AccuFund Blog Is It Time for a Change? Updating to Government ERP from Legacy Systems

"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) BehindThe 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 SavingsAnother 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 PlatformOne 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 TrailsAnother 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 WorkforceImagine 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, TooAnd 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 CapabilitiesCan 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 SystemFirst 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 br