Govt strikes major strategic deal with SAP

The arrangement is effective immediately

The Federal Government has struck a new strategic procurement arrangement with SAP Australia, claiming that the new deal will deliver savings on the IT products and services being used by the country’s public sector.

SAP products and services are used to deliver internal business processes to government, including software licences, cloud subscription and support for human resources and financial management systems.

The arrangement is effective immediately for new and existing SAP contracts. It is not designed to mandate use of SAP above other vendors.

Australia’s Assistant Minister for Digital Transformation, Angus Taylor, said the agreement was another step toward simplifying IT procurement in Government.

"The SAP agreement will deliver savings through reduced duplication and administrative burden for departments," Taylor said.

"Government is driving hard to reduce costs so that it can invest in innovative new solutions. We know that a coordinated approach to ICT procurement works,” he said.

It is anticipated that the deal will maximise the value of Government’s spend on commonly used IT by leveraging demand across agencies to achieve price reductions, according to Taylor.

Taylor said that drawing upon the benefits of single vendor contracts was “as significant” as the Government’s focus on breaking up large IT tenders and panels to give smaller players a better chance of competing for Government work.

"We’ve done the work to consult across Government and with a number of major IT vendors to make sure we have fair and transparent arrangements in place,” Taylor said.

"Combined, the first two iterations of the Microsoft Volume Software Sourcing Arrangement generated savings in excess of $200 million,” he said.

In July, the Federal Government said it would establish a whole-of-government software licensing and services procurement (SLS) panel led by the Digital Transformation Agency (DTA).

Initially, the panel was set to have one category: Microsoft Licensing. In the future, however, more categories were expected to be added for other software licensing and related services.

From March 2018, non-corporate Federal Government entities will be required to use the Microsoft Licensing category of the panel if they choose to purchase Microsoft software, according to the DTA.

In October, it was revealed that Oracle was set to join IBM and SAP in talks with the DTA to establish a series of new whole-of-government coordinated procurement arrangements with the technology vendors.

The impending procurement arrangements were outlined in the Agency’s submission, dated 29 September, to the Parliamentary committee investigating the digital delivery of government service to the Australian public.

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