Project Evaluation – The Case of GovERP
Background
In 2014, the Australian Government initiated the Shared Services Program, aiming to
consolidate and standardize back-office functions such as finance, human resources,
and procurement across various federal agencies. This initiative led to the development
of the Government Enterprise Resource Planning (GovERP) project, envisioned as a
common platform to enhance efficiency and reduce costs within the Australian Public
Service (APS).
Objectives
The GovERP project aimed to streamline back-office functions across federal agencies,
lower operational costs via shared services, and improve data consistency and reporting
within the APS.
Timeline
For its scope and scale, the GovERP project was an ambitious initiative aimed at
consolidating and standardising critical back-office functions, such as finance, human
resource, procurement, and travel and expense management, across various
government departments. Fig.1 presents a timeline highlighting key developments
throughout the project's lifecycle:
Figure 1. GovERP project timeline
Organisation Structure
The governance and organizational framework of the GovERP project involved multiple
entities and was structured as follows:
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Shared Services Sub-Committee (SSSC): This committee comprised
representatives from 13 government entities and provided strategic oversight for
the GovERP program.
GovERP Program Team: Operating under the Department of Finance, this team
was responsible for the day-to-day management and delivery of the GovERP
initiative.
Provider Hubs: Six major agencies acted as shared services hubs, responsible for
delivering corporate services—like finance, human resources, and
procurement—to a large number of client agencies within the Australian Public
Service. These hubs included:
▪ Australian Taxation Office (ATO)
▪ Department of Foreign Affairs and Trade (DFAT)
▪ Department of Industry
▪ Department of Treasury
▪ Department of Finance
▪ Services Australia
Client Entities: Various other government departments and agencies that were
intended to adopt the GovERP platform as clients, receiving services from the
Provider Hubs.
This hierarchical structure was designed to facilitate collaboration between the central
GovERP Program Team, the Provider Hubs responsible for service delivery, and the Client
Entities adopting the standardised ERP solutions. However, the primary governance body,
SSSC, lacked sufficient technical expertise to effectively oversee the complex ERP
implementation. This deficiency led to over-reliance on external consultants and vendors,
which may have introduced biases and misalignments with government needs.
Stakeholder Engagement
The GovERP project struggled with stakeholder buy-in because it was seen as centralized,
rigid, and top-down, with inadequate stakeholder engagement and unclear benefits.
Many agencies didn’t feel they had a seat at the table or a voice in shaping the outcome.
For instance, GovERP client entities were primarily selected based on their alignment
with the whole-of-government shared services strategy and their dependence on shared
services hubs. Whereas, provider (shared services) hub selection was driven by an
efficiency logic, that is, the goal was to have a few high-capacity, standardised ERP
provider hubs servicing the majority of the APS, reducing the number of bespoke systems
and increasing consistency across agencies. Appendix A provides insight into the
missteps that contributed to erosion of stakeholder buy-in.
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Implementation and Key Challenges
GovERP’s implementation was marred by scope changes, ownership shifts, lack of
stakeholder commitment, and technical and integration issues. Frequent alterations in
project scope and transitions in ownership among departments led to inconsistences
and hindered progress. Some agencies were reluctant to fully commit to the centralised
system, preferring autonomy over their internal processes. Integrating diverse legacy
systems into a unified platform posed significant technical challenges, leading to delays
and increased costs.
Some of the key challenges that ultimately led to its abandonment or discontinuation
include:
1. Project Scope and Complexity: The ambitious scale of GovERP posed inherent
difficulties. The project aimed to standardize back-office functions across
multiple government entities, which introduced complexities in aligning diverse
processes and requirements.
2. Transition of Ownership and Responsibilities: Midway through the project,
there was a transfer of responsibility from the Department of Finance to Services
Australia. This handover disrupted continuity and accountability, complicating
project management and execution.
3. Lack of Stakeholder Commitment: The project suffered from insufficient
commitment and engagement from various departments. There were multiple
changes to the entities identified for initial onboarding and an overall uncertainty
regarding project stakeholders. This lack of buy-in from government departments
and agencies hindered cohesive collaboration and alignment with the project's
objectives.
4. Divergence from Original Design: Over time, GovERP deviated significantly from
its initial design and operating model. These shifts led to misalignment with the
original goals and reduced the project's effectiveness.
5. Limited Reusability of Developed Solutions: Assessments revealed that the
functional capabilities developed were not suitable for reuse across other
government agencies. This limitation diminished the anticipated benefits of a
standardized platform.
6. Financial Implications: The project incurred substantial costs without delivering
the expected outcomes, leading to significant financial losses and raising
concerns about the efficient use of public funds.
These challenges underscore the complexities involved in large-scale, public sector IT
projects and highlight the importance of clear governance, consistent stakeholder
engagement, and adherence to initial project designs to achieve successful outcomes.
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Outcome
By early 2024, after an expenditure of approximately $341 million, the GovERP project
was discontinued. An independent assessment revealed that the project had not
delivered the intended functional outcomes, i.e., the consolidation and standardisation
was expected to enhance efficiency and reduce operational costs with the APS. Moreover,
a reuse assessment found that the potential for reusing developed components of
GovERP is minimal. GovERP is added to the growing list of abandoned federal IT projects
collectively costing over $2 billion in public funding.
Conclusion
The GovERP project underscores the complexities of implementing unified systems
across diverse governmental agencies. While the project did not achieve its original goals,
the experiences garnered provide valuable lessons for future endeavours in public sector
digital transformation.
Project Evaluation - Questions
Formulate a response to the following statements/questions in accordance with the
instructions set out in the detailed outline of Assessment Task 3 published on Canvas:
1. Critically evaluate the approach to stakeholder engagement evident in GovERP’s
organisation structure and approach. Identify the main problems with the approach and
provide recommendations on what you would do to improve stakeholder management in
the future.
