Government dumps Coalition's 'naive' approach to procuring services

In a move which she says will increase opportunities for small and medium businesses, Finance Minister Katy Gallagher has announced that the previous government's centralised approach to providing so-called enterprise resource planning solutions will be scrapped.

Under the Coalition government's GovERP program, there was a common platform to deliver back-office functions like financial management, human resources and procurement services.

Senator Gallagher the program, which cost $400 million over six year, was an expensive flop that had failed to deliver what departments and agencies needed.

"It was based on naive ideas about the ability to standardise complex corporate systems across 100 or so organisations," the minister said.

"The fact that the Liberals/Nationals locked in long-term deals for the GovERP program without proper consideration of competition is remarkable."

Under the revised approach, the Digital Transformation Agency will invite tenders from enterprise resource planning program providers, assess the offers, and those that are approved will be placed on a panel that agencies can then select from.

Senator Gallagher said the new process will allow government entities to choose appropriate and cost-effective solutions while boosting competition and increasing opportunities for smaller providers.

The move comes amid concerns that many small Canberra firms have been hit by the government's shift away from external contractors.

Small operators have complained that commonwealth work is "drying up" as the federal government has crack down on the use of external expertise.

In this environment, Canberra Business Chamber chief executive Greg Harford said the government's change was "a positive step".

"The Canberra Business Chamber is supportive of opportunities for Canberra businesses to participate in providing solutions to government," Mr Harford.

"It is a positive step that agencies will have more autonomy to determine the solutions that best meet their needs, and we wait to see the detail around the processes to be followed by the Digital Transformation Agency."

The business leader said it was important that government procurement processes were "open, competitive and tested regularly".