AWS Public Sector Blog

Balanced budgets and enhanced constituent services: ERP beyond infrastructure in state and local governments

city hall local government

State and local governments (SLGs) are constantly looking for ways to improve the lives and well-being of their constituents. They strive for increased efficiencies in delivering existing government services or potential new services such as those related to assistance with food, health, education, affordable housing, weatherization, and more. These efficiencies enable doing more with less while managing a balanced budget. So how do senior leaders in finance and administration help policy makers and administrators achieve this? How do they determine the feasibility of launching these new social service programs? How do they use past performance indicators to predict future success of these programs?

Enterprise resource planning (ERP) solutions, along with ancillary business systems that support performance-based budgeting, play a key role in providing such data insights. The balancing act between tight budgets and enablement of government services is enabled by fiscal health, sound policies, and data insights. ERP systems deployed on the cloud can help with the capabilities and technology tools that governments need to derive efficiencies with existing services and deploy new services.

Governments continue to be challenged with legacy finance systems

Modern ERP systems have been around for more than 30 years, yet SLGs are challenged with deriving meaningful data and insights from the systems. The first challenge is the modernization of the ERP system itself. In a recent survey conducted by MeriTalk underwritten by AWS, 90% of the SLG respondents agree that a modern ERP system would help their organization become more resilient and improve tax payer value. Of those surveyed, 80% indicated that their organizations were held back by their outdated ERP systems. Survey participants also cited the following challenges to modernization: time to migrate (46%), cost (42%), lack of strategy (38%), challenges with integration (34%), and workforce skills gap (30%). Further, due to the recent COVID-19 pandemic, 83% of the respondents thought remote work was adding to their woes.

How organizations are addressing ERP modernization challenges

Customers are increasingly looking to Amazon Web Services (AWS) and AWS Partners to help address these challenges. When it comes to agility or time to migrate, while acknowledging that public sector generally has higher constraints compared to private sector,’s migration of their entire SAP landscape to SAP HANA on AWS in less than 48 hours is a testament to the agility that cloud offers.

A 2020 IDC study indicated that 85% of the customers report cost reduction by running SAP on AWS. In cloud, customers pay for what they use. Since ERP workloads are predictable, reserved compute instances can save up to 75%. GE Transportation reported 52% reduction in total cost of ownership migrating to AWS. Several modern ERP solutions can run on AWS Cloud, including SAP, Oracle, and Infor. Since the launch of AWS in 2006, more than 5,000 customers deployed their SAP systems on AWS with more than half running SAP HANA on AWS and many are migrating to S/4 HANA. For example, the US Navy consolidated 26 ERP systems onto SAP HANA through AWS Partner NS2—supporting 72,000 users across six commands globally.

Beyond infrastructure: Innovating with the cloud

Post-migration to the cloud, organizations have immediate access to an array of services available with the cloud. These services include storage and archival, remote work capabilities, cloud native application development, application integration services, and innovation services related to data analytics, Internet of Things (IoT), artificial intelligence (AI), and machine learning (ML). Access to these services help SLG customers to become more resilient, data-driven enterprises.

During COVID-19, customers took advantage of Amazon WorkSpaces and Amazon AppStream 2.0 to address remote work-related challenges and improve business resiliency. Amazon AppStream 2.0 is a fully managed application streaming service that provides users secure access to enterprise applications like ERP through a browser on any device. Check out how TideWater, one of the largest operators of offshore support vessels in shipping industry, used Amazon AppStream 2.0 to deliver vital applications worldwide. Similarly, Southern California Health and Human Services (HHS) agencies used Amazon Connect remote contact center and Amazon Appstream 2.0 to enable more than 75% of their workforce remotely to support 82% increase in applications for food assistance programs during the pandemic.

For modeling new government services, organizations can collaborate on data sharing among various agencies, non-government entities, policymakers, and regulators by taking advantage of native AWS services or partner solutions. A data lake on AWS brings data from ERP systems, non-ERP systems, and other structured and unstructured data to a centralized repository without the need to store data in a proprietary format. It provides a flexible platform for data analytics. Amazon SageMaker opens doors for deploying pre-built models or creation of new AI and ML models for predictive modeling and experimentation. This can help answer the question that I started with at the beginning of this blog: feasibility of new services and predictability of future services based on past performance.

Wherever you are in this journey, AWS cloud services can get you closer to balanced budgets and enhanced constituent services. To find out more visit our website or contact us.