Supply chain globalization and continuous employee churn make operating in the public and government sectors harder than ever, while the growing demand for public services makes the situation even more challenging. After all, companies providing education, welfare, and other services to the public have to handle increased workloads with fewer resources, which can negatively affect service quality.
Digital transformation initiatives, such as ERP software development, are aimed to help government and public sector companies address these challenges. By implementing an ERP system, a company can centralize, automate, and optimize disparate work processes, including finance, logistics, and human resource management, thus enhancing overall organizational efficiency.
This article provides four use cases illustrating the advantages of ERP adoption for government and public service companies.
More accurate planning and budgeting
Generally, government and public sector organizations operate within predetermined and strict budgets. Securing additional funding after budget approval is nearly impossible, making careful and accurate budget planning a critical task.
Comprehensive ERP solutions automate labor-intensive budgeting and planning activities. Thus, government and public sector companies can quickly produce accurate budgets and forecasts with less time spent on manual data consolidation and management, contributing to their business performance.
Budget managers can use ERPs to track and analyze corporate financial data, including sales, revenues, profits, and cash flows, identify trends and patterns in business performance, and make more intelligent budgeting decisions. Utilizing predefined budget templates further streamlines processes, minimizing legal documentation errors due to reduced paperwork.
Budget managers can also explore additional factors impacting the budget and create accurate financial forecasts for the upcoming period. For instance, budget specialists can factor in maintenance activities and additional inventory into future budget planning after analyzing data on equipment service requests in a centralized ERP data storage.
Enhanced sourcing and procurement
Supply chains in the public and government sectors are becoming more complex and global, making sourcing and procurement more challenging for companies.
According to Deloitte (News - Alert), the majority of government companies lack supply chain visibility beyond tier-1 suppliers. This hinders companies from assessing supplier performance, including suppliers of critical components, and identifying potential supply chain disruptions in a timely manner, which can negatively affect service quality.
ERP software helps companies track the movement of components and other types of inventory, making it quick and easy to identify procurement delays that could lead to supply chain disruptions.
Moreover, companies can dynamically optimize their inventory management activities by tracking purchase orders. For example, by accessing data on the anticipated inventory, including amount and timing, inventory managers can assess the necessity of maintaining safety stock in case of possible delays.
In addition, ERP facilitates purchase order (PO) automation within companies. Managers utilize ERP software to monitor reorder point thresholds. Once it’s time to restock, the system automatically generates and sends the purchase request to the appropriate team member for approval and, if approved, to the supplier.
Streamlined human resource management
Public sector and state-owned companies continue to experience a growing shortage of qualified personnel, especially for hard-to-fill vacancies, which are significantly higher in the public sector (51%) than in the private sector (34%), according to CIPD. The economic recession, which drove the workforce to apply for jobs in the public and government sectors in recent years, has slowed down, and it is one of the reasons for this shortage, as highlighted by Deloitte.
Given this context, managing and retaining the existing workforce can now be considered critical for public and government sector companies.
An ERP platform with human resource management (HRM) capabilities can provide HR team members with centralized access to employee data, including contact information, attendance, work history, certificates, and qualifications. Since the critical data is always at their hands, human resource specialists can easily monitor and analyze key HR metrics, such as the absence rate, employee retention, and engagement.
Moreover, ERP allows companies to centralize and automate benefits management, including health insurance and retirement plans. With in-built benefits management functionality, HR professionals can efficiently distribute corporate benefits among individuals or company departments, which helps ensure employee satisfaction and reduce churn.
A robust ERP system can also include a performance management module, which helps companies better manage and retain their workforce. This module enables HR managers to analyze the performance of a company’s departments or individual team members, determine skill gaps, and plan employee training accordingly.
Improved regulatory compliance
Regulatory compliance is crucial for companies operating in the public and government sectors. Due to their work specifics, these companies must provide services, maintain financial records, and manage procurement in strict accordance with national, local, and industry-specific regulations. In case of violations, a company risks receiving reputational damage or legal fees.
With the proper in-built functionality, ERP can help a company maintain compliance. For example, ERP for healthcare must include features such as data encryption and role-based access control (RBAC) to help a company maintain HIPAA compliance and ensure patient privacy.
Final thoughts
Managing talent shortages and increasing logistics complexity make operating government and public sector companies more challenging than ever. However, ERP implementation allows companies to overcome these challenges by optimizing aspects such as budgeting, compliance, procurement, and HRM.
A custom solution can be the most promising option for ERP adoption, as it is tailored to a company's unique processes and requirements. If a company lacks IT expertise and resources to create a bespoke solution, it can entrust the development to third-party ERP engineers. The latter will deliver ERP that fully aligns with the company's business needs and fits perfectly into its digital ecosystem.
