Defence picks strategic partners for billion-dollar ERP overhaul

The Department of Defence has begun working with two strategic partners on the first stages of its billion-dollar ERP overhaul, but is yet to decide on the system integrators for the job almost two years after it first went looking.

The ERP transformation, previously known as Defence Insight, will see Defence rationalise the more than 500 applications currently governing its finance, logistics, procurement, engineering, maintenance and estate functions.

The department's hope is that it can rid itself of as many as 80 percent of its largest applications and up to 95 percent of the smaller ones to standardise business processes by 2023, and in doing so address some of the shortcomings identified in its first principles review.

The agency opened bidding in May 2016 for two system integrators to help it move to the SAP Defense Force & Public Security solution that it signed up to as far back as 2015.

This was followed by a second market approach in the latter half of 2016 for strategic partners to take over the planning, vendor management, and change management aspects of the program.

But the department has so far selected only the strategic partners, and is yet to appoint the two system integrators.

“No selection decision has been made regarding systems integrators,” a spokesperson told iTnews.

The spokesperson said Defence was currently evaluating potential partners, and would wait until it receives second pass approval later this year before selecting the system integrators.

Strategic partners

Late last month Defence published separate standing offer arrangements with KPMG and Ernst & Young.

The spokesperson said both big-four consulting firms had been working with the department since the program had received first pass approval in May 2017.

KPMG has been providing strategic partner services under a single $16.1 million deal that will run until the end of June 2018.

It covers “ICT architecture services, market engagement advice, data services, tranche one delivery preparation work and program management services”, the spokesperson said.

Ernst & Young has similarly been providing organisational change management services under a single contract worth $4.5 million.

This includes “change planning and coordination, stakeholder engagement and communications, change impact and business readiness assessments, training and learning services and user experience definition,” the spokesperson said.

The partners were initially invited to perform work between the first pass and second pass government approval stages.

Defence is only expected to be able to commit to long-term contracts when it obtains second pass approval for the program later this year.

The spokesperson said Defence would begin implementing the first tranche of the program immediately following second pass approval. This is expected to be complete by the end of 2020.

"Further tranches of work will be dependent on subsequent government approvals, with a program end-date estimated to be around 2024–25," the spokesperson said.