SAP announced yesterday that its Business ByDesign SaaS ERP solution was selected by the NSW government’s Trade and Investment department, which it says is its first cloud platform win in the public sector in Australia. SAP was awarded the contract after a public tender process.
The state government’s decision to put its faith in the cloud drew praise from Ovum’s Research Director IT Asia/Pacific, Dr Steve Hodgkinson, who said that NSW Trade & Investment was to be “admired for embracing a new model for public sector ICT procurement.”
“This will be an interesting project to watch because it is charting new territory in government use of cloud services in Australia.
Dr Hodgkinson said SAP had stated that the project was its largest SAP Business ByDesign win globally to date, as well as its first cloud platform win in the Australian public sector.
“Many eyes, therefore, will be on this project and SAP will need to put its best foot forward. Cloud sceptics will be eager to see it fail. Cloud proponents, on the other hand, will be keen to see both SAP and the agency succeed in taking a major step into the future of public sector ICT-enabled innovation.”
According to Dr Hodgkinson, the timing of the NSW Government project and the decision to deploy in the cloud was good for three reasons.
“Firstly, the benefits and risks of the cloud model are becoming better understood – and the department has gone into this project with a pragmatic, strategic, approach and with its ‘eyes open’. Secondly, the maturity of cloud services is evolving rapidly, particularly with regard to the management of the data sovereignty, record keeping and security requirements necessary to obtain the trust of risk-averse government executives and procurement officers.
“Thirdly, the crisis of confidence in the ICT capabilities of agencies, particularly in a shared services context, shows no sign of improving. Recent budget cuts mean that it is now difficult for agency executives to pretend that either the ICT status quo or traditional under-invested in-house approaches to application consolidation and sharing are sustainable.”
Despite what he describes as the “crisis of confidence” in the ICT capabilities of government agencies, Dr Hodgkinson says that, in contrasts, confidence in cloud services is growing rapidly.
“The promise that cloud services might actually be better, faster, less expensive and less risky than previous ICT projects (as was demonstrated in the recently published Ovum report Practical Steps to the Cloud for Government Agencies) is an attractive and timely proposition. The eyes of agency executives in all jurisdictions, as well as throughout the ICT industry, will be on this project.”