"Recently I attended #GFOA2024. I was sitting in a large conference breakout room with approximately 200 attendees and the session speaker asked, “How many of you are considering changing ERP systems in the next year?” I was amazed to see the hands raise around me and as I assessed the room, there had to be 80% who planned to make an ERP switch” – Ian Scotland, Vice President and General Manager, AccuFund.
Enterprise resource planning (ERP) systems aren’t new, but they are new to some people. These software platforms integrate multiple systems into one, providing exceptional 360-degree visibility into data throughout an organization. It’s hard to imagine running a large organization today without some type of ERP system. Yet Ian’s experience, above, isn’t uncommon. Many governments and municipalities have yet to discover the power of an integrated ERP platform that improves efficiency and enables real-time data visibility into all aspects of their work.
Why are many government organizations interested in ERPs? Why now, and how do you take the first steps on the road to finding and purchasing the best government ERP for your needs?
Why Make the Change to Government ERP Systems?
Governments are increasingly interested in adopting ERPs, and with good reasons. ERPs aren’t new – they’ve been around since the 1990s – and they have a long history of providing improved efficiency for both for-profit enterprises and nonprofits. Now, with governments feeling increasing need to modernize their systems, many are exploring ERPs as alternatives to stand-alone accounting and other systems.
Leave the Legacy (Systems) Behind
The time is right to leave legacy systems behind. Many governments struggle to maintain old, aging systems. Some are no longer supported by the original vendors. Over time, such systems lag in comparison to modern, cloud-based systems. They may lack features that constituents and stakeholders demand or they may be difficult to integrate into newer systems that are browser based.
Cloud Computing Offers Scalability, Flexibility, Security and Cost Savings
Another reason why governments may wish to move to ERP is a drive to shift their systems to the cloud. Cloud computing offers unparalleled scalability, allowing organizations to easily adjust their computing resources in response to fluctuating demands without the need for extensive upfront investments in hardware. This flexibility extends to deployment models and service options, enabling organizations to tailor their IT environments precisely to their needs, accelerate the deployment of new applications, and foster greater agility in responding to market changes.
Cloud-based systems also provide enhanced security by leveraging the robust measures and expertise of cloud providers, often surpassing what many governments can achieve on their own premises. This includes advanced encryption, threat detection, and compliance with regulatory requirements, bolstering data protection and privacy.
Additionally, cloud services offer robust disaster recovery and backup solutions, ensuring business continuity in the face of unforeseen disruptions.
Many legacy systems cannot offer the latest technologies as part of their platform without significant investments in updates. Cloud systems, on the other hand, provide access to cutting-edge technologies such as artificial intelligence, machine learning, and big data analytics, which are integrated into cloud platforms.
Improve Efficiency: Consolidate All Systems into One Platform
One of the benefits of using an ERP is efficiency, and governments are under a great deal of pressure to become more efficient. Constituents hate waste, whether it’s wasted tax dollars or wasted effort, and you probably do, too.
Government ERP systems can significantly improve efficiency in several ways:
• Centralized Data: ERP systems integrate various business processes and departments into a single system with a centralized database. This eliminates the need for separate systems and data silos, reducing duplication of effort and ensuring data consistency. Employees can access real-time information without relying on manual updates or transfers between different systems.
• Streamlined Processes: By automating and standardizing processes across the organization, ERPs reduce the time and effort required to complete tasks, minimizing errors and improving overall accuracy.
• Improved Communication and Collaboration: An ERP improves communication between teams, enhances collaboration on projects, and reduces delays caused by miscommunication or lack of information. Because all data is in one location, employees can easily access, share and update the system, thus improving communication and collaboration.
• Data Visibility and Analytics: With an ERP system, managers have access to comprehensive data and analytics that provide insights into various aspects of government work. This visibility enables informed decision-making, allowing businesses to identify inefficiencies and improve processes.
• Resource Optimization: ERP systems help governments optimize their use of resources, including personnel and fixed assets. By aligning resource allocation with priorities and demand forecasts, ERPs reduces waste and ensures resources are used efficiently.
• Regulatory Compliance: Government ERP systems often include built-in compliance features that help organizations adhere to regulatory requirements and standards. This reduces the risk of non-compliance penalties and ensures operations meet legal and regulatory obligations.
While an ERP alone won’t turn your department into an efficiency machine, it will improve it dramatically. Combining an ERP with a review of processes and a systematic approach to boosting productivity, however, can make a big difference and help you achieve goals and KPIs.
Enhance Transparency and Improve Audit Trails
Another reason why governments are increasingly adopting ERP systems is their unique ability to foster transparency. Governments spend a great deal of money on the public sector, from infrastructure to public programs. Constituents demand transparency into how their tax dollars, utility payments, and other fees paid to governments and municipalities are managed and used. Transparency fosters trust; lack of transparency, distrust into governments.
One of the benefits of cloud ERP systems is their ability to consolidate and integrate data from various sources into real-time reports. These reports can be shared with stakeholders and constituents to improve transparency into government spending and accountability, thus improving communications and fostering greater trust in the community.
Another aspect of transparency lies with audit trails. ERPs support clear audit trails and make the auditing process easier by consolidating data into one system. Instead of rushing about collecting reports from various departments or systems, all the information is found in one place. The audit trail is captured within the system, providing yet another layer of transparency to all.
