a solution that aligns with your highest-priority goals.
Today, we’re sharing some ERP selection tips for public sector organizations. You can peruse our report below, but first, scroll down to make sure you’re taking the right selection approach.
Curious About the Top Government ERP Systems? Here are the Vendors Featured in Our Report:
2023 Top 10 Government ERP Systems
This independent report reveals what ERP vendors our consultants most frequently consider for public sector clients. These vendors enable states, municipalities, nonprofits, and other public sector entities to be more data-driven.
Here are a few best practices for selecting the best government ERP system. These expert insights will help you narrow your list of options and select the system that’s best suited for your needs.
7 ERP Selection Tips for Government Organizations
1. Start With Strategic Alignment
Ensuring strategic alignment means getting all project stakeholders on the same page. In other words, everyone agrees on the project’s key points, including:
- Goals and objectives
Until your agency reaches this level of cohesion, it’s not wise to move forward with the selection phase of an ERP implementation. By rushing forward too quickly, you could set yourself up for disjointed conversations with vendors.
Let’s look at an example of how misalignment 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 She believes that teachers are spending too much time entering attendance records because their outdated system is difficult to use.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 will go if these two stakeholders are not in alignment.
2. Map Your Future State
Before you can evaluate any ERP system, you’ll need to map your future state processes. This means developing high-level process maps that vendors can reference when preparing their demos.
As a public agency, you might find this task a little challenging. Process knowledge is often stored in the minds of your long-term employees who may feel it’s to their advantage to keep this knowledge to themselves.
One way to lessen this resistance is to include these workers in the selection process so they have a say in what the future state looks like.
3. Quantify Return on Citizenship
Private-sector executives will often anticipate the success (or failure) of a project based on its expected return on investment (ROI). However, in the public sector, considerations like profit margin and competition are non-existent, so you require a different measure.
This measure is return on citizenship (ROC). Put simply, ROC is the return on government services in terms of social value to citizens. This is an important consideration during software selection because you should evaluate each ERP system based on how it could help you reach your ROC goals.
4. Take a Phased Approach
As you begin comparing software options, it can be tempting to overhaul your entire IT ecosystem.
Yet, approaching your project as a big bang implementation could mean incurring major risks. If something goes wrong, it could create a domino effect of detrimental consequences.
In contrast, when you phase in one system or business unit at a time, you can greatly minimize these risks.
This is why strategic alignment is so important. When you have alignment, you have clearly defined goals and specific timelines for reaching them.
For instance, if you break down each goal into smaller, more incremental milestones, you can share these milestones with prospective vendors to see if they align with their capabilities. While some ERP platforms are modular and can support a phased approach, others are best suited for a big bang approach.
5. Consider Your Long-Term Needs
In the public sector, processes become best practices and tend to have staying power. For this reason, government organizations tend to take a short-term approach when considering their ERP needs. They know which pain points their employees are currently facing, and where their workflows need to be optimized. In turn, they laser-focus on those requirements when selecting an ERP vendor.
Yet, solving these issues will only take you so far. How will you streamline processes in the future? Do you want to add new capabilities down the road? If so, you’ll need to look at your project from a long-term perspective, particularly if your vendor doesn’t offer a modular approach.
Sure, you can save money by selecting software with limited functionality that only meets your immediate goals. However, you’ll incur even more costs when you decide to expand functionality because it might require complex configurations or customizations.
For example, today you might be looking for software that can handle your payroll, human resources, and accounting. You select an ERP system that has limited functionality to only meet those needs. However, a year later, your organization wants to move their record management into the same ERP system but discovers it’s not possible without heavy modifications.
6. Don’t Overlook Smaller ERP Vendors
In the ERP space, there are several well-known names. Some of these top ERP systems include those offered by Oracle, SAP, and Microsoft. These brands have made a name for themselves by creating versatile products designed for organizations across industries.
Public sector agencies tend to have stricter, more complicated workflows that standard functionality sometimes can’t support without extensive customization. For this reason, you may want to consider a smaller ERP vendor that is more industry-specific.
7. Enlist Third-Party Support
Try as you might to avoid it, vendor bias is still very real. Even if you minimize it, you may still be accused of it.
We’ve seen many vendors protest to continue in the request for proposal (RFP) process because they believe the organization is showing favoritism. When this happens, the RFP process is halted while investigations take place.
To avoid this issue, it’s smart to hire an ERP consulting firm with plenty of experience in the vendor RFP process. As an independent party, the consulting firm can assume the liability in rejecting certain vendors’ proposals.
They can also help you keep documentation on every aspect of your project so you can prove your impartiality if you are accused of bias.
Finally, they can serve as change management consultants if they possess that skillset. These experts can help you communicate with employees during the selection process, so they understand the reasoning behind the coming changes.
Finding Government ERP Success
Public sector agencies are working with a unique set of challenges as they approach the ERP selection process. Yet, they’re poised to benefit if they can find a solution that meets their needs.
Ultimately, you can’t achieve government ERP success without a roadmap in place from the very beginning. From process mapping to strategic alignment, there are several important milestones to meet in these early stages.
Our team of ERP consultants can help you evaluate vendors to find technology that enables you to more effectively serve citizens. Contact us below to schedule a free consultation or download our 2023 Top 10 Government ERP Systems Report.