The NSW government has reduced its central enterprise resource planning (ERP) sourcing deal with SAP by more than $1 billion, citing licence consolidation across clusters.
The modification corresponds with the government’s most recent efforts to unify ERP systems across many clusters in an effort to save future expenses while improving overall efficiency and productivity.
The first whole-of-government contract was signed in March 2008, allowing agencies to purchase “ERP software solutions, both perpetual and cloud software licences.”
It is codenamed C2601, and it includes software in sectors like as finance, human resources, payroll, and customer relationship management, as well as S/4 HANA, until March 2023.
However, more than a year before the agreement’s expiration, the expected cost was reduced from $1.65 billion to $475 million over 15 years.
A spokesman for the Department of Customer Service informed iTnews that the change was “related to the calculation and consolidation of licences across clusters,” without going into further detail.
According to the spokeswoman, the “whole-of-government agreement does not contain any expenditure obligations from the NSW government.”
The ERP system is “currently licenced by numerous agencies under the whole-of-government [with SAP] arrangement.”
“The agencies covered by contract DICT/9374 are presently using SAP ERP central component (ECC) licences and will upgrade to S/4 HANA throughout the life of this contract,” stated a spokeswoman.
According to the spokeswoman, the deal also “enables the consolidation of these licences under a single company, DCS, for convenience of administration and operation.”
While both contracts include licence consolidation, the DCS stated that they are separate and distinct.
The whole-of-government agreement was developed as a consequence of a “non-tender,” according to the government’s eTendering website.