2. Change management practices and a gateway review process (GRP) were in place
during GovERP’s implementation; yet these efforts were insufficient to assure on-time
and on-budget delivery. Explain the key challenges or significant missteps that
contributed to ineffective change management and project control and provide
recommendations on what you would do to avoid these pitfalls.
3. Given the complexity of government-led projects and the sensitivity of the data
involved, effective risk management is critical. Identify the distinctive risks associated
with public sector projects, using GovERP’s case to provide examples. What are the
lessons learned (i.e., from GovERP’s implementation) that can help improve risk
management practices in future projects?
4. The waterfall model being a traditional and linear approach to software development,
involves completing each phase of the project before moving on to the next. This unitary,
top-down implementation approach is typical of large-scale government-led projects
and was predominantly applied in GovERP’s case. Critically analyse the pros and cons of
the waterfall approach and contrast these pros and cons with an agile approach. For a
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project like GovERP, would you recommend a waterfall approach, agile, or an alternative
approach? Provide a rationale for your recommendation.
Disclaimer:
The information contained in this case study is to be used only as a case example for teaching
and assessment purposes. The information presented in the case study is drawn from a variety
of sources and may consist of opinions, facts, and hypothetical scenarios. This case has been
formulated for the sole purpose of this assessment and is not intended to be a fully accurate and
factual representation of the subject.
Bibliography
Burton T (2024) The $340m government IT disaster no one cared about, The Australian
Financial Review website, accessed 1 May 2025.
https://www.afr.com/politics/federal/the-340m-government-it-disaster-no-onecared-about-20240821-p5k414
Burton T (2024) $2.2b lost in federal IT fails after fifth project abandoned, The Australian
Financial Review website, accessed 1 May 2025.
https://www.afr.com/politics/federal/2-2b-lost-in-federal-it-fails-after-fifth-projectabandoned-20240819-p5k3ko
Consultancy.com.au (2022) Services Australia select selects EY and Deloitte for
GovERP transformation, Consultancy.com.au website, accessed 1 May 2025.
https://www.consultancy.com.au/news/5348/services-australia-selects-ey-anddeloitte-for-goverp-transformation
Crozier R (2023) GovERP program cost hits $265 million, IT News website, accessed 1
May 2025. https://www.itnews.com.au/news/goverp-program-cost-hits-265-million598167
Crozier R (2024) GovERP axed as reuse review finds demand only for artifacts, patterns,
IT News website, accessed 1 May 2025. https://www.itnews.com.au/news/goverpaxed-as-reuse-review-finds-demand-only-for-artifacts-patterns-610822
DF (Department of Finance) (ND) The new APS ERP approach, DF website, accessed 1
May 2025. https://www.finance.gov.au/government/new-aps-erp-approach
DTA (Digital Transformation Agency) (ND) Government Enterprise Resource Planning
(GovERP), DTA website, accessed 1 May 2025.
https://architecture.digital.gov.au/government-enterprise-resource-planning-goverp
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DTA (Digital Transformation Agency) (ND) Independent GovERP Reuse Assessment, DTA
beta website, accessed 1 May 2025.
https://www.digital.gov.au/initiatives/enterprise-resource-planning/erp-background
DTA (Digital Transformation Agency) (ND) GovERP Technical Assessment, DTA beta
website, accessed 1 May 2025. https://www.digital.gov.au/initiatives/enterpriseresource-planning/appendices/goverp-technical-assessment-5-what-can-bereused-and-how
DTA (Digital Transformation Agency) (2024) New standards added to an updated ERP
capability, DTA website, accessed 1 May 2025. https://www.dta.gov.au/blogs/newstandards-added-updated-erp-capability
Hendry J (2023) Gallagher pulls back ‘naïve’ $344m GovERP project, InnovationAus.com
website, accessed 1 May 2025. https://www.innovationaus.com/gallagher-pullsback-naive-344m-goverp-project/
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accessed 1 May 2025. https://istart.com.au/news-items/goverp-functionalcapabilities-cannot-be-reused/
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Appendix A – Stakeholder Engagement
A cascade of missteps contributed to the failure to gain and maintain stakeholder buy-in
throughout GovERP’s lifecycle:
2017–2018 – Early Design & Alignment Issues
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GovERP planning begins, but stakeholder consultation is limited.
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Agencies express early doubts about whether a single platform could serve diverse needs.
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Development of roadmaps proceed without full input from all stakeholders.
2019 – GovERP Initiative Announced
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Official launch aims to unify ERP systems across six shared services hubs.
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Many agencies are unclear on their roles and lack clarity about transition planning.
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Concerns emerge over a one-size-fits-all approach.
2020–2022 – Project Complexity & Delays
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Initial timelines slip due to technical hurdles, COVID-19 pandemic disruptions, and
unclear ownership.
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Cost overruns begin to mount—eventually reaching $344 million.
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Trust begins to erode, especially among smaller agencies with unique needs.
June 2023 – Public Disclosure of Delays
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Services Australia announces $60 million in GovERP-related work is delayed by a year.
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Bureaucratic processes within the SSSC contributed to slow decision-making and project
delays. For instance, $60 million in planned work was deferred due to unspecified delays,
impacting the project's timeline and increasing costs.
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This adds to scepticism about project feasibility and financial oversight.
August 2024 – New ERP Standards Released
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The Digital Transformation Agency publishes new ERP capability standards.
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However, stakeholders remain unclear on how these standards align with GovERP or what
their role is in adopting them.
November 2024 – Project Abandoned
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The government officially scraps the GovERP project, citing lack of buy-in and a need for
more agency autonomy.
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Confirms what many stakeholders had anticipated — the project had lost legitimacy.
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