Ovum: Ovum Comment: NSW Trade & Investment / SAP Business ByDesign deal an important proof point for cloud services in Australia Jul 25, 2012 – Steve Hodgkinson
SAP announced yesterday that its Business ByDesign SaaS ERP solution was selected by the NSW state government’s Trade and Investment department following a public tendering process.
Dr Steve Hodgkinson, Research Director IT Asia/Pacific for Ovum, comments:
“This will be an interesting project to watch because it is charting new territory in government use of cloud services in Australia. NSW Trade & Investment is to be admired for embracing a new model for public sector ICT procurement. The hope is that the multi-tenant architecture and configurability of the SaaS solution will enable the many agencies within the Trade & Investment portfolio to use it as an efficient and flexible shared service. If this hope is realized it will be an important proof point for the efficacy of the cloud services model as an alternative to more traditional in-house shared ICT services arrangements.”
“SAP has stated that this project is its largest SAP Business ByDesign win globally to date. It is also 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.”
Dr Hodgkinson further stated:
“The timing of this project is 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.”
“Confidence in cloud services, in contrast, 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.”
