The decade-long, $341 million failure of the federal government’s GovERP project was not a surprise; it was an inevitable outcome of clinging to an outdated IT model in an era of rapid technological change. The project’s collapse is a real-world example of the core arguments in IBRS’s ‘The Future of Shared Services, 2023′ report, which details why traditional, centralised IT models are failing.
The dream of a single, standardised back-office system for government is a relic of a bygone era. As IBRS noted in the Financial Review, the arrival of industrial-level cloud software (SaaS) means agencies can get the benefits of standardisation without the massive build, integration, and consulting costs that doomed GovERP. This is the essence of what we call the fourth-wave of ICT: rent, don’t build.
Modern SaaS platforms inherently deliver most of the promised benefits of traditional shared services—such as cost efficiency, standardisation, and faster deployment—but with far greater flexibility and agility. The GovERP project failed because it was a top-down, monolithic approach that could not cater to the diverse needs of individual agencies. It was bogged down by custom requests and lacked the singular vision and accountability needed to succeed.
The lesson is clear. The role of government shared services must evolve from being builders of rigid, centralised systems to becoming strategic advisors and brokers of SaaS solutions. They should focus on vendor management, inter-agency integration, and cost optimisation, empowering agencies to choose the best tools for their needs while ensuring alignment with broader government objectives. The failure of GovERP is not a reason to abandon shared services, but a powerful catalyst to reinvent them for the SaaS era.
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