A statement from Microsoft said the department had connected its protected network to Azure AU Central in order to develop and deploy the new ERP. IBM will act as the systems integrator for the project.
The company said the modernisation program would lead to better financial reporting capabilities and a bigger logistics and maintenance capability in two years.
Microsoft was certified as a Protected cloud provider by the Australian Signals Directorate in April last year, but that system of certification has now been junked and the certification only holds good until 30 June. This may be the reason why the announcement was made before the end of the financial year.
The ASD later said that the same standards applied to all companies that sought Protected cloud certification. The agency announced it was ending its role as the certifying authority for Protected cloud in March this year, saying it was the culmination of an evaluation process that had begun in July 2019.
In its statement about the defence deal, Microsoft said the ERP system would be used by personnel based in Australia and also those deployed overseas, with about 85,000 users to be supported once it went live.
Microsoft Australia managing director Steven Worrall said: "The Department of Defence is a significant user of Microsoft Office 365 and Dynamics 365 clouds. We are very proud to have been selected to provide the cloud foundations for this nationally important transformation that will provide a near real-time view of critical information across Defence to better inform decision making.
"ERP will modernise, integrate and transform defence’s approach to managing its finances, human resources, logistics, engineering, maintenance and estate with Azure delivering the performance, security and resilience which is essential for such a critical application."
SAP Australia and New Zealand managing director Damien Bueno said: "SAP S/4HANA is the first significant workload that defence has migrated to the cloud and continues the Australian Federal Government’s commitment to best-in-class digital infrastructure and operations. The combination of SAP S/4HANA and Azure ensures the security, performance and scale that Defence needs for such a mission critical system.
"We have deployed SAP’s next generation Model Defence Organisation solution that brings together best practice digital processes covering logistics, finance, engineering and maintenance for defence forces. The Department of Defence will be the first organisation globally to use the next-generation Model Defence solution, which will deliver significant efficiencies, flexibility and resilience.
“We are delighted to be working with Microsoft and the systems integrator, IBM, on this nationally important initiative.”