ERP integration is key to digital transformation in the public sector

Leveraging advanced data analytics tools, the Inland Revenue Authority of Singapore (IRAS) has achieved, on average, three times more recovery per case.

Between July 2020 and June 2023, Singapore’s tax authority recovered a total of S$79 million in taxes.

To further enhance its capabilities, IRAS aims to deploy AI solutions and analytics applications more quickly and cost-effectively.

To achieve this, the agency has adopted a phased implementation strategy to modernise applications for different tax types and upgrade its Unified Data Platform with cloud-based technologies.

ABeam Consulting Singapore’s Principal and Head of SAP Business, Thomas Mani Padiyara, highlighted the effectiveness of a phased approach in integrating disparate systems within an agency.

“A gradual process of rolling out changes step by step ensures smooth transitions, gives teams time to adjust, and keeps essential services running uninterrupted,” he explained.

ABeam Consulting serves as a one-stop shop for implementing SAP’s Enterprise Resource Planning (ERP) software, which integrates key business functions, processes, and workflows.

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Slow innovation due to technology lock-in

Public sector agencies face several challenges with their existing ERP systems, including user experience, compliance and security, inflexibility, and cost management.

Many organisations struggle with a slow rate of innovation due to their reliance on turnkey solutions, custom developments, and diverse technologies across different projects.

This results in integration challenges, particularly when SAP backends need to communicate with non-SAP frontends.

Technology debt and infrastructure limitations

Upfront investments in on-premises hardware and software often lead to long-term technology debt.

As these systems become obsolete, organisations experience performance issues and rising maintenance costs.

Heavy capital investments in hardware can be a financial burden, especially when infrastructure underutilisation occurs.

How modern ERP addresses public sector pain points

Modern ERP systems come equipped with advanced, built-in security features to comply with the latest data protection regulations and address evolving cybersecurity threats.

These features include encryption, AI-driven threat detection, and multi-factor authentication to safeguard sensitive citizen data.

Cloud-based ERP systems offer increased flexibility and scalability by reducing the need for on-premises infrastructure. This enables agencies to adapt to evolving demands without requiring a complete system overhaul.

Additionally, modern ERP solutions are less expensive to maintain compared to legacy systems, which often incur significant hardware and upkeep costs.

Government agencies can improve resource utilisation by adopting scalable cloud infrastructure.

Starting small and scaling as needed ensures cost efficiency, significantly reducing total cost of ownership (TCO) compared to traditional on-premise hosting.

This eliminates the need for upfront investments in hardware, software, and licenses.

Hidden costs, such as operational downtime during updates or migrations, can disrupt services and erode public trust.

Regular software updates across the full solution stack ensure system stability, security, and compliance.

Built-in innovation updates help public sector organisations stay ahead of the curve without the hassle of manual upgrades.

Integrated systems is the foundation for AI innovation

Integrating ERP systems and data across multiple departments into a centralised platform eliminates silos and provides seamless access to information.

"When data is no longer scattered and is available for analysis, public sector agencies can harness the full potential of analytics to make well-informed, data-driven decisions,” said Padiyara.

SAP’s S/4HANA ERP software, for example, combines transactional (OLTP) and analytical (OLAP) processing on a single in-memory platform, enabling real-time data processing and analysis.

OLTP systems store and manage day-to-day transactional data, whereas OLAP systems aggregate and analyse data from multiple sources for deeper insights.

“This eliminates the need for separate systems, allowing organisations to streamline operations and gain instant insights for more informed decision-making,” he explained.

Impact of innovation on public service delivery

Padiyara emphasised the need for public agencies to modernise ERP systems to meet evolving technological and usability demands.

Modern ERP solutions offer intuitive, user-friendly interfaces that enhance user satisfaction, reduce learning curves, and facilitate quicker adoption.

AI-driven procurement analytics tools optimise procurement costs by analysing vendor performance and pricing trends.

“AI is also central to Singapore’s Smart Nation initiatives, helping manage infrastructure such as traffic flow and energy usage. In healthcare, AI-driven solutions enhance supply chains by ensuring timely delivery of medical supplies and anticipating demand surges during emergencies,” he added.

Across various functions, including budgeting, staffing, and inventory management, predictive analytics enable agencies to forecast resource needs, allocate them efficiently, and minimise waste.

More advanced use cases, such as AI-powered sentiment analysis dashboards, allow agencies to analyse public feedback and improve service delivery.

The integration of Internet of Things (IoT) and smart devices into ERP systems facilitates real-time tracking and management of public infrastructure, such as traffic systems and utilities.

IoT-enabled ERP solutions support predictive maintenance and improved asset management.

Moreover, mobile-first ERP designs empower both citizens and public servants by providing on-the-go access to essential services.

For example, SAP S/4HANA Finance enables managers to approve purchase orders and invoices in real time through the Fiori mobile app, streamlining financial operations and improving efficiency.

By modernising ERP systems, public sector agencies can achieve greater transparency and deliver public services that are not only more efficient and secure but also more accessible and innovative.