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Leaving a legacy: Why local governments are quickly moving towards modern, innovative digital solutions

Leaving a legacy: Why local governments are quickly moving towards modern, innovative digital solutions

4 Minute Read

Digital transformation is a popular phrase right now – and one of the key activities to undertake is transitioning aging financial and ERP systems to better meet the needs of employees and customers.

The role of technology within local governments has seen a significant shift in the last decade with increasing demand from residents, employees, and leadership to incorporate the latest and greatest tech advancements. As such, the expectations on local governments across Canada now include embracing modern technologies to make the lives of their citizens, stakeholders, employees, and leadership, easier and more streamlined.

In many cases, existing enterprise resource planning (ERP) systems tackle only one or two of the key elements within municipal government, such as financial systems, with other essential pieces, including HR processes, 311 services, and citizen interface/relationships, spread out across multiple platforms.

More and more, government employees are looking for access to up-to-date and accurate government-related information and historical data through convenient, digital means. In many cases, this means looking to transform a disconnected set of legacy systems into a new era of opportunity.

In a recent survey conducted by MNP, one in five respondents indicated that they are looking to replace their ERP system within the next five years.

As many outdated financial systems reach end-of-life local governments are looking to consolidate systems into a single system with similar or better functionality. This represents an opportunity to evolve into a cloud-based system and reduce cyber security risks.

Key survey findings

Following the survey, several main themes emerged across all regions and organizations as top areas of focus, ongoing challenges, and current types of technology used.

Highest priorities

Respondents to the survey indicated cyber security and privacy as a key focus in the next three to five years, with 76 percent saying it is their highest priority. Strategy and business planning came in second with 62 percent noting it as a top priority and continuous improvement and innovation came in third at 61 percent. Both latter priorities align closely with the goals and intended outcomes of replacing legacy ERP systems in the next five years.

Top barriers/ impacts on business

Among the highest challenges to organizational success, 62 percent of respondents listed insufficient resources as their top concern. Legacy technology systems came in second at 35 percent, followed by lack of strategic direction at 33 percent.

Top technology implementations

Keeping up with the growing number of technological advances, and the potential opportunities they present for Canadian local governments can be difficult.

In the next three years, 43 percent of respondents said they’re intending to adopt cloud connectivity, with 23 percent noting they’ll be looking to Artificial Intelligence (AI).

A lack of resources represents a significant challenge to these organizations as do legacy technology systems, both of which will require dedicated focus to overcome.

With only 28 percent of respondents noting they have a digital strategy in place, a number that’s trending up as more organizations see the benefits that holistic approaches to ERP system challenges present.

While local governments see the need to update their platforms, technology, and processes, few have a roadmap on how they plan to get there.

Six steps to finding the right ERP solution for your municipality

Local governments of all sizes across Canada are at a unique crossroads. When it comes to selecting which digital transformation journey is right for your community, there are a few key things to consider before getting started and throughout the process.

At MNP Digital we can assist organizations in finding the right solution for their specific needs and ensure implementation is appropriate and seamless. As part of that process, we employ six steps to help local governments get where they need to be.

  1. Find the right advisor. Having the right team by your side to assist in this transformation – one that understands local governments to ensure they know your needs and requirements, will be essential.
  2. Define the scope of engagement. Determine your needs and concentrate on those, using requirements gathered throughout the learning process, to power any conversations with vendors.
  3. Build a business case. Having your council on board will be key to the process so ensuring your data is accurate and illustrates all sides of the opportunity will be beneficial to getting them on board.
  4. Research potential systems and solutions. Knowing your needs is critical to finding the best system for your municipality and prioritizing strategic goals. Every challenge has a solution – find yours and you can feel confident knowing you’re making the right choice.
  5. Define your procurement method. If you’re unsure of the scope of the project as a whole, be sure to include a discovery phase as part of a negotiated request for proposal (NRFP) to ensure you’re taking the time needed to get the job done right.
  6. Structured your solution selection. Once you have a firm grasp on your prioritized needs and the options available to you, a structured solution selection will ensure you get the information you need at each stage to create a defensible decision. In this stage, you’ll also need to:
    • Define the critical success factors
    • Document your requirements in detail and use them to measure functional fit
    • Ensure you have taken account of future needs – not just a “lift and shift”
    • Use a procurement method that gets you the information you need – and NRFP works well for major solutions
    • Use scripted demos for your shortlist to allow for fair comparisons
    • Provide pricing matrices so cost is as comparable as possible and be sure to look at pricing over an extended period of time, not just the cost to implement

Why are so many local governments looking at Microsoft Dynamics 365 as their next solution?

While there are countless programs on the market that offer the kind of cloud-based and integrated approach to local government ERP systems, Microsoft Dynamics 365 stands out above the rest as a preferred solution for a few key reasons:

  • Many municipalities are already in the Microsoft ecosystem. A vast majority, 93 percent of municipal respondents noted that Microsoft programs are their current preferred productivity platform for email, calendars, document creation, etc.
  • Microsoft Dynamics 365, like few other options, has focused solutions in this specific industry.
  • PowerBI has become the reporting standard within local governments – another part of the Microsoft ecosystem.
  • It has a developer marketplace with local government-specific applications and more being developed all the time.
  • It offers options for enterprise asset management, taxes, utility billing, and more.
  • It gives access to the Power Platform which also allows for investments into chatbots, AI, automation, and system connectors.
  • It’s continually evolving to keep up with the latest advancements and opportunities

Depending on the local government’s capabilities, Microsoft Dynamics 365 offers an option, a direction, and a great place to start, but is not the only solution.

Additional considerations

Before you make the leap, there are a few more things to consider that may impact how you move forward in the process.

  • Smaller local governments with less digital maturity who are in close proximity to other small governments may want to invest in a solution together, if governance allows. This shared investment will grant all collaborating governments access to a higher-tier solution they may not be able to afford on their own.
  • Governments are quickly trying to move away from siloed systems of data – as 20 percent of respondents noted in the survey – making now the right time to act.
  • Building an effective business case is one of the most important steps, especially early on in the process. It should focus on digital citizens and also acknowledge and plan for AI, machine learning, and the impact of better data on decision making. In short, invest in a digital strategy.

As more local governments face the question of what to do about end-of-life software solutions, now is the time to dig deep into the needs of your community and workforce and how best to reach your goals.

Digital transformation of ERP systems takes a structured and thoughtful approach and ensuring your next step is effective can make all the difference.

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