The modern ERP requires modern mindsets

Ongoing digital transformation in the Australian public sector has brought agencies to a point where they must decide whether to remain faithful to the existing approach, or adapt to meet new demands. Continuous investment has been made in enterprise resource planning (ERP) and other associated systems that are aimed to streamline backend operations and enhance service delivery, but real-world progress has left room for more opportunity to enhance this. As we move into the future, these systems — once believed to be comprehensive solutions for agencies — require new perspectives to thrive in the dynamic needs of modern government.

The Department of Finance, which revealed its new Australian Public Service ERP approach in January 2025, has said that government agencies are now actively revaluating their strategy and approaches. This is a strong step forward, as there is great opportunity to move away from traditional ‘rip-and-replace’ approaches that have seen shortcomings. Instead, governments must embrace new thinking now rather than falling into the patterns of the past.

Addressing pressures with the agility layer

Globally, ERP systems have been challenging no matter the industry, with Gartner predicting more than 70% of recently implemented ERP initiatives will fail to fully meet their original business case goals. Locally, the success of existing ERP systems has been moderate, with budgeting and outcome challenges. As we move forward, if the public sector chooses to keep taking the path of ripping and replacing ERP systems, it will continue to create modernisation hurdles, and slow the growth that Australian government agencies could achieve.

When enterprise resource planning systems underperform in the Australian public sector, agencies have typically chosen to move on from the solution in its entirety so they can implement a new system. However, this causes disruption to the agency, affecting operations and requiring further investment. Looking to break free of this cycle, forward-thinking government agencies are introducing what’s known as the ‘agility layer’.

Instead of replacing existing ERP systems and investments, an agility layer works alongside the solution to optimise and extend its capabilities through workflow orchestration and responsible AI automation. It will support areas where the ERP system is working well and delivering value for agencies and Australian citizens, while also enhancing other areas that don’t meet requirements. This also enables government agencies to overcome traditional rigidity in their approaches, and introduces the flexibility to navigate new challenges within the public sector.

The agility-layer approach has already been known to deliver proven results. It will help Australia’s government agencies deal with the rich complexity of transformation challenges from technology fit to stakeholder and organisational change, as well as regulatory requirements, and will support the optimisation of digital investments.

Agile ERP means an agile Australian Government

It is now more than ever necessary that Australia’s public sector is dynamic enough to thrive in the face of modern government demands. At a time where agencies are facing budget constraints and evolving challenges, the ability for enterprise resource planning to be as adaptive as possible is crucial. There are a number of benefits to implementing an agility layer.

Reducing risk and cost

By building on existing ERP investments rather than replacing them, government agencies can achieve modernisation while also significantly reducing risk and cost. Agencies can utilise their existing investments and upgrade where it makes sense.

Research from Deloitte indicates that organisations taking an incremental approach to system modernisation typically reduce implementation costs by 30–40% compared to full replacements.

Accelerating transformation

Introducing an agility layer enables incremental improvements to business processes, delivering short-term success while positioning agencies for long-term growth. This contrasts directly with multi-year ERP implementations that more often than not deliver outdated solutions by the time they’re completed.

Accenture has found that agile modernisation leads to return-on-investment 15 months earlier than traditional methodologies.

Enhancing user experience

Government staff will also benefit from intuitive interfaces, reducing training requirements and increasing productivity. Agile ERP systems build a single, consistent experience and front door for those leveraging the solution, and provide an opportunity to better integrate services; not to mention disruption to employee operations is minimised, building trust and buy-in.

Futureproofing government agencies

As technology changes and government requirements evolve, the agility layer can keep up with modernisation without affecting core ERP functions. This is particularly valuable for government agencies that must respond efficiently to policy changes, service needs and legislative requirements.

As identified by the Australian Digital Transformation Agency, adaptability is the number one factor in sustainable government technology investments.

Change must take place now

The Australian Public Service stands at a critical crossroads. By moving away from existing rip-and-replace mindsets and embracing an agility layer within ERP and other systems — which uses responsible AI and workflow automation to build on existing solutions — government agencies can successfully optimise digital investment, achieve outcomes in areas of need, and deliver the responsive, efficient back-end services that are imperative, all without discarding the valuable systems already in place.

The evidence is compelling: traditional ERP implementations in government settings have not lived up to expectations, and a more dynamic strategy focusing on legacy system modernisation can be a solution. The agility-layer approach offers a strong alternative that acknowledges financial realities while opening the door to genuine digital transformation. Government agencies will not just keep up with the modern public sector, but thrive in it.

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