E-Government Management Practice: Enterprise Resource Planning

Literature Review

ERP data is often spread throughout different government functions such as accounting, project management, purchasing and procurement, and supply logistics. Wittmann & Cullen (2000) suggest that such data is a key value driver. In many government organizations it remains an untapped source of core government business data. It could be that this is because its value is not fully recognised by government managers, or that some or all of these functions have been outsourced to an external provider and so have become opaque to management. While outsourcing may seem an attractive option, outsourcing such a core function leads to dependency upon external, often rent seeking, ERP vendors. Such rent seeking can take the form of demands for system and software adoption and upgrades, specialist training for staff, ongoing license fees on a per user basis, consultancy fees, special service fees and so on. Once committed to such ERP arrangements, it is difficult to break out of such contracts without suffering heavy penalties. But to remain in the arrangement is also very expensive (it becomes a most effective monopoly for the ERP vendor).

The benefits of ERP are that it enables masses of information, previously dispersed and fragmented, difficult and expensive to bring together manually in a timely way, to be brought together and interrogated in seconds (Wailgum, 2007). This contributes to improved e-government efficiency and effectiveness, and to a lowering of an e-government’s transaction costs and environmental impacts. Because ERP can be used to collect, correlate, track and aggregate electronic transactions quickly and easily, it has the potential to become a valuable source of strategic and operational knowledge for management, with cost saving and performance management potential. For example, an ERP system enables various data from functions such as accounting, finance, logistics, e-procurement, and project management to be collected, collated, coordinated, and disseminated through active, layered, routine or special performance reports. ERP systems may be designed to record and provide data for measuring critical aspects of ‘core’ business operations across an organization, from strategy development, planning and execution. performance measurement and management. operations and control. An ERP system can continuously report to management the knowledge of which can be used to measure and hence evaluate organizational performance, processes and functions that were previously hidden, disparate or disjointed (Bouret, 2005). Through these means, ERP creates a single, central repository of timely, accurate data and assists in providing information so that more effective resource allocation decisions can be made by management (Business Software, 08).