Page 1 of 2
These days, state-government customers seeking var-implemented solutions may view Enterprise Resource Planning solutions as the Rubik's Cube of IT: There are so many ways the project could take a bad twist that it may not be worth the time, trouble or expense to take it on.
But solution providers and integrators are bringing clarity to the ERP puzzle, and states are biting, convinced that ERP won't be an excessive burden on their resources or a daunting drain on their dollars. In fact, VARs are proving that ERP is the surest way for states to collect more tax dollars, pay vendors, catch deadbeat dads and achieve any number of other tasks--all either revenue-producing or cost-saving. In addition, those older, costly legacy systems are getting replaced. ERP's shared-services tools reduce administrative costs, allowing employees more autonomy in pursuing routine tasks, such as job-applicant screening and driver's-license processing. In other words, solution providers are touting ERP as a money-maker, not a revenue-drainer.
Take Accenture, a solution provider that's seeing a great surge of ERP interest from state-government customers. The company is already working on ERP projects with the states of Ohio and Washington, and it's tracking ERP opportunities in Tennessee and New York as well.
"There's a lot of pent-up demand for this," says Mark Howard, the Denver-based global program director for government finance and performance management at Accenture. He also coordinates support for Accenture's public-sector ERP projects globally.
"What's happening is a continuation of what started in the late 1990s. By 2001, the state-revenue picture looked somewhat cloudy, and putting food on the table for kids on state assistance was more important than implementing ERP. But the revenue picture has improved, and ERP is now back on the table," Howard says.
At a high level, ERP projects feature multimodule applications that cover a wide range of business operations, such as payment collections, inventory oversight, vendor interaction, customer service and order tracking. In many cases, they serve as the spine of government IT. These solutions though often demand that the organizational structure of a state government be revamped to ensure a successful transition.
While there are no exact numbers for state ERP market share or growth, industry execs say it's clearly a burgeoning market. Cambridge, Mass.-based market researcher Forrester predicts a compound annual growth rate of 4.2 percent through 2008 for ERP solution packages. The ERP market is now worth $21 billion.
But many also caution that challenges exist when it comes to providing ERP solutions. In addition to much longer implementation schedules, these expensive projects also can easily become complex with customization and must be managed accordingly. (See "ERP Challenges To Keep In Mind," page 14.)
Pain Points
Jim Krouse, manager of state-and-local government market analysis for Reston, Va.-based researcher Input, cautions that while ERP projects are touted as the "next big wave" of technology investment, there is work to be done for many states before going down that path. "Unfortunately, the systems are large and cumbersome for agencies to implement, and, most of all, expensive. More efforts for centralizing IT authority and consolidating operations must be done in many jurisdictions before a comprehensive ERP application can be tackled," Krouse says. "The most likely scenario is that ERP will be put into place in stages, with payroll functions likely being the first phase. Additional phases will be addressed as the centralization and consolidation efforts are accomplished."
But that isn't stopping some states from aggressively pursuing the deployment of ERP solutions.
"States are implementing ERP projects for many reasons," says Bishwajeet Chatterjee, president of CNSI, a Rockville, Md.-based integrator that has worked on ERP projects for customers such as the state of Maine. "They need to improve, update or replace their legacy equipment. They need to consolidate multiple standalone systems that perform similar functions. And they need to meet higher regulatory standards, such as Sarbanes-Oxley and HIPAA."
There's another value proposition: the expanded opportunity to introduce new, commercial, off-the-shelf (COTS) solutions that will improve agency operations, either immediately or in the near future.
"Commercial, off-the-shelf solutions allow for functionality that would be impossible or costly to retrofit into a legacy environment," Chatterjee says. "Also, COTS software often includes features that may not be used today but could be turned on in the future to expand the use of the product. ERP can provide states with a single solution that covers multiple areas. You can use Oracle's finance and HR solutions together. That means there's only one technology to adapt, one platform and one integrated tech-support team."
|
Public Display: Hot Scenes From XChange Public Sector Hundreds of VARs, integrators, vendors and analysts descended on the Sawgrass Marriott in Jacksonville, Fla., last week for XChange Public Sector. Here's a look at what you missed if you weren't there, from heated health-care and government discussion to just plain heat. |
|
CRN 2010 Public Sector Awards: Meet The Big Winners CRN saluted four vendors and five VARs and integrators at XChange Public Sector in Jacksonville. Have a look at who took home the hardware this year, including Public Sector Integrator of the Year. |
|
10 Burning Questions For The Public Sector Channel As XChange Public Sector kicks off in Jacksonville June 12, here's a look at some of the most pressing issues for public sector VARs and integrators, from cybersecurity and firm-fixed-price contracts to green technology and small business priorities. |
 More
Slide Shows |