Up to Date Technology for a Modern Workforce
Imagine that you drive to work, but once at work, you must drive a vehicle owned by your employer. Wouldn’t it feel strange to drive a modern hybrid car to work but switch to a 1920s Model T Ford? You’d have to move from automatic to manual transmission and even manual brakes and steering instead of power brakes and steering! Both the employees and the people they serve would think the company is hopelessly out of date and behind the times.
Yet a similar scenario plays out daily when it comes to government accounting and other computer systems. Your constituents are used to their iPads, smartphones, and laptops. They’re used to logging into a banking app and making a quick transfer or paying a bill. They love self-service options like checking their balance or depositing checks remotely.
However, if they must interact with government systems – utilities, licensing fees, real estate or property taxes – it can feel like the system is stuck in the 1990s.
Modernizing your government’s tech platform to keep up with the times isn’t just nice to have today; it’s a must-have. Without modern systems, you’re spending more time and effort than necessary to provide service to your constituents.
Staff Needs Modern Equipment, Too
And what about those who work for your government? They also use modern equipment at home. But when they come to work, what’s it like? Are you asking them to make do with systems that don’t communicate with each other, need constant babying just to function, or just can’t keep up with the times? It’s yet one more factor driving the change from legacy systems to government accounting and ERPs.
Self-Service Capabilities
Can your current system offer constituents self-service options? Many legacy systems cannot integrate easily with online bill paying systems or other systems that would enable governments to offer self-service options.
Not only do people prefer self-service options but offering them to your constituents would save time and money. Local governments might see tremendous improvements in efficiency and cost-savings by offering self-service capabilities. These may be other considerations to factor into the decision to update to government accounting or ERP systems.
If It’s Time to Make the Change – Now What?
So far, we’ve talked about the many reasons governments are looking to upgrade and make the switch to ERPs. From improved efficiency and transparency to adding self-service capabilities and modernizing systems, there’s increasing desire to shift to an ERP.
What’s the next step?
Gather the Requirements for Your Government ERP System
First things first: before you shop for an ERP, it’s important to understand your organization’s requirements. Gather internal stakeholders together to discuss their wish list. Begin the process of brainstorming the functions you’d like to have on the new system as well as reports. This is just an initial brainstorming session to gather as much information as possible. Once you have your list, you can begin researching potential systems.
Later, when you have chosen a vendor and platform, you’ll work together to clearly define all requirements. The initial list that you put together forms an important starting point for that discussion.
Who should be on the team?
Anyone who will interact with the system! Of course, the IT team should be involved, but you’ll also want operations, human resource, accounting, and finance involved, too. Make sure that all internal departments are represented in the initial requirements brainstorming meetings and throughout the evaluation and selection process so that everyone has an opportunity to voice their needs and to ensure the final selection meets all departmental requirements.
Research Government ERP Options
There are many ERPs on the market. It’s time to do your research. Not all ERPs are created equal. An ERP built for general business needs or nonprofits may not have all the features you need for government work. Look for ERPs specifically created for government needs.
Next, ask colleagues for recommendations. They may enthusiastically recommend the software they’re using, or they may share companies on their shortlist, too.
Recommendations are a great way to gather a list of potential vendors quickly, but don’t overlook internet searches, too.
When you have a shortlist of options, it’s time to set up appointments with vendors. Do a deep dive into how each system works. Download and share their marketing materials and sales literature with your team. Meet with potential vendors and participate in demos. Representatives from each department should participate in the demo sessions, too, to ensure they understand the potential system and feel it meets their needs.
Technology Resources
The great thing about cloud-based ERP systems is that they run on any internet-enabled device, so you don’t need to purchase expensive hardware. But if you choose another on-premises system, you may need to invest in servers, new computers or laptops, e-readers, and more.
Now the Big Question: Costs
Depending on the effort required, the size of your organization (and the number of users), any custom programming needed, and whether you choose on-premises or cloud systems will affect the cost. It may make sense to explore your options now to budget for the purchase in the next fiscal year. If you can demonstrate money saved through the implementation, or efficiencies gained, you may be able to make a strong case to internal stakeholders and constituents to budget appropriately for the purchase of a government ERP system.
ERPs and Government Accounting Systems – Time to Make a Change?
If you’re like the 80% of people in the audience that Ian remembered raising their hands at the start of this article, we hope that this article helped you understand how government ERPs and accounting systems can help. It can be challenging to make the case that it’s time to move from your legacy systems or spreadsheets to government accounting software. But with new and tech-savvy team members joining your staff, constituents expecting self-service options, and new and exciting productivity and efficiency tools available, it’s time to make a change.
Related Materials
Critical Considerations for Purchasing a Government Accounting System White Paper
Ultimate Guide to Government ERP and Public Sector ERP Blog Article
AccuFund Government Product Webinar
About AccuFund Government Accounting
AccuFund Government Accounting is specialized software designed to meet the unique financial management needs of government agencies and non-profit organizations. It offers comprehensive features for budgeting, fund accounting, grants management, and compliance reporting. The software emphasizes ease of use and customization, allowing users to streamline financial operations, track expenditures against budgets, and generate detailed financial statements and reports for stakeholders.
AccuFund Government Accounting aims to enhance transparency, efficiency, and accountability in financial management, making it a valuable tool for entities navigating complex regulatory environments and stringent reporting requirements.