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Why Many Government ERP Projects Fail and the Case for Purpose-built Solutions

When it comes to government technology initiatives, real-world examples of failed enterprise resource planning (ERP) implementations across the public sector are not uncommon. It then begs the question, “Why are governments force-fed commercial software packages that are ill-fitted to meet the unique needs of government?”

The importance of purpose-built software solutions in successful government implementations could not be more pertinent. Yet, many governments continue to turn to ERP systems built for global commercial companies in hopes of streamlining their operations. Perhaps that’s why they continue to grapple with ERP projects that are over budget, over time, cannot deliver expected returns, or all of the above.

The pitfalls of misaligned solutions
There are well understood differences between the business of government and commercial enterprise, and the associated differences in stakeholders and constituents. Government ERP systems must support unique government needs such as fund accounting, complex organization structures, different sources of revenue, budgetary processes and controls, unique reporting models, transparency, and more.

The misalignment of trying to force-fit commercial solutions into the public sector's unique operating environment typically results in a slew of challenges:

  • Workarounds: A lack of critical features leads to cumbersome workarounds and compromises that undermine efficiency and accuracy. These workarounds must be integrated into the business and incorporated into user training and procedures, all of which compound the challenge and effort. 
  • Shadow systems: Over time, “shadow systems” are generated and evolved using the legacy systems, and a misaligned software solution often creates new shadow systems—either as a workaround to support implementation or as end users seek ways to get their work done more efficiently. We’ve all seen the spreadsheets and documents that spin off of a business process not supported by the core solution, or worse, external point-solutions.
  • Risks of non-compliance: Failure to adhere to regulatory requirements and compliance standards poses significant risks for government agencies. It’s critically important to have the ability to create the required financial statements and deliver meaningful, relevant data to those who need it. 
  • Increased complexity: As workarounds, shadow systems, misaligned functionality, and extraneous functionality compound the complexity, it affects all aspects of the operations—leading to higher risks. For example, APIs and interfaces become more complex; users must learn new business processes designed around the software; government financial reports often need a complex redo to accommodate a force-fit chart of accounts; and greater change management efforts are required.

The case for purpose-built government solutions
Recognizing these pitfalls and risks, it becomes evident that a one-size-fits-all approach to ERP implementation is untenable. It underscores the importance of choosing the right technology solutions built for government and only government.

I’ve seen firsthand how governments can mitigate risks, improve operational efficiency, and ensure compliance with regulatory mandates by investing in purpose-built solutions. Solutions like CGI Advantage®—a purpose-built, modern, cloud-based ERP solution for state and local governments—are

built specifically to support the robust public sector needs out of the box.

When investing in a built-for-government ERP system, it’s important to understand the differentiated design functions that are imperative for success. Here are some key considerations:

  • Built-for-government functionality: Is the ERP system designed to meet the specialized needs of government agencies, including fund-based accounting, grant management, annual reporting, and procurement compliance with regulatory mandates?
  • Flexibility and customization: Does the system offer the flexibility to adapt to evolving government requirements while minimizing the need for extensive customization, reducing implementation risks and costs?
  • Security and compliance: Are security and cybersecurity capabilities baked into the solution - prioritizing data protection and compliance with government standards, safeguarding sensitive information from threats and breaches?
  • Client-driven purposeful innovation: Does your ERP provider offer a collaborative ecosystem for user feedback that drives product enhancements and feature development? Does it offer a community of users to share ideas with across state and local lines?

A path forward for government
For most governments, a new ERP system is a generational project that requires significant effort and alignment from stakeholders. Any complex systems project with multifaceted goals, such as modernizing technology, driving business efficiencies, and improving the user experience, is inherently risky, and ERP implementations are no exception.

As governments embark on the journey of ERP modernization, let’s remember why commercial packages are not fit for government’s distinct needs: simply put, they were not designed for them. Choosing the right built-for-government solution can drive successful implementation and better ROI from an ERP investment—forging the path for greater operational efficiencies, enhanced citizen service, and leadership in the digital age.

CGI delivers results for our public sector clients with CGI Advantage ERP. To learn more about state and local governments in California and beyond continue to select CGI Advantage to modernize core systems, most recently Massachusetts, Nevada, Utah, Los Angeles and the City of Dallas, and to learn how it can work for your local government and constituents, visit
CGI manages complex, multi-stakeholder information technology projects, integrating, streamlining and modernizing systems and business processes to reduce costs and better serve citizens.