ASX-listed enterprise software house Technology One has managed to circumnavigate a statewide Queensland mandate that all government agencies use SAP software for financials.
In doing so, Technology One's managing director, Adrian Di Marco, took a shot at the Queensland Treasury Department directive that insists even the smallest of government agencies use SAP, despite its lack of suitability.
"Queensland continues not to be cogniscant the fact that there are alternative solutions to SAP that are much better suited to, and more cost-effective, for small-to-medium sized departments," Di Marco said. "They still hold the line that SAP is the only product. That is clearly not the case for the myriad different departments in the Queensland Government. "A spokesperson for the Queensland Treasury Department said the move to a standardised system across Queensland Government was driven by the agencies themselves.
They wanted to be able to share staff and resources with other departments and a tender was put up in 1995. That tender was won by SAP.
"Technology One had a chance to bid for that tender, but withdrew from the process," the spokesperson said. "We now have a contract with SAP. It is as simple as that." Queensland Treasury insists the across-the-board mandate for departments to use SAP needs to be left to run its course. With the successful SAP tender just 18 months to two years into its duration, the full economic and efficiency benefits have yet to manifest themselves, Treasury said.
"We are still convinced of SAP's ability to deliver savings and efficiencies to Queensland, and we need to generate those efficiencies," the spokesperson said.
"It makes no sense to change software before it has had a chance to run its course.
"Generating the full benefits from SAP will take six years," the spokesperson concluded. "There will be reviews along the way as we understand that technology changes." Another financials software vendor that comes up against the SAP bloc in Queensland Government is Navision. Garth Laird, Navision's managing director, pointed to other state-based legislative bodies that have a panel of options that the various agencies can select from.
"If Queensland wants to run like an efficient corporation, it should be looking at corporate best practices," Laird said. "A one-vendor strategy doesn't create competition.
"All the departments are having to balance their budgets and achieve efficiencies but if they are not allowed to look at alternatives, this will be difficult to achieve." Both Laird and Di Marco agreed the SAP ERP solution is an excellent piece of software. What they were disputing was its suitability to some of the smaller Government agencies.
"It's horses for courses," Di Marco said. "SAP is a great product but it doesn't suit all scenarios." Queensland-based industry sources estimate expenditure on the across-the-state deployment and maintenance of SAP to already be topping $100 million.
Queensland Treasury officials would neither confirm nor deny this but did say that initial implementation expenses were always going to be heavy.
"The issues of implementing any software are expensive, but at some point you are always going to have to bear those expenses," the Treasury spokesperson said.