Proof in the doing after new digital software mandate

on Thursday, the federal government announced Commonwealth non-corporate agencies must use a new digital marketplace to procure enterprise resource planning, or ERP systems, which are the software used to manage critical business processes such as payroll, human resources and finance.

The marketplace is hoped to open up tenders for the software to small and medium enterprises, after the Albanese government ditched a $400 million whole-of-government contract last year.

Ed Chung, CEO of Brisbane-based ERP provider TechnologyOne, said the sector had been waiting for years for this change.

"It's an exciting time for us and the whole Aussie industry," he said.

Up until now, some departments have had to rely on clunky, outdated solutions, many of which are approaching their use by date and will no longer be supported in the next two years.

Mr Chung said opening the field to smaller players and allowing each department to select a solution that suits their needs would improve workflows for APS staff.

"They're complex systems that aren't built for new generations, some are two to three generations old. Bringing it up to a new generation will keep younger staff happy," he said.

The success of the initiative would hinge upon how the new rules were implemented, Reason Group CEO William Scheer said.

"There's the rules and there's the buying behaviour, and they're not always the same," he said.

In addition to the ERP marketplace, the government has made a number of changes including raising the threshold for SME procurement and changing the definition of an SME, to exclude the local subsidiaries of large corporations.

Mr Scheer said these changes were a step in the right direction, but other moves, including the requirement that government buyers consider local economic benefit, did not always result in tangible changes.

What would have a greater impact would be streamlining the process for businesses to sell to government, and removing upfront costs, including the level of compliance to be allowed onto a panel, before any contracts are awarded, Mr Scheer said.

"You have to apply during a window that is not always open, and there are hundreds of pages of material we have to submit," he said.

"We've been doing it for 17 years, so we understand how the system works, but we have to do our day job as well."