Selecting an ERP for Government Institutions

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In many ways, governments are very dissimilar to manufacturing companies. You can probably make up your own list of differences, with varying levels of profanity. In some very important ways, though, governments are very much like large companies.

They oversee assets, pay people, manage technology, collect on debts, have documents to manage, and oversee projects. As it turns out, that makes governments perfect candidates for ERP systems.


ERPs are designed to give institutions one view of the truth and a central location for all of the daily tasks that make a complex system tick. You can move projects and customers between departments – think billing, communications, collections, etc. – while laying down a clear audit trail.

Likewise, you can move projects from accounts payable to inventory to an asset management system. Then you can drop the resulting assets into an accounting package for depreciation and tax purposes.

While the general ERP-model overlays onto governments, there are important differences to keep in mind during the planning and implementation phases – unless you’re a big fan of failure, that is.

Important differences to government ERP implementation

We’ll talk about specific issues to be on the lookout for in a moment, but, first, let’s take a second to think about some of the ways that the needs of governments differ from those of business. Most of these come down to structure and resource allocation, which both have very different layouts in the public sector.

The obvious first new hurdle is the way in which funds are allocated in government. Yearly budgeting leaves very little room for flexibility as the months roll on. Planning for an ERP in government means having time and funding requirements in place well ahead of time.

While businesses should have similar plans in place – leaving an ERP until the last minute is, of all plans, the worst – governments need to work within very constrained budget cycles and work timelines.

If ERP implementation runs long at Toyota, for instance, the company can just allocate funds to the next budget to complete the job. In government, there’s a real chance a new budget won’t pass with the additional funds or that change in leadership could kill the whole process halfway through.

Speaking of change management, government employees have to have plans in place should horses be changed in midstream. If your mayor gets replaced during the implementation or planning phase, you need to have a system in place to either update them quickly or to move ahead without approval from the elected level.

An ideal government ERP implementation would have almost no overlap with appointed or elected officials. That would ensure the most continuity regardless of political swings. Unfortunately, that system would almost certainly run into funding hurdles, as politicians are going to be the ones in charge of the purse strings.

You can plan ahead for some of these bumps, though, by presenting and viewing an ERP as a long-term project. No one should expect to see massive efficiency changes in the first year. This is a project that is going to save money over a five- or ten-year period.

Presented with that time horizon, officials may give the project more leeway to spend the money required upfront. You may also find that, when new elected folks roll in, they’re less anxious about keeping the funding in place.

With all that in mind, government ERP implementations are going to do best when there are as few hurdles in place as possible. Getting the five departments all in a room and getting a non-appointed head to act as the project representative is going to help you out in the long run.

You’ll have continuity, separation from the whims of elected officials, and a single point of contact for all your planning and strategy. In short, the best team for a government ERP implementation is a small team.

Traps that everyone needs to watch out for

Even though you’ve got a small team, you need to manage communications and issues across the entire organization. Spending all that money to set up an ERP designed to overcome all your operational issues is going to look pretty stupid if you didn’t ever include anyone from public works in the discussion.

That single point of contact you put in place earlier now needs to become the mouthpiece for an entire department. They need to be collecting input from everyone on their watch on a regular basis and passing it on, in slimmed-down form, to the ERP implementation group.

As in business, this planning should all be happening early on in the process. Communication and planning are the two most important steps to a smooth ERP implementation. Government implementations are especially time-sensitive due to the nature of their funding.

Large expenditures may come up for debate, alter the course of budgetary hearings, or may require extra time for public comment. Plan ahead, plan ahead, and plan ahead.

Government-specific issues aside, everyone thinking about an ERP should have clear expectations regarding outcomes and timelines. Panorama Consulting, in its article on The Real Reasons Why ERP Implementations Fail to Deliver to Expectations lists unrealistic expectations as reason number two.

Having a skewed perception right out of the gate means failure is almost guaranteed. “Unrealistic expectations result in unrealistic budgets and resource allocations, causing corners being cut when it becomes clear that there are inadequate resources to get the job done,” according to Panorama.

In summary

For a government entity to make an ERP implementation as painless as possible from start to finish, there are five keys that need to be in place:

  1.       Communication, early and often.
  2.       A project budget that is in line with the government’s larger budgetary process.
  3.       A clear set of leaders in place to make final decisions.
  4.       Realistic expectations about delivery.
  5.       More communication.

If you have these, you’re set up for success. Getting an ERP up and running is still going to be a huge process, but you’ve laid the groundwork for a good implementation.

If you’ve got a good plan in place and now you’re starting the search for a vendor, check out Capterra’s ERP directory. We’ve got over 300 different options for you to look through and you can read reviews, compare features, and check prices.

Looking for Logistics software? Check out Capterra's list of the best Logistics software solutions.

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About the Author


Andrew Marder

Andrew Marder is a former Capterra analyst.


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