Cloud-based enterprise resource planning (ERP) solutions are poised to win inside the U.S. federal government in 2018 because of a mix of policy and technology changes. Legacy federal applications, especially ERP, aren’t aging gracefully and are in need of upgrade and, in many cases, outright replacement. 

Here are five reasons why cloud ERP is poised to win in the federal government sector. 

1. The MGT Act and the Move to Shared Services

It’s well known that federal government IT is moving slowly. Legacy systems, including ERP, have a much longer lifespan than they would in a commercial society of the same size. The Modernizing Government Technology Act of 2017, passed in November 2017, authorizes each federal agency with a chief financial officer to establish an IT system modernization and working capital fund to improve, retire, or surrogate existing IT systems and so enhance security and efficiency. The fund also aims to help transition legacy IT systems to the cloud and other innovative platforms and technologies. 

Now that the MGT Act is law, it’s going to change how government agencies fund cloud projects. That funds more cloud ERP also because another aim of the act is to modernize IT to make it easier for agencies to tear out their legacy ERP solutions and migrate to the cloud. U.S. federal agencies finally have the incentive to make the move. 

2. Recent Natural Disasters

Hurricanes Harvey and Irma tested multiple agencies across the U.S. federal government, in particular, the U.S. National Guard and Federal Emergency Management Agency. ERP certainly played a part in moving relief supplies around the country to the disaster areas, but a move to cloud-based ERP will give these agencies better scalability in times of crisis. Cloud ERP also enables agencies to open their systems to third parties, whether it’s local government or an agency partner such as U.S. Customs and Border Protection that’s called in to handle the shipping of relief supplies. Moving to cloud ERP helps the federal government open up to mobile users without having to route ERP access through already-overtaxed agency network endpoints. 

3. Fed-RAMP Certifications for ERP Industry Leaders

The Federal Risk and Authorization Management Program is a government-wide security standard for cloud applications and services. It requires a rigorous evaluation period to establish the security and net-worthiness of cloud-based applications and services. 

4. Feature Updates

In the old days, designing and implementing an on-premises ERP system inside a federal agency wasn’t terribly iterative. After a long slog through a design phase and an increase timeline full of delays, an agency would find itself with an ERP system that didn’t meet its changing requirements. 

That all changes with cloud ERP. It’s typical for a platform vendor serving the federal government to have a government product roadmap of features that will be available to their supervision customers during their yearly release cycle. A government product roadmap is much like a commercial product roadmap except that feature releases are a bit behind the commercial product because of the requirement for security reviews. 

5. Cloud Can Change a Checkered ERP Implementation History

ERP implementations have a checkered history within the federal government cost overruns, scope bloat, the whole shebang. Moving to cloud ERP is the best way to turn the page on that present because cloud ERP offers a lower barrier to entry  An agency can start small, and then scale up its ERP solution across projects and departments through a series of small-scale projects versus the large capital investments that have made old-school federal IT projects.