Guest blog: Zeitgeist – ERP benefits for the commissioning model
Posted by Hilary Pike
Zeitgeist – ERP benefits for the commissioning model Guest blog by Mircea Rogojan-Rush, ERP Consultant at Unit4 partner Methods Enterprise
ERP systems and the commissioning model in local government
Following central government funding reductions and coupled with an increase in demand, we believe the current local government model is unsustainable. This is largely due to faults in design, namely inflexible structures and silo operations with little interface between each other. As a result large areas of business operations function inefficiently, delivering outcomes nobody needs or requested. In addition, similar inefficiency can be seen when it comes to software selection and utilisation. It’s not uncommon for different departments to choose different solutions that meet their specific needs with little thought to the needs or objectives of the wider organisation. The net result can be that core business processes and functions, such as business intelligence, analysis and reporting are not straight forward even at departmental level. The situation needs redressing.
So what is the impact of the new fiscal reality and how is it affecting a local authority’s choice of technology?
The reduction in funding from central government has sent local authorities in search of different ways to deal with the new fiscal reality, and so far commissioning has emerged as a winner. According to the government’s own Commissioning Academy Programme, commissioning allows local authorities to focus on understanding and responding strategically to the needs of their communities. Rather than being involved in business as usual operational matters, a local authority’s role changes to one where it monitors the performance of service providers and ensures that services are delivered efficiently to meet the needs of the wider community.
Let’s look at the role ERP systems play in the commissioning model
The commissioning model demands that local authorities think ahead and consider future software needs. So what are the steps they need to take?
- Firstly, assessing needs so transactional accuracy, reporting across multiple business areas and ensuring access to reliable, comprehensive information.
- Secondly, designing services. They need the ability to run scenarios to assess what is required, when and by whom.
- Thirdly, sourcing providers. This is where procurement modules and running the tender process will be crucial.
- And finally effective monitoring and evaluation processes need to be in place so, ensuring key performance indicators can be set and reviewed and that reporting and spend analysis are timely and accurate.
Typically many local authorities do not have the right systems and solutions in places to meet the challenges imposed by the new commissioning model and are faced with a gap between what they have and what they need to have in order to meet these requirements. This is where an ERP solution can add value and really make change happen.
ERP deployment - it’s all in the timing
At its heart an effective ERP solution collects, manages and distributes critical business, financial and operational information across functional boundaries, in effect breaking down the barriers and silos that exist in many organisations. So far so good but while making the decision to look for an ERP solution is a no brainer, timing is key.
Based on my experience in a large local authority, which was in this very position, there are three available options as to when to deploy ERP. There is overlap in all three scenarios so I’ve classified them based on when the main bulk of activities take place.
1. Prior to beginning the commissioning journey - while it may seem counter intuitive at first, implementing an ERP system before making the transition to a commissioning model offers plenty of benefits. For example, resource wise, the organisation still has the capacity required to procure, fine tune, test and implement a large project; strategically, the new model that it aspires to is still fresh in everyone’s memory, providing the right impetus and taking advantage of the enthusiasm on this side of the bell curve. Financially, provided the budget has been managed with caution, there should still be scope to secure the right solution rather than the cheapest option. The looming question is of course, can the organisation predict the future shape with such accuracy as to design the ERP system a couple of years ahead of the curve? Luckily, software platforms have become more flexible in recent times and agile systems such as Unit4 Agresso have been designed to allow organisations to make systems changes quickly and easily even after implementation.
2. Concurrently. This approach allows all the benefits of the first option, enhanced by a clearer vision as the model crystalises through the various stages of the transformation. In my opinion though, this choice leaves very little room for error. ERP implementation has been proven to be typically a costly and time consuming affair, with many projects going over time and budget significantly. Coupling such an exhaustive task with a complex local authority transformation programme may induce change fatigue and prevent the organisation from excelling at either tasks. So while it may seem like the safest choice in theory, in practice the end result would be a constant warring between competing projects, resources, funds and priorities. Hardly, the cooperative environment required to build a cross organisational commissioning model.
3. Finally, a post commissioning ERP implementation may provide a solution from the gaps in rationale of the first two timing choices. On one hand, the organisation has changed and it knows exactly what software it needs to become successful in the new world and there are no competing major transformation programmes. Also the new model should be conducive to facilitating an efficient procurement and commissioning process as well as a shorter implementation time span. On the other hand, the organisation would be missing out on the benefits that an ERP system offers in expediting its transformation journey; the journey itself may be more fluid than anticipated, making it difficult to decide on the cut off. And of course, the organisation will have to deal with the double whammy of a new commissioning model underpinned by a software not fit for purpose, all this while trying to implement a new ERP system.
Local authorities aiming for the adoption of the commissioning model have or are considering an ERP solution to manage their business and financial processes and information. Of course there are no hard and fast rules when it comes to the choice of ERP or the timing of any implementation but based on my experience my recommendation is to select and embed you chosen ERP solution first and then manage the transition to the commissioning model. This staggered approach allows your inter-departmental teams to understand and utilise the full breadth of ERP capabilities and to maximise your return on investment while placing your resources on the right side of the bell curve prior to any further changes in how you conduct or manage your operations.
Reference: UK Government Commissioning Academy Programme - https://www.gov.uk/the-commissioning-academy-information
For more information about Methods Enterprise please visit http://methodsenterprise.co.uk/